Impact of Large-scale Solar on Property Values in the US: Diverse Effects and Causal Mechanisms

Authors: Chenyang (Nate) Hu, Zhenshan Chen, Pengfei Liu, Wei Zhang, Xi He, Darrell Bosch

What Is the Issue?  

Solar energy is the leading source of renewable energy in the United States. Although the benefits of large-scale solar photovoltaic (LSSPV) are widely recognized and their implementation is supported by policy measures, the siting of LSSPV projects has encountered increasing local resistance. Local concerns include negative aesthetic impacts, decreased property values, environmental injustice, and adverse impacts on local agriculture. For example, being close to a LSSPV facility may reduce home values because it is considered unsightly. Yet there is a lack of policies or common practices to mitigate losses to local communities.

Solar development can also considerably affect land prices. An LSSPV facility typically requires 5–10 acres per MWac of generating capacity, and agricultural land is the most common type of land used due to its suitability (flat, dry, cleared of natural vegetation, and close to electric infrastructure). The competition for land between solar development and agricultural production is likely to increase farmland scarcity and farmland prices, especially at the urban fringe. Leasing land for solar energy production typically provides a higher financial return than traditional agricultural operations. 

What Did We Find and Why Does It Matter? 

We found that LSSPV projects decrease nearby residential home values but increase land values. For residential homes, LSSPV projects significantly reduce property values within 3 miles by about 5% (Figure 1). By contrast, LSSPV projects increase agricultural or vacant land value by about 19%, and for large-lot homes (properties greater than five acres), the increase in land value largely mitigates the negative residential impact (Figure 2). Negative impacts on home values diminished with greater distance from the LSSPV facility and as more time elapsed since the facility was constructed. Visibility of the project from the home did not amplify the negative effect of proximity to the solar installation on property values.

 
Figure 1 (Top). Effects of large-scale solar photovoltaic (LSSPV) projects on residential home value, based on distance from and view of project. The blue line estimates the effect on residential home value when the project is not visible from the home, while the red line estimates the effect when the project is visible. The shaded regions are 95% confidence intervals (CIs) constructed with two-way clustered standard errors at the census tract and year level. We estimated home prices at 0.5-mile intervals from a project, and we compared these intervals to a control group (properties between 5–6 miles distance from a project). This analysis is based on 8,303,074 observations.”

 
Figure 2 (Bottom). Effects of LSSPV projects on land value based on distance from project for agricultural and vacant land (top) and large-lot homes (bottom). All estimates are for lots greater than five acres, and large-lot homes are properties with residential structures. In both figures, the blue line connects estimates of how LSSPV projects effect land value at 2-mile intervals. The shaded blue regions are 95% CIs, which are constructed with two-way clustered SEs at the county-site and year level. We estimated home prices at 2-mile intervals from a LSSPV project, and we compared these intervals to a control group (properties between 18–20 miles distance from a project).

What Did We Do? 

We estimated the impact of LSSPV facility distance and visibility on property prices. We analyzed three categories of data: US large scale solar photovoltaic data, which included detailed information on 3,699 LSSPV facilities; real estate transaction and assessment records, which we filtered to include transactions reflecting fair market values in 40 continental states from 1993 to 2020; and geospatial data. The final sample included 8.3 million transactions for residential homes, about 68,000 transactions for agricultural or vacant land, and about 416,000 transactions for large-lot homes. From this sample, we established a visibility database for LSSPV across the continental U.S. and investigated the property value effect of LSSPV visibility. We calculated the visibility from residential properties to large-scale solar sites within 6 miles.  

Publication completed for this work

Hu, C., Chen, Z., Liu, P., Zhang, W., He, X., & Bosch, D. J. (2025). Impact of large-scale solar on property values in the US: Diverse effects and causal mechanisms. Proceedings of the National Academy of Sciences of the United States of America, 122, e2418414122. https://doi.org/10.1073/pnas.2418414122