Follow up on the Solar discussion from an Installer

[Spartacus]

Spartacus:

How does one know if the panels are Chinese or domestically produced? The number of $20,000 is being thrown around here, all the solar installations I see here in the Bay Area are running in the $70,000 neighborhood. I read an article about German solar installations recently but can't find it now, it said that Germans have a choice of cheap Chinese solar panels or more expensive domestically produced solar panels, in looking for it I did come across this:



Do we have any domestic solar industry at this point? Solyndra built a huge new manufacturing facility in Fremont with stimulus funds, Obama visited it and touted American production, they have now closed it down and moved all production to China to compete.


¹ http://www.redorbit.com/news/science/1748434/us_germany_engaged_in_pricing_war_for_solar_panels/

There is a label on the back of every panel showing who made it and it's rated power production. The monthly electric bills will show the real time power output and every system is self monitored to show the production of the system some will even show the production of each individual panel.

Solar installations in the Bay Area are more expensive because so many systems have been installed there their incentives are almost used up (each area has an alloted amount of incentive money Northern Cal, Southern Cal and San Diego. The state incentive started out big and declined on a tiered basis based on the watts being activated) but even with that 70k is still way too much.

Solyndra did indeed break ground on a panel production plant here in Cali and got federal money to do so ... Obama took pix, the former Governator took pix ... then they stopped building and moved the plant to a different state, not out of the United States. California is a terrible place to try to do business. Taxes and Fees are out of hand as well as Worker Comp, personnel issues and insurance costs. If I didn't have kids and an ex wife here I would consider moving as well.

 

[CANative]

When the market starts showing consistent pricing data it will be reflected in appraisers opinions of value.

 

[PropertyEconomics]

I submit that residential buyers think this way too. Maybe not so much to promote a good public perception but for a self-perception of "doing their part" in the green movement.

And that's why capping the income (savings) is not an ideal method of deriving an adjustment. The monetary benefit is mixed with the amenity benefit.

CA ... I do not disagree with anything you have written here. I pointed out in prior posts that many purchasers of homes with solar systems are purchasing partially out of social responsiblity and consciousness.
I think most would agree that retrofit of an existing home with PV systems is less than ideal, however, I know of one SRA here who did exactly that. Granted the local market is ideal for PV use with over 270 days a year of sunshine, however, that being said, we still see far fewer retrofits than we do new construction and our market is like nearly all others the amount of new construction is relatively minimal.

I also agree that capitalizing savings is not the best way to handle the situation, but it is far better in my opinion than ignoring the amenity. There are markets in the Boulder CO area which have had PV systems for some time now and those markets do in fact show PV adds value to the home.

Progress will be slow, but as I have stated and continue to believe, appraisers have a responsiblity of learning about these systems and the advantages they may provide. I recognize that market data is very slim at the present time but I further believe moving forward these systems will become less expensive and more present in the market. Santa Fe now has green requirements as part of their building code ...

I simply ask that we all become more educated and think a lot harder about these features than simply casting them aside because the work is difficult or hard. At the very least we owe ourselves and the market as much education as we can gain in order to provide the best analysis and valuation possible that is credible and not misleading.

 

[CANative]

Unless the system has a storage capability (batteries) there are periods of time when no power is being generated (night time) and periods where low power is being generated (cloudy days). During these time the house is back on the grid.

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. Kind of like doing an income approach on a vacation rental property or a rentable accessory unit.

It may be easier if the system can store energy but then we're talking $50k to $75k for a system instead of $20k.

 

[PropertyEconomics]

Unless the system has a storage capability (batteries) there are periods of time when no power is being generated and periods where low power is being generated (cloudy days). During these time the house is back on the grid.

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. Kind of like doing an income approach on a vacation rental property or a rentable accessory unit.

It may be easier if the system can store energy but then we're talking $50k to $75k for a system instead of $20k.

Storing the energy in battery form is very primative as best as I can tell and as you have pointed out very expensive.

One has to understand that even on a cloudy day the system produces electricity just not nearly as much. And yes there are times the residence is totally back on the grid (ie night time), however, the home is essentially at that point using credits they have "stored" with the utility company. In essence the home is using "stored" energy with none of the battery costs.

I believe with enough data, hisorical data, conversion of the income savings into value can be achieved ... but it does take data ... and if an appraiser completes enough of these appraisals they will have sufficient data in their files to present a good analysis.

 

[Cigar]

We have cities and counties with green ordinances around here, so far it's been a disaster, with new homes sitting vacant while the builders are being sued certainly will reduce appraised values. A statewide green code went into effecet on January 1st despite a lawsuit from the Sierra Club and other environmental groups.

Environmental groups try to block parts of California's green building codeThe Sierra Club and Natural Resources Defense Council are among six groups waging a last-minute campaign to derail some of the rules, saying they aren't tough enough.

