Even in the face of sunsetting incentives, rooftop solar has never been more accessible. Installation costs have dropped 90% over the past decade, and prices are projected to fall another 60% by 2030. Improvements in photovoltaics and battery storage technology, higher panel production, innovative financing models, and government tax incentives have all contributed to this affordability which, in turn, has fueled strong market demand.
COGNITION Smart Data shows that homeowners are primarily installing solar for:
While the elimination of federal solar tax credit at the end of 2025 is projected to reduce the rate of residential solar adoption in 2026 and beyond, solar is still increasingly expected in new homes, especially by Millennial and Gen Z buyers. Builders who continue to offer it as a standard option can capture measurable market benefits, including higher home valuations.
For example, homes with owned solar systems sold for 6.8% more than comparable non-solar homes in 2024, highlighting the financial upside of integrating solar into new construction. In high-adoption markets such as California, where 36% of all U.S. solar installations are located, premiums can reach up to 10%.
This benefit applies only to owned systems, as third-party-owned setups, including leases and power purchase agreements, can deter buyers due to contractual complexities.
Demand is also growing for solar paired with battery storage. Zillow data shows a 62% increase in listings mentioning battery storage in 2024, reflecting homeowners’ increasing interest in energy independence and long-term cost savings through demand-side energy management.
In order to reduce higher upfront costs and extended payback periods that will inevitably result from the phaseout of federal tax credits, builders can tap into other creative financing options. For example, mortgage lender PRMI is now offering Lowtility, a mortgage vehicle that incorporates energy efficiency, electrification, and solar upgrades in such a way that monthly payments don’t increase for homeowners (because the savings from lower utility bills is incorporated into the calculation.)
Builders can also look for expanded state, local, and utility incentives, which will likely grow to include targeted grants and performance-based incentives for initiatives like providing access to low-income communities and installing battery storage in natural disaster-prone areas.
Despite the near-term challenges, the residential solar market is expected to achieve solid growth due to strong underlying fundamentals. Ever-increasing utility electricity rates and continuously dropping solar and battery component pricing will drive ongoing adoption, along with the exploding demand for resiliency against power outages in the face of more frequent and intense climate events.
The numbers are clear: from higher resale values to the growing appeal of energy independence and resilience, solar-equipped homes offer market advantages. Builders who act now can differentiate their developments, meet evolving homeowner expectations, and position their homes for long-term value in an increasingly solar-driven market.
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About COGNITION Smart Data
COGNITION is the only market insights platform specifically engineered for the building industry’s sustainability transformation. We track evolving consumer behaviors, emerging technologies, policy shifts, competitive benchmarks, and market demand signals so you can adjust faster, sell smarter, and grow revenue—confidently.