Value of whole home solar PV system

[djd09]

Installing panels can boost your home’s property value.

How Much Does Solar Increase Your Property’s Value?

The National Renewable Energy Laboratory offers a useful guide when determining how much your property’s value will go up. According to its research, each additional $1 in energy bill savings (from your solar installation) adds $20 to your home’s total value.

This rule of thumb varies depending on a number of factors, including:

The location of your home. Installations in active solar markets like New Jersey typically yield higher returns than comparable installations in less developed markets.

The size of your installation. Property value increases are directly proportional to the number (and quality) of solar PV panels installed.

The value of your home. Larger houses usually receive higher nominal boosts in property value. However, this increase often represents a smaller percentage of the total home value.

The exact numbers vary from property to property and installation to installation, but recent research shows an average increase in resale value being $5,911 for each 1 kilowatt (kW) of solar installed. In a state like California, for example, a small 3.1-kilowatt (kW) system can add an average of $18,324 to the value of a medium-sized home.

The property value advantages of solar energy only increase as you scale up. Installing 5kW of solar panels adds an average of $29,555 to the retail value of a medium-sized home.

It’s important to note that these statistics only apply to today’s housing prices and utility rates. As electricity prices go up (as they most certainly will), the advantages of solar energy rise proportionally as well.

How Installing Solar Panels Can Boost Property Value

You already know that installing solar panels can instantly lower your electricity bill. But did you also know that solar can raise your home's property value as well?

www.costofsolar.com

 

[Gobears81]

I did an appraisal of a commercial property recently that had a big solar panel system set up. They were getting reimbursed by the utility company as the energy generation was greater than what they actually used. The owners provided good information and while the projections provided by the solar company were too bullish, doing an NPV analysis based on their actual savings/ reimbursements would suggest a very healthy IRR, with or without the tax credit, so using a "normal" rate would have actually suggested a contributory value that was well above the costs, even after accounting for the declining effectiveness in later years.
With that said, the property was selling and the price did not suggest any contributory value to the solar system. My take on that is that Central Illinois has not seen widespread solar use, at least among property owners, so there could be some skepticism about how effective it really is and what costs could be incurred in the future. A common definition of market value incorporates knowledgeable buyers and sellers. Could that mean that the group of buyers aren't knowledgeable? Maybe so, but there is still evidence from this market that they are not paying a significant premium for solar panels. With that said, I might buy some for my property if I am able to buy a portion of my neighbors land that has sun, assuming that it generates a similar return as the property just appraised
For the OP, Central Illinois is not sunny Florida I'm guessing that there is greater market acceptance, or at least use among property owners of solar panels near you. I would try to find sales and listings of residences with solar panels in the area and interview the brokers to see what kind of market reaction they encountered or are encountering.

 

[Restrain]

Ok, we hit one where the going in cost was $42K for a unit powering a 1600 SF home. We were actually able to find a home that was similar enough and had panels, showed a 50% return. Alternately capitalize the ROI over the typical holding period of a home, which per stats is 10years m/l. Take the electric rate of the utility, do a PV analysis with a reasonable ROI and see what that gives you. The electric company often has the projected energy costs for average homes on their web sites. Good luck.

 

[J Grant]

This is a rather new booming trend, so its worth figuring out now. Its sunny central FL, 2-story 2,650sf home with dual zoned AC systems and a large salt water pool, so yes, I can believe the bill was that high in June.

Ask to see a year of utility bills, I live in S FL and I call a $500 month utility bill way above typical for a 2650 sf home. Is solar a booming trend in the area? - if it is, then driving around you would see many homes with solar panels - if not then it is not (yet) a booming trend. What is an emerging trend is solar roof tiles .

Solar panels esp if they get money back from electric, the formulas are complex - seems this system is lowering their electric bills and not generating income so that makes it simpler. Market value is the transaction price, what a buyer pays for the whole house as a package, so how much contributory value does a solar system add? If buyer pays 10k more for the house with solar system, they are pre paying 10k 10 k in electric bils so where is the benefit? -only if they can put it in the mortgage, where monthly payments of 10k more in mortgage are lower than the electric costs.

Surveying the subject area RE agent-are buyers paying more for solar systems or not, and if so, how much ? Ask enough agents, and the answers should converge. .

Some here have recommended using a qualitative "adjustment", aka reconciling subject at higher range of value which makes sense. Researching any past home sales prices both with solar and without...but good luck finding them time consuming to identify.

As far as needing a certified green appraiser _ if the value is greatly impacted, ,an entire house constructed with smart/green features yes, but if one isolated feature showing in market to be a low contributory value to the whole I can't see a case for it- but that is just my opinion.

