I would definitely paint it but would use a third color not the white of the cabinets nor the grasslands of the wall.
Paint half wall wood paneling.
Fill any holes or cracks with wood putty using a putty knife and allow it to dry.
Painting wood paneling is an easy and cost effective way to update a room with wood paneling.
The idea is to take off the sheen and create a lightly gritty surface so the paint will adhere.
Apply a thin coat of primer with a roller.
When painting for wood paneling choose either a stain blocking latex primer or an oil based primer.
How to paint over fake wood paneling.
Inspect paneling in some instances you may be able to remove the paneling and paint the walls directly.
Fill and sand the wood.
But often paneling was installed with both nails and adhesive and you could damage your walls if you try to remove the paneling.
Before painting paneling use painter s tape to mask off your mouldings windows doors and ceiling.
If desired lightly sand all of the paneling don t forget the trim and moldings with 150 grit sandpaper.
Use a brush to fill in any grooves.
Paint the paneling in the living room charcoal and the upper wall and ceiling dove gray.
I suggest you paint all the wainscoting before deciding what to do with the fireplace.
While many home improvement websites will tell you that you need to clean the wood paneling with tsp sand it prime it sand it again prime it again if you took some of the primer off with sanding and then paint it i have found this to be much more work than.
Also in some cases the paneling was placed directly on the wall studs with nothing behind it.
Maybe a deeper blue green or dark cream from the rug.