602-312-9571Drive through almost any neighborhood in the Valley and you’ll see rooftop solar. So when it’s time to sell, refinance, or settle a property matter, owners want to know how solar panels affect a home appraisal in Arizona. Do they raise the value? Does it matter if the system is leased? And what paperwork does the appraiser need?
The short answer is that it depends mostly on one thing: who owns the panels. An owned system can be part of the real estate and may contribute to value. A leased system, or one under a power purchase agreement, usually belongs to the solar company and is treated very differently. This guide walks through how appraisers look at both, so you know what to expect.
It comes from Firebird Appraisals & Consulting in Gilbert. Our lead appraiser, Gabe Trevizo, is an Arizona certified appraiser (license 22146) and a VA designated appraiser who has been appraising homes across Maricopa and Pinal counties since 2005.
Owned, Financed, Leased, or PPA: Why Ownership Comes First
Solar systems in Arizona generally come in a few arrangements:
- Owned outright. The homeowner paid cash or has paid off a loan. The panels belong to the owner and transfer with the house.
- Owned with financing. The homeowner bought the system with a solar loan. The panels belong to the owner, but there’s a balance that typically has to be dealt with at sale or refinance.
- Leased. A solar company owns the equipment, and the homeowner pays a monthly fee to use it.
- Power purchase agreement (PPA). A solar company owns the equipment, and the homeowner pays for the electricity it produces, usually at a set rate per kilowatt-hour.
For an appraiser, the first question is whether the system is part of the real property being appraised. If the homeowner owns it, it can be. If a third party owns it, it generally isn’t, because the appraisal values the real estate, not equipment that belongs to someone else.
How Appraisers Treat Owned Solar Panels
An owned system is treated as an improvement to the home, much like a pool or an upgraded HVAC system. Like any improvement, its value isn’t what it cost to install. It’s what the market shows buyers are willing to pay for it.
Appraisers look at that in a few ways:
- Comparable sales. The appraiser looks for recent nearby sales of similar homes with and without owned solar to see whether buyers paid a difference. This is usually the strongest support.
- Income approach to the system. In some assignments, the appraiser may estimate the present value of the energy the system is expected to produce over its remaining life, using its size, age, and production data.
- Cost approach. The appraiser may consider the cost to install a similar system, less depreciation for age and wear.
The appraiser weighs whichever methods the local data supports and explains the reasoning in the report. The age, size, condition, and remaining warranty of the system all matter. An older system with a shorter remaining life will typically contribute less than a newer one.
How Appraisers Treat Leased Solar and PPAs
When a solar company owns the panels, the system is generally treated as personal property of that company, not part of the house. In most cases, the appraiser does not add value for a leased system or PPA.
That doesn’t mean the appraiser ignores it. The report usually notes that the system exists and that it’s leased or under a PPA. For a buyer, the lease or PPA is an agreement they’d need to take over, buy out, or otherwise resolve, and lenders look at those terms separately. A buyer’s lender may count the monthly lease payment when reviewing the buyer’s finances, but that’s an underwriting question rather than a value adjustment.
Some leased systems also come with a filing on the property records that the solar company uses to show it owns the equipment. If you’re selling or refinancing, it helps to know that early so your title company and the solar company can sort it out before closing.
What About Financed Systems?
If you bought your system with a loan, the panels are yours, so they can be treated like an owned system for valuation. The remaining loan balance doesn’t change the system’s contribution to market value, but it may need to be paid off or transferred at sale or refinance, depending on the loan terms. Have your solar loan paperwork ready so everyone involved knows how it’s handled.
Documents to Have Ready for the Appraiser
Good paperwork helps the appraiser describe the system accurately. If you can, gather:
- Your purchase contract, lease, or PPA
- Proof of payoff or your current loan statement, if the system was financed
- The system size and the number of panels
- The installation date and the installer’s name
- Warranty information for the panels and inverter
- Recent production data from your monitoring app, if you have it
- Recent utility bills
Our guide on how to prepare for a home appraisal in Arizona covers the rest of what to have on hand.
Solar and FHA or VA Loans
If your buyer is using an FHA or VA loan, the appraiser will also be checking the property against that program’s minimum property requirements, and the lender will review how the solar arrangement fits the program’s guidelines. Leased systems and PPAs can raise extra questions in these transactions, so share your solar documents early. Our FHA and VA appraisal page explains those programs in more detail.
Solar in Non-Lender Appraisals
Solar matters just as much outside of a mortgage. In a divorce, an estate, a buyout between co-owners, or a pre-listing valuation, whether the system is owned or leased can change the conversation about what the house is worth and what obligations come with it. A non-lender appraisal gives you an independent value that accounts for the solar system the right way, based on local sales. If you only need a quick look at value, a desktop appraisal may also fit.
Solar Homes Across the Valley
We appraise solar homes throughout the region, from Gilbert, Chandler, and Mesa to Queen Creek, San Tan Valley, Phoenix, Tempe, and Scottsdale. See our full service area for more cities in Maricopa and Pinal counties.
Frequently Asked Questions
Do solar panels increase home value in Arizona?
Owned solar can add value when local sales show buyers pay more for it. The amount depends on the system’s size, age, and condition, and it’s rarely the same as the installation cost.
Do leased solar panels add value in an appraisal?
Generally no. A leased system or PPA is usually owned by the solar company, so it’s treated as their property rather than part of the house.
Does a solar loan count against my home’s value?
No. The loan balance doesn’t change market value, but it may need to be paid off or transferred when you sell or refinance.
What should I give the appraiser about my solar system?
Your contract or lease, payoff or loan details, system size, install date, warranty information, and recent production data if you have it.
Does the age of my solar system matter?
Yes. Older systems with less remaining life and warranty typically contribute less than newer ones.
Get a Clear Value on Your Solar Home
Whether your panels are owned, financed, or leased, we can give you an independent value that handles them correctly. Firebird Appraisals & Consulting serves homeowners across Maricopa and Pinal counties, with a typical turnaround of about five business days. Call 602-312-9571 or request a quote online.