Follow up on the Solar discussion from an Installer

[Spartacus]

DMZ ... I'm a bit of a data guy myself. Did process improvement and data analysis in another life.

Try this website.

http://www.californiasolarstatistics.ca.gov/

California keeps track of every solar project completed and all the details that pertain to it.

The stated number thrown around is less than 1% of the people in CA have solar ... so it is a huge and open market ... as long as the incentives hold up.


Didn't mean to ignore anyone. Just tried to hit some of the main points without dominating the entire conversation or taking it into too many directions. (if you haven't already guessed .... I don't post on forums much....)

 

[Caterina Platt]

Thanks for your comment Scott. Certainly rational. I agree that the market is the ultimate decider. However with less than one percent of the homes in California having solar, it is obviously difficult. We as installers would sell more if we had appraisals saying homes would definitely be worth more ... you as appraisers say we will do that if we see more data ... so it's a catch 22.

They won't do it unless you confirm the info is right but you won't confirm the info is right until they do it.

I have a feeling that the folks who go solar now and use the incentives available are really gonna make out. Electricity is going Nova and people here in Cali are going to have to do something or they will be paying $300 or $400 monthly for electricity soon. Once the incentives are gone who know's if they will refresh them.

Actually, the appraiser isn't the one who has any control whatsoever over this situation.

If Sally and John can buy 123 Main for $320K w/o solar panels or the identical house up the road for $345K with a solar system, which one do they choose? The seller can ask whatever they like and the appraiser can put whatever number he/she would like on that report, but it isn't a reality until the buyer is willing to recognize a premium benefit and pay for it.

Even if you did get a few appraisers to see your point and agree (truthful or not), what have you gained? A bit more of a selling point in your presentation? Ok. Is it reality? Not unless the market forces that drive your demand shift. That isn't going to happen through a few real estate appraisers. A nationwide solar industry campaign to educate and change public perceptions perhaps, but not a handful of real estate appraisers.

I'd be more inclined to seek out the tin foil hat off the grid types for an increase in business.

 

[Spartacus]

Actually, it makes all the difference because people are moving jobs and relocating more than ever therefore an item with zero or near zero return on investment at time of sale has to make up the difference in cost or utility during the time of ownership. If this website is correct and average home ownership is 8-12 years then solar needs to "pay for itself" in well less than 8 years to be economically feasible if Metro is correct and there is no appreciable reaction to existing solar panels.

Thanks DMZ

Using the original example of a $218 original bill and reducing it to $114 mtg payment at a fixed 5% and using the historical 6.7% annual energy increase:

After 8 years the homeowner would have avoided $16,513 in electricity costs and there would still be 17 years of "guaranteed" life left in their panels. All they would need is an increase of 3.5k in their home to break even. If they got even half of what they paid for the system, they would be making a profit of $6.5k (plus any checks they got back from the electric company across the years).


After 12 Years they would have avoided $29,959 in electricity costs and would have already made all of their money back plus almost $10k more with still 18 years of "guaranteed" life left in their panels. Any increase in home value is just frosting on the cake.

 

[Spartacus]

Actually, the appraiser isn't the one who has any control whatsoever over this situation.

If Sally and John can buy 123 Main for $320K w/o solar panels or the identical house up the road for $345K with a solar system, which one do they choose? The seller can ask whatever they like and the appraiser can put whatever number he/she would like on that report, but it isn't a reality until the buyer is willing to recognize a premium benefit and pay for it.

Even if you did get a few appraisers to see your point and agree (truthful or not), what have you gained? A bit more of a selling point in your presentation? Ok. Is it reality? Not unless the market forces that drive your demand shift. That isn't going to happen through a few real estate appraisers. A nationwide solar industry campaign to educate and change public perceptions perhaps, but not a handful of real estate appraisers.

I'd be more inclined to seek out the tin foil hat off the grid types for an increase in business.

You are right of course but the appraiser does make a big difference in what the bank will loan. The consumer can want and be willing to pay the $345 for the solar house, but if the bank won't lend it to them ..... they may be SOL.

What I am gaining out of this is understanding not increased business. The more I understand about the entire process the better off I am.

People constantly complain about the price (and price increases) of electricity here in California. Solar is a completely viable solution that can save people tons of money.

 

[Randolph Kinney]

DMZ and Spartacus,

The following are links to all properties in Scripps Highland in San Diego that are listed, pending or sold through Sandicor MLS over the time of 2000 through today for you to view the detail data.

For all properties with solar panels (35 sales):

http://tempo5.sandicor.com/Pub/EmailView.asp?r=822623455&s=SND&t=SND

For all properties with out solar panels (303 combination of active listing, pending and sales):

http://tempo5.sandicor.com/Pub/EmailView.asp?r=410438118&s=SND&t=SND

Since you both are statistical whiz-bangs, tell us what you conclude the value added for solar panels.

 

[AnonApprsr]

This thread is awesome. I enjoyed reading it. For once, I feel the appraiser smugness, that is evident often on this board, is actually due in this case.

 

[TEL2002]

The major problem continues to be that there are not enough solar systems out there. The last I heard, 90% of the CA population could not afford the average priced home. Now throw some solar panels on the roof and the price goes even higher. Two houses one is $200,000 the other with solar is $220,000. If the buyer can only swing 200K, what will he have to give up (in size, amenities, etc.) to get solar. Will the buyer want solar over size, or view, or a pool, etc.?

An off the wall thought....let's say that 25% of the homes end up with solar panels as the OP hopes. How does the electric company deal with the loss of 25% of their revenue stream? They jack the price up on the 75% left. Some of those get smart and put on solar panels. The price goes up again...to those that are left. Someone has to pay for all of those transmission lines, etc. Before you know it, electric companies will be going toes up.

 

[PropertyEconomics]

How does the electric company deal with the loss of 25% of their revenue stream? They jack the price up on the 75% left.

Just a guess .. but you dont really understand net metering do you?

 

[George Hatch]

You are right of course but the appraiser does make a big difference in what the bank will loan. The consumer can want and be willing to pay the $345 for the solar house, but if the bank won't lend it to them ..... they may be SOL.

What I am gaining out of this is understanding not increased business. The more I understand about the entire process the better off I am.

People constantly complain about the price (and price increases) of electricity here in California. Solar is a completely viable solution that can save people tons of money.

If an appraisal comes in $20k short because an appraiser cannot or will not find support for the resale value in the market a borrower is not SOL. If a borrower really thinks they're that much smarter than all the other buyers and sellers in the market who have been closing deals then all they have to do is pony up the difference in cash.

As an appraiser I never kill deals. I only write the obituaries.

 

[prasercat]

An off the wall thought....let's say that 25% of the homes end up with solar panels as the OP hopes. How does the electric company deal with the loss of 25% of their revenue stream? They jack the price up on the 75% left. Some of those get smart and put on solar panels. The price goes up again...to those that are left. Someone has to pay for all of those transmission lines, etc. Before you know it, electric companies will be going toes up.

Much of the cost goes into centralized power plants and consumption of fuels. The more home power generation (decentralized), the less money needs to be devoted to this costly part of the infrastructure and power generation. The homeowner becomes responsible more for the cost and generation of power. Power generated at the home and used immediately by the home doesn't need to be sent over transmission lines, which are not entirely 100% efficient (power has to be boosted at sub-stations along the way, which is wasteful and another piece of infrastructure).