Solar Value

[nicholz12]

If this sf is valued by an income stream over time should the IRS be looking at this re income, income credits, bartering? Or not. Just wondering.

 

[Randolph Kinney]

The $30k system really only costs ~$15k since the Federal and State Tax credits pay for about half.

So your solar PV system can not be worth more than $15,000 on resale because the buyer will not enjoy the tax benefit that only you can have even though it costs $30,000.

 

[JTip]

Others such as a new high efficiency boiler, a brand new oil tank (triple lined), new chimney, and a new electric water heater

A few years ago I bought this 1986 F150 from a fella. It was a project truck he and his son worked on. Sweet black paint and a mustang engine with red neck exhaust. I needed a toy for the farm.

I told my uncle in law about it, a hardcore car salesman, emphasizing the 'mustang engine' and how much more power it had and the sweet purr when you laid on the pedal.

"Every vehicle needs an engine", he says. Your house needs a boiler, tanks to hold the oil for the boiler and a chimney to exhaust the boiler fumes. Just because it's new doesn't give you a dollar for dollar return; every house needs a heater. Perhaps an edge on marketability as you can boast new long lived items, but that's about it, IMO. I'm getting a new well pump ($1,200) and new hot water tank (Rheem, another grand). With these improvements I foresee a $0 increase in my home's value but I will enjoy hot high pressure water for another 20 years.

 

[Mikeyvee17]

Mikeyvee,
How much electricity is produced by the system (on average) and how much is that electricity worth per month.

So here's my back of the envelop calculations with the limited information you've given. It costs $30K, at 3-1/2% interest, that's $1000 per year, it will probably have an effective life because of improving technology of 20 years, so that 's $1500 of depreciation. I doubt these things are maintenance free, so let's add $300 per year (I imagine a Hurricane Sandy would rip one of these off with ease). So just to break even, you need to make, use, sell the equivalent of $3000 per year. If there is an amount you save over that then that could be capitalized at 10% (5% depreciation + 5% safe interest rate) and that would be a reasonable value. From there the market would probably discount it 30% to 60% depending how they feel about the solar improvement in relation to the rest of the house, neighborhood, etc.

I have generated 2.3 MWh since July 24th.

The financing is on roughly ~$16K which is $108 per month for 15 years.

On average I generate between 30-45 KWh per day (the upper range in the summer months)

 

[Mikeyvee17]

So your solar PV system can not be worth more than $15,000 on resale because the buyer will not enjoy the tax benefit that only you can have even though it costs $30,000.

And that is fine - but it has a VALUE, it's not $0

 

[Mikeyvee17]

A few years ago I bought this 1986 F150 from a fella. It was a project truck he and his son worked on. Sweet black paint and a mustang engine with red neck exhaust. I needed a toy for the farm.

I told my uncle in law about it, a hardcore car salesman, emphasizing the 'mustang engine' and how much more power it had and the sweet purr when you laid on the pedal.

"Every vehicle needs an engine", he says. Your house needs a boiler, tanks to hold the oil for the boiler and a chimney to exhaust the boiler fumes. Just because it's new doesn't give you a dollar for dollar return; every house needs a heater. Perhaps an edge on marketability as you can boast new long lived items, but that's about it, IMO. I'm getting a new well pump ($1,200) and new hot water tank (Rheem, another grand). With these improvements I foresee a $0 increase in my home's value but I will enjoy hot high pressure water for another 20 years.

So then why did the appraiser when I originally purchase my home ding me for $5000 in value because the seller did not have appliances installed?

Again, you can't have it both ways - If you deduct value for something, you must increase it for having something.

My Wife and I looked at over 30 homes, trust me - anyone with half a brain would pay a premium for a new heating system as opposed to one that can burn your house down at any moment.

 

[Randolph Kinney]

Analyzing recent sales

His findings: Solar systems purchased by the owner do add value, while leased solar systems can detract from a value or sales price.

"I found that owned (solar) systems almost always seem to generate a small premium in the sale price of the home while leased systems do the opposite," Orr said. "I think it is fair to suggest that an owned solar system can add 4 to 6 percent to the value of a house."

He said a leased solar power system can detract 3 to 8 percent from the value of a metro Phoenix home.

http://www.azcentral.com/story/money/real-estate/2015/07/17/solar-raise-home-values-system/30296123/

Take note to this paragraph in the article: "Arizona Public Service Co. reports more than 30,000 customers with rooftop solar, and Salt River Project had more than 15,000 before changing its rates this year, which essentially halted installations in its territory."

The value of solar panels owned on resale does not reflect the change in electric rates (net metering) and fees yet.

 

[Randolph Kinney]

And that is fine - but it has a VALUE, it's not $0

It has value to you. It may have some value to a potential purchaser at a future date but as of the date the appraiser valued your home, there were no comparable sales that had a solar PV system. Your lender told you that:

... they had me speak with their Staff appraiser who said, and I quote "the appraiser did everything correct, we do not assign value to a solar system if there are no comparable sales in the area" and would refuse to look at any of the documentation I sent him...

So, as far as your lender is concerned, the solar PV system did not contribute to the market value of your home.

 

[Meandering]

You seem to be the only person that sees the value of this. I save myself about $75-100 per month on electric AND I switched to an electric hot water heater so if we are being fair and accurate, I need to calculate how many gallons of oil my old 40 gallon water heater was using that now since I have solar, no longer need to pay for.

Except the life expectancy of the solar panels is not 15 years, it's 25 (actually closer to 30)

The system cost was $30k at an interest rate of 3.49%

It is all still basic math.

If you saved $75-$100 per month on the electric, lets just be generous and say you also saved $75-$100 per month on the oil, for an average monthly savings of $150.



You did not save yourself anything.

as far as, my carbon footprint??
just your insistence that the math works tells me you could not live in the small carbon foot print I have.

Really? I see why I don't like my appraiser...

I didn't spend money for my "ego" I spent money to save myself money. And if I sell my home, the next home owner will not have an electric bill so how is that not passing on a benefit?

What are you doing to save yourself money? What are you doing to save the environment?

Should I post the numbers of how many pounds of CO2 I am not spewing into the atmosphere? Will that help you give me a "fair" value?

You may disagree with solar, and that's fine but don't mock me and say "no one will hang out in front of my solar panels"

Do some research, don't be bias for once - it will do you good.

How about you do some research yourself. In the upper right is a search box.
Type in Solar,
then click titles.
You can read all the threads concerning solar here, but I'll warn you first,
they contain many citations to scientific studies,
and because they are scientific studies,
the kool aid you drank, may sour in your mouth.

.

 

[Meandering]

I have generated 2.3 MWh since July 24th.

The financing is on roughly ~$16K which is $108 per month for 15 years.

On average I generate between 30-45 KWh per day (the upper range in the summer months)

Nope,

$108 per month is not a 15 year loan at 3.49% interest.

Try again.

At 3.49% for 15 years the payment is $214 a month.

You're only saving $75-100 per month.

The math does not work.

.