Does Solar Increase Home Values?

[acas1]

We purchased a solar panel system for our home and am trying to find out if an appraiser actually finds that they increase the value of the home? If so, what percentage of the cost of the system would be added to the value?

 

[Randolph Kinney]

We purchased a solar panel system for our home and am trying to find out if an appraiser actually finds that they increase the value of the home? If so, what percentage of the cost of the system would be added to the value?

Cost does not equal value. Solar PV panels, depending on the age of them, will contribute some value to the home if they are owned. Homes with high energy bills will be more sensitive to having solar PV systems than homes that don't. Net metering and other means of offsetting your utility bill is what gives the solar system value to a potential buyer.

 

[acas1]

Cost does not equal value. Solar PV panels, depending on the age of them, will contribute some value to the home if they are owned. Homes with high energy bills will be more sensitive to having solar PV systems than homes that don't. Net metering and other means of offsetting your utility bill is what gives the solar system value to a potential buyer.

Thank you. Even with the system, we are very close to having the equity to remove our PMI. We are trying to determine how much, if any, it would add to the value if we were to pay for an appraisal.

 

[Randolph Kinney]

Thank you. Even with the system, we are very close to having the equity to remove our PMI. We are trying to determine how much, if any, it would add to the value if we were to pay for an appraisal.

I cannot say since I don't know your market. Depending on your location (desert-hot verses mountains-cold) all plays in the demand for solar PV and your utility rates.

One thing to bear in mind, a potential buyer of your home with solar PV will not receive any of the tax credits you received when you buy solar PV panels. Therefore expect something way less than replacement cost.

 

[Deleted member 130081]

Solar is not unlike AC from a long time ago. When AC first hit the scene, it was purchased by some owners who perceived the "value" of doing it (removed humidity and provided cool air as an added benefit). In the general market however, AC was not something the typical buyer would insist upon or "value", so it generally did not increase (or decrease) market value. Today, AC is widely recognized as necessary (removes moisture which prolongs component life) and a much-loved luxury (provides relief from excessive heat), and it is pretty rare to find a place where AC does not add or decrease market value. Solar hasn't quite caught on like that yet, at least not nationally, so often the additional market value may be less than the cost or maybe even nothing at all. It might be a different case in your local market and if so, you would need a local appraiser to dig up the answer for you, one that has the education to address the specifics.

 

[acas1]

Thank you for the replies. We are in Salt Lake and our system has essentially eliminated our power bill. We also had other energy upgrades done which have also helped reduced our gas bill. We actually have no intention of selling our house, rather we are trying to get a valuation that would eliminate our PMI. I believe that we would be at that point even without the added value of solar, but every bit helps

 

[Randolph Kinney]

Thank you for the replies. We are in Salt Lake and our system has essentially eliminated our power bill. We also had other energy upgrades done which have also helped reduced our gas bill. We actually have no intention of selling our house, rather we are trying to get a valuation that would eliminate our PMI. I believe that we would be at that point even without the added value of solar, but every bit helps

Market value is what lenders lend on. That is done by the sales comparison approach to market value. Therefore, the appraiser will look for similar homes like yours that have sold recently compared to homes like yours that did not have the energy systems you have to determine how much value a typical buyer would pay for your home.

If you know of any homes with energy systems like yours that have sold, be sure to point them out to the appraiser.

 

[Randolph Kinney]

I found something of concern about Solar PV systems in Utah.

NOVEMBER 24, 2017

Utah approves $200 fee for 15 minute-interval meters

New solar customers in the Beehive State not only lost full retail-rate net metering last week, but they will be paying Rocky Mountain Power $200 for the meter that will govern the program’s successor.

New solar customers in Utah woke up last week to discover that not only had they lost full retail-rate net metering, but the state’s Public Service Commission (PSC) allowed utility Rocky Mountain Power (RMP) to impose a new $200 fee for the installation of the 15 minute-interval meters that will govern net metering’s successor program.

The PSC’s latest ruling comes after nearly two years of difficult negotiations between RMP and the solar industry on the future of net metering in the state finally came to an end in August.

Under the agreement, current net metering customers are grandfathered under current “export credit levels” (Utah’s way of describing net metering) until 2035, but full-rate reimbursement will end for new solar customers ended last week.

From now on, new customers and installers will receive credits at a lower-than-retail rate over a three-year period while a new plan based on a calculation of the value that solar provides to the grid is devised.

Also during the transition, the PSC will oversee a study that will be completed no later than 2020 to determine the value of solar that will inform the rate structure after the adjustment period.

https://pv-magazine-usa.com/2017/11/24/utah-approves-200-fee-for-15-minute-interval-meters/

You are grandfather on your rates (net metering) but anyone buying your home is not and will pay the new metering rates, which are not as favorable as your rate.

 

[Meandering]

Which makes it difficult to identify comparable sales that also are grandfathered for the old net metering system.

In essence, you've pre-paid your electric bill by buying solar panels. If you have your old electric bills, present them to your lender as proof of your "savings". Some will use that information to adjust your income/expense ratios.

.

 

[acas1]

I found something of concern about Solar PV systems in Utah.

NOVEMBER 24, 2017

Utah approves $200 fee for 15 minute-interval meters

New solar customers in the Beehive State not only lost full retail-rate net metering last week, but they will be paying Rocky Mountain Power $200 for the meter that will govern the program’s successor.

New solar customers in Utah woke up last week to discover that not only had they lost full retail-rate net metering, but the state’s Public Service Commission (PSC) allowed utility Rocky Mountain Power (RMP) to impose a new $200 fee for the installation of the 15 minute-interval meters that will govern net metering’s successor program.

The PSC’s latest ruling comes after nearly two years of difficult negotiations between RMP and the solar industry on the future of net metering in the state finally came to an end in August.

Under the agreement, current net metering customers are grandfathered under current “export credit levels” (Utah’s way of describing net metering) until 2035, but full-rate reimbursement will end for new solar customers ended last week.

From now on, new customers and installers will receive credits at a lower-than-retail rate over a three-year period while a new plan based on a calculation of the value that solar provides to the grid is devised.

Also during the transition, the PSC will oversee a study that will be completed no later than 2020 to determine the value of solar that will inform the rate structure after the adjustment period.

https://pv-magazine-usa.com/2017/11/24/utah-approves-200-fee-for-15-minute-interval-meters/

You are grandfather on your rates (net metering) but anyone buying your home is not and will pay the new metering rates, which are not as favorable as your rate.

Thank you. Yes, Utah Legislature and Rocky Mountain Power make it hard to be a citizen of the state