Solar Value

[Randolph Kinney]

Game Changer: $0.55 per watt from SolarCity’s record-breaking new solar panel

For a while there, there was a chance that solar expansion was in trouble. In the US, the federal Investment Tax Credit is set to end in 2016, which many believe will slow adoption, even as technology gets better than ever. Without an outside funder forcing solar to make good financial sense, the only way the tech could survive is if it started making that same sense all on its own. Now, Elon Musk‘s solar power venture SolarCity has taken another major step toward that goal, announcing a new solar panel product that can produce power for about $0.55 per watt.

http://appraisersforum.com/forums/threads/solar-value.209120/page-2#post-2626522


Solar Costs Will Fall Another 40% In 2 Years. Here’s Why.

http://cleantechnica.com/2015/01/29/solar-costs-will-fall-40-next-2-years-heres/

How much would pay for a house with 5000 watts of solar panel installed 5 years ago versus an identical house without those solar panels today?

If you bought 5000 watts of solar panels today, what do you think you could sell your house for in 2 years after the cost decline 40%? (more or less than you paid for the solar panels)

Cars now can last hundreds of thousands of miles, 20 years, but their value rapidly declines. They are sold on a monthly payment of $200 to $300 for 3, 4, 5, 6, 7 years. They virtually become upside down, or near upside down after a few years. What if the lender or FHA asked us to value the carpet component, a wasting asset, in a house with a 30 year mortgage?

 

[George Hatch]

If/when solar becomes the big amenity it will become so obvious in the marketing and pricing of homes that an appraiser won't be able to miss it. It's pretty obvious that we're not there yet, though.

 

[Mike Kennedy]

If/when solar becomes the big amenity it will become so obvious in the marketing and pricing of homes that an appraiser won't be able to miss it. It's pretty obvious that we're not there yet, though.

Seconded.

 

[Meandering]

And we will never be there.

Solar on homes exists because of federal mandates for renewable energy from utilities.

Once large solar farms come on line and the percentage mandate is met, there will be no need to net-meter residences for their tiny contribution.

Utilities are in the business of providing a public good at a profit.

Never forget the profit part, and that's why they are blue chip stocks.

Think for one single minute, that "the people" will remove "the profit" from the utilities because "the people" want to "save money"? Think again.

We are the food source that feeds the predators. No where does the food source out power the predators. No where, never, not in the history of the world.



Both sides of the see saw can't be up at the same time, and there is no profit when the see-saw is level.

It doesn't matter how good solar becomes, unless you can disconnect from the grid and live comfortably without the public utility, but they have a game plan for that. You won't get a mortgage either, if you are not connected to the grid.

It's a bill until the day you die, no matter how you try to overcome it, no matter how you try to justify it, no matter the amount of Kool Aid you drink.

Being drunk on Kool Aid does not translate to market value yet.

.

 

[Restrain]

A quick example. When whole-house IT wiring was taking off, a man in Plano, TX spent $50K installing a whole-house system where he could control the lights, etc. given that all these components are now off-the-shelf and run wirelessly by Wifi, he has effectively 100% obsolescence. Same thing is happening with solar. You have an effective physical life of 15 years more or less. Then you have the economic obsolescence due to changing technologies.

I agree that if if there is no sales data, the Income Approach is the most accurate approach. But even then the sales data has to be correlated against the income data (age of the systems, size, condition, etc). In the OPs situation, there should be some justification as to why no value was given, more than just 'we don't '. But unless the entire report was reviewed, no one here would attempt to say why no value was given or what a potential value would be.

 

[Meandering]

the Income Approach is the most accurate approach

I disagree.
The income approach takes into account three things residential folks regularly never address
1. competent management.
2. anticipated future benefit.
3. risk

Competent management would study, have some knowledge and weight the facts that out west, and in Hawaii and other sunshine favorable areas, net metering is being disavowed, and higher rates are being put in place to remove the "savings" to individual homeowners. More and more commercial endeavors are coming on line for both wind and solar production.

