Follow up on the Solar discussion from an Installer

[Terrel L. Shields]

It's very difficult to come up with sufficiently accurate dollar amounts of savings to use for purposes of developing a quantitative adjustment by income capitalization.

That is akin to saying we cannot use the Gross Rent Multiplier because we don't know if the renter might move out next month.

 

[CANative]

Try applying accessory unit income to some sort of cooked up GRM to develop an adjustment for an ADU. You come up with all sorts of numbers. And that's because the income multiplier is based on the entire property... not just one (nominal) feature. Why not just use cost analysis instead. It's probably a lot more credible (based on the notion that since many people have them - if that's the case - then it can be inferred they were willing to pay the cost)?

I'm not saying you can't use income capitalization to derive an adjustment for a specific feature. But without some sort of sales data you've got nothing to support the cap rate. Pulling a cap rate out of thin air is no different than pulling any other adjustment our of thin air.

 

[Cigar]

but air exchangers do resolve the issue.

Air ventilation systems are now code in California, calling for an ASTM 62.2 0.35 ACH, sealing homes is mandatory under our energy code, using manufactured wood products is one of the mandates of the Green Codes, as is a 14 day air-purging requirement at full blast. The problem is that it's not working, ACH is having to be turned up to anywhere from 1.0 to 3.0 ACH to pass AQ testing, at that rate running the fan systems (even HRV or ERV) costs more than non energy code plus green code buildings. This is the commercial sick building syndrome all over again that plagued the office building industry in the 80s, the only way they solved it was turning up ACH or installing openable windows and making occupants open them. This is also the reason that Gifford's studies show LEED commercial buildings consume 29% more energy than non-LEED buildings.

The problem is that Energy Code and the Green Code are in conflict, even though California has separated them into two separate codes, the only mention of energy efficiency in the Green Code is that it must be 15% greater than existing Title 24 requirements.

 

[Randolph Kinney]

What i go out of these numbers is that solar homes (water and/or electricity) is so important to people don't want to get rid of their solar home ..(c'mon ....33 in 10 years????? while the regular homes flip like pancakes?) and at the same time the solar homes that did sell, sold for more than the non solar homes .... yet you still refuse to see the value that the general public sees.

Solar would not make up the entire $136,000 difference, but the numbers seem to show that solar is a part of the increase.

My bold.

I have looked at the raw data as I have presented to you and I can see by inspection that one cannot isolate solar panels as a significant contributing variable in the price appreciation of the homes.

Just ask yourself this question: How much value is from solar panels for homes that sold in 2006 in Scripps Highland with solar panels where the median price of those homes was $1,130,000?

Your article claims 17% is attributable to solar panels or $192,000 for 2006. Does that make sense when the retail cost of solar panel systems is $20,000? Would you consider buying a home with out solar panels so you can capture the excess over cost on resale?

The noise on million dollar homes overwhelms any statistical work to extract the value of solar panels. Even on $300,000 homes, I doubt that 17% value increase can be directly attributable to solar panels.

 

[DMZwerg]

Looks as if you have defaulted to Spartacus as the expert statistician.

No. I just have no interest if solar actually meets his claims in some NBHD in southern CA as I live in WISCONSIN. If I lived in a more comparable area I might have more interest, but not where I live.

Big difference between "deferring" to somebody and not wanting to waste my time making statistical chart of some CA NBHD.

 

[DMZwerg]

My biggest observation right up front is .... half of the homes built were built with solar and over the last 10 years ..... only 35 of them have been put up for sale as compared to 303 of the non solar home up for sale? That tells me there is something about a solar home people don't want to part with.

You mean that Dewey beat Truman? :icon_mrgreen:

There is a basic fact about statistics ... they can be VERY wrong if the right questions are not asked (such as who is being polled and whether or not it is a fair sample).

You made a general statement that there are two halves of the market (homes with and without solar panels) but you did not examine the socio-economic differences between the two groups to determine whether or not some other factor(s) may have been involved such that one group tended to have a higher number of resales than the other. It could just be that more expensive properties tend to turn over less often and have absolutely nothing to do with whether or not the house has solar panels.

BTW, with the famous photo of Truman holding up a newspaper with the headline "Dewey Beats Truman" the newspaper had conducted a telephone poll and failed to account for the income factor as more Republicans than Democrats had phones at that time.

 

[Meandering]

The net metering is not pure net.
http://solarpowernews.org/green-mountain-energy-offers-form/

You buy it at retail price, they buy it from you at wholesale price above 500kw, which is half what an average house uses in a month.

Don't drink the kool aid.

New Mexico has a good system. But that's only as long as these prices don't change. When too much gets fed back into the utility expect to see decreases in what they'll pay on the buy backs.

http://ezinearticles.com/?Solar-Pow...ny---Electricity-Buy-Back-Programs&id=1864640

 

[PropertyEconomics]

The net metering is not pure net.
http://solarpowernews.org/green-mountain-energy-offers-form/

You buy it at retail price, they buy it from you at wholesale price and they limit it to 500kw, which is half what an average house uses in a month.

Don't drink the kool aid.

.

Drink the kool aid ... I keep telling you that you do not know my market and I will say so again .. the price you receive here is higher than that which it costs you at the meter ... Marion .. please speak of YOUR market and not all ... you just dont understand but keep insisting you do.

 

[PropertyEconomics]

Try applying accessory unit income to some sort of cooked up GRM to develop an adjustment for an ADU. You come up with all sorts of numbers. And that's because the income multiplier is based on the entire property... not just one (nominal) feature. Why not just use cost analysis instead. It's probably a lot more credible (based on the notion that since many people have them - if that's the case - then it can be inferred they were willing to pay the cost)?

I'm not saying you can't use income capitalization to derive an adjustment for a specific feature. But without some sort of sales data you've got nothing to support the cap rate. Pulling a cap rate out of thin air is no different than pulling any other adjustment our of thin air.

I am not a fan of Direct Cap ... like you I dont know where the cap rate would come from .. or a GRM for that matter ... the income streams of "competing" incomes have totally different risk.

 

[DMZwerg]

Spartacus,
One last question for you.
If EVERY home in CA had solar panels on their roof thus yielding a net zero energy costand every business had sufficient solar collectors to reduce their peak mid-day energy consumption to zero such that CA could "afford" to have fewer reactors how long would the rolling blackouts last if a storm blanketed the state for 7 days?

:icon_mrgreen:

Yeah, that is one of the problems with solar power ... it only has a real affect on the grid if it is stored some way, like in electric cars or such. If I lived in CA and owned an electric car then I may well consider solar power worth it to reduce my fuel AND electric bills to a net zero on average. I would still need to be hooked up to the grid for night, very low solar power days and such.