 

[J Grant]

FPL | Energy My Way | SolarTogether | Residential

www.fpl.com

They (or utility company in your area ) might send an info kit if you contact them.

Complete guide to the Tesla Solar Roof: is it better than installing solar panels?

The Tesla Solar Roof has changed over the years. What’s the latest solar roof news and is it worth the cost? The answer may surprise you!

www.solar-estimate.org

I can't speak for every buyer, but if I were a buyer of a high value house I'd prefer the roof tile system

 

[Renee Healion]

Qualitative adjustments and reconciling to the whatever end, more and more seems to me to be the new "in the appraiser's judgment". The test would be if the user asks you to show your work, could you do it? Could someone else replicate it?

Using sales, not income at all? If you are doing a sales comparison, would you not actually compare properties with these systems? Do you know enough about the systems to be able to see a qualitative difference between them and the subject? On what basis do you distinguish if not production and expectation of savings--asking real estate agents? They have never needed to know what they are selling in order to sell. We have to understand what we are valuing. Don't wing it. Learn about the systems and accepted methods of valuing them or turn the assignments down.

Attributing no value is a value decision. Not a safe harbor.

Did you read Danny's posts? A claim of ignorance will not save you. And deciding to do what you do not understand is an ethics issue.

 

[Renee Healion]

JGrant Write Fannie Mae and ask them if the appraiser has to be already qualified to be acceptable to them. It is their policy, they can tell you so you believe them. Yes it is just your opinion. Ask them for theirs.

Certified green appraiser is a made up term.

 

[J Grant]

JGrant Write Fannie Mae and ask them if the appraiser has to be already qualified to be acceptable to them. It is their policy, they can tell you so you believe them. Yes it is just your opinion. Ask them for theirs.

Certified green appraiser is a made up term.

What makes an appraiser qualified ? This solar system, for market value opinion, is valued as a contributory value to the whole, not a stand alone what is a solar system worth. Does an appraiser have to know how to build a swimming pool in order to value a swimming pool contributory value ? There is a test of "Reasonable" ,and peer practice in qualified/experienced.

This is my take on it : If the OP as an appraiser is already experienced and knowledgeable about the type of home the subject is ( 2600 range with a pool ) and the subject's market area, then that appraiser is qualified to appraiser a more complex home in that market ( subject is a regular house there with one more complex factor, it has a whole house solar system ) Because the assignment is total market value of the house ans thus what a solar system contributes to the whole, rather than a stand alone valuation of a solar system.

If appraiser is not already experienced and knowledgeable in homes in that market they are not qualified to take on an assignment with added element of complex ( be it a solar system or other )

Per OP post seems this is not throwing back income, it is just reducing the electric cost. Area RE agents have listed homes or shown buyer homes with solar systems so their feedback is one way to establish contributory value ( or lack of it) There are proxies for solar systems as well- storm impact windows that are also energy efficient, for example. What value did they add to a house ?.

The question when trying to find contributory value of an atypical feature ( in this case a solar system ) is what else can a buyer get for the money? If a seller is adding 20k or 40k to home price for solar, for example, a buyer might consider other upgrades instead that are worth the 20k- 40k. In demand in Florida, a whole house generator (10k) and storm impact energy efficient windows (20k, for example ) Total of 30k.-There are buyers for solar, but seems more people installing it in a home they already own. For that home on resale, how much will a buyer pay for it, vs other options that same money can purchase ? Principle of substitution. ( a fear of buyer might be today's solar system might be obsolete or dated in coming years due to emerging technology).

 

[Carnivore]

Installing panels can boost your home’s property value.

How Much Does Solar Increase Your Property’s Value?


In a state like California, for example, a small 3.1-kilowatt (kW) system can add an average of $18,324 to the value of a medium-sized home.

How Installing Solar Panels Can Boost Property Value

You already know that installing solar panels can instantly lower your electricity bill. But did you also know that solar can raise your home's property value as well?

www.costofsolar.com

So, extrinsic motivation doesn't always have to be another person, but it is some outside demand, obligation, or reward that requires the achievement of a particular goal. Intrinsic motivation, however, is an internal form of motivation. You strive towards a goal for personal satisfaction or accomplishment.

Think of that above, and does the Cultural location(California) have anything to do with the Perceived Market Value

Found this on the Internet - Poor Mans way of figuring benefit(contribution) to MV.

Solar Calculator | EnergySage

Use this solar panel calculator to quickly estimate your savings with solar. Estimates are based on your roof, electricity bill, and actual offers in your area.

www.energysage.com

 

[Renee Healion]

You are speculating JGrant and if someone is foolish enough to believe you they could be in trouble. In the time it took to generate that last self-contradictory nonsense, you could have written them.