The anticipated future benefit will last only as long as there is an unfulfilled government mandate for a percentage of renewable energy. Believing the utility will not seek to fulfill that mandate through it's own equipment in the near future is a fools folly.

Considering the risk posed by these two principals within the Income Approach as heightened risk,

that impacts the current income (discounts) in the future should demonstrate to the appraiser and everyone else,

that what is being "saved" today is a fad that will not last the life of the loan, or even the half life of the loan to warrant paying a price premium above what others without solar are receiving.

.
.

 

[Mikeyvee17]

Thank you for all of the replies! I have not had the system for a full year, it was installed this past July. The estimated yearly electric generation is ~8600 KwH. All of the components are warrantied for $25 years. I have 15 years on my solar loan from New York State, the cost is $108 per month. As far as maintaining the system, after about 10-12 years the inverter will be replaced but that is covered under my warranty. They say you really don't have to clean the panels unless there a lot of trees around but we cleared out all of the trees near the house. I have filed a complaint with New York State, I have not heard back from them yet. I would be willing to post the appraisal but my personal information is in the report. I do know that the appraiser was unable to find comparable home sales with solar in my area. My concern is that how can you place no value on a system that generates all of my electricity? If I was a buyer and there was a home that had solar and I would be free and clear of an electric bill, I would be willing to pay a premium. How does the appraisal community handle this? A few of you are saying that a patio or pool can add value to a home, but why not solar? I have spent close to $60k on improvements which include the solar PV system. Others such as a new high efficiency boiler, a brand new oil tank (triple lined), new chimney, and a new electric water heater (benefit of going solar) new hardwood floors throughout, base and crown molding, all new stainless steel appliances ( when we first purchased the home, the seller did not have appliances and the appraiser dinged the value because of it). I was given $12,500 of value off of all of that. The new heating system alone cost over $12k. So I am just confused as to how the appraiser comes up with these numbers and when I spoke to him he refused to explain any of it.

 

[Mikeyvee17]

And yes - I did make the net metering program in New York

 

[Meandering]

Short answer,
You spent money to save yourself money.
Why would someone over pay because you saved yourself money?
They won't save anything by overpaying, so it is a wash, because they get no "enjoyment" from solar panels.

Pools, and patios provide personal enjoyment and utility which can add to market value.

No one gathers in front of the solar panels for a family photo.

While you might gain some value to your ego for spending that money to put them on your roof, that does not translate to market value.

Do not post your report here.

Just read the definition of market value that is pre-printed in it.

.

 

[Mikeyvee17]

the Income Approach is the most accurate approach

I disagree.
The income approach takes into account three things residential folks regularly never address
1. competent management.
2. anticipated future benefit.
3. risk

Competent management would study, have some knowledge and weight the facts that out west, and in Hawaii and other sunshine favorable areas, net metering is being disavowed, and higher rates are being put in place to remove the "savings" to individual homeowners. More and more commercial endeavors are coming on line for both wind and solar production.

The anticipated future benefit will last only as long as there is an unfulfilled government mandate for a percentage of renewable energy. Believing the utility will not seek to fulfill that mandate through it's own equipment in the near future is a fools folly.

Considering the risk posed by these two principals within the Income Approach as heightened risk,

that impacts the current income (discounts) in the future should demonstrate to the appraiser and everyone else,

that what is being "saved" today is a fad that will not last the life of the loan, or even the half life of the loan to warrant paying a price premium above what others without solar are receiving.

.
.

May I ask where you are getting your information about the systems only lasting half the life of the loan? My panels are from SunPower, if any label drops below 80% efficiency they are to be replaced. This is for 25 years,my loan is for 15. I plan on using my solar credit rebate from my utility company to pay down the loan even faster. So if I pay off the loan in 7 years. I have full benefit of the system for 18 years before the warranty expires.