More than 200 architects, engineers and builders have e-mailed Schwarznegger in the last three days to oppose the CalGreen label.
"The last thing we need is a new government rating system," said Phil Williams, vice president of Webcor, the state's biggest contractor.¹

In our areas with green codes people are getting sick:

New homes in Los Altos tend to have higher formaldehyde than new homes in surrounding cities. Many new homes in Los Altos have more formaldehyde than the Katrina FEMA trailers.

We measured formaldehyde in new unoccupied homes around Santa Clara County. Formaldehyde concentrations were consistently higher in Los Altos. The testing methodology was the same in all homes.


Of homes with more than 100 ppb formaldehyde, nine out of eleven were in Los Altos. Of homes with more than 120 ppb formaldehyde, three out of four were in Los Altos. Over half of the homes tested in Los Altos had more formaldehyde than the 77 ppb average in the Katrina FEMA trailers.
Initially, we could not understand why homes in Los Altos were different from homes in nearby communities. Construction practices and construction materials should be similar throughout the county.


The difference was a green building ordinance passed by the City of Los Altos in late 2007. Beginning in January 2008, all new homes in Los Altos were required meet the criteria for GreenPoint Rated.
To be GreenPoint rated, a home has to meet energy conservation requirements. Those requirements mean that new Los Altos homes are more tightly sealed than homes in other cities.


At the same time, GreenPoint Rated encourages use of engineered wood products in place of traditional lumber. Engineered wood uses less virgin timber, so it is good for the environment. Unfortunately, some engineered wood products emit considerable formaldehyde.


The combination of these two requirements produces homes that emit formaldehyde but lack adequate ventilation to dilute the toxin. The result is elevated formaldehyde inside the home, as we have found in Los Altos.²

The University of California doesn't think very much of solar:

Former Stanford biologist Chris Somerville, who recently moved to the Berkeley campus to head the new Energy Biosciences Institute funded with half a billion dollars from BP, said the potential of photovoltaic technology for meeting the world's rapidly growing energy needs hasn't panned out in the 87 years since Einstein won the Nobel Prize for discovering the photoelectric effect.


A better bet, Somerville told a packed audience on campus, is to lay microscopic siege to the Earth's abundant plant cells, break down their walls and extract their sugars to produce alcohol for fuel.


It was the second public bruising of solar panels by a prominent UC Berkeley researcher within a few days.
Last week, the campus released a report by energy expert Severin Borenstein saying the costs of today's solar panels far outweigh the benefits. He said the money now spent on putting photovoltaic panels on homes and businesses would be better spent on research into improving them.
Somerville agreed that "direct solar" is too expensive.
"I certainly think direct solar would be better if the cost could be brought down," he said in a lecture explaining why Berkeley and its academic partners, the Lawrence Berkeley National Laboratory and the University of Illinois at Urbana-Champaign, are joining with BP to fashion biological keys for unlocking solar energy stored in plants.
Meeting U.S. energy needs would require 26,000 square kilometers of solar panels operating at their current efficiency of 15 to 20 percent, an unlikely prospect given that only about 4 square kilometers of photovoltaic panels have been built in the world, he said.²

There is also a class action lawsuit awaiting certification against the USGBC claiming that it's LEED program produces energy costs 29% higher than non-LEED buildings.

¹ http://articles.latimes.com/2010/jan/11/business/la-fi-green-building11-2010jan11/2
² http://www.examiner.com/environment...ehyde-new-los-altos-homes?cid=parsely#parsely
² http://www.sfgate.com/cgi-bin/artic...university+of+california+solar&sn=001&sc=1000

 

[Meandering]

The value or potential for value and the savings, real or imagined, of solar energy is going to differ in every part of the country.

Might work great for you guys in death valley
http://www.solarcraft.net/sun-hours-map.htm

Electric Company Rebate info
http://www.pplelectric.com/e-power/Residential/renewable+energy+program.htm

USC at Berkley
http://faculty.haas.berkeley.edu/borenste/SFChron080421.pdf

In order to get a positive return from the electric company, you need to generate more electricity than you use, at the time you are trying to use it. So when you come home from work and it’s dark, you are not generating electricity and with the tie in system the OP was talking about, you have not stored any electricity either. But you’re still cooking, washing dishes, taking showers and running all those other appliances, hence, buying electricity from the utility provider, resulting in A BILL. But you are generating electricity during the day, which you might not be using, depending on the number of appliances running like refrigerators, hot water heaters, electric heaters, etc. So, if the solar system is big enough to generate enough electricity to cover what is being used in a 24 hour period, then the system breaks even with a zero bill from the electric company. If the system is large enough to generate more than is used in 24 hours you may get some money back from the electric company. If you add batteries and the battery charger to the system, you might get there. But, the expense and maintenance including monitoring of the charging of the batteries, ($1,700 for the good ones, each) does not warrant the additional expense for most people.

PP&L reports that the average home uses about 1,000 kilowatts per month.

If the OP would please quote the cost to install a system that would generate and store enough electricty to be 100% independent of the electric company at 1,000 kilowatts per month, you'll see why they are not as well recieved in the market as the industry would like.

 

[PropertyEconomics]

The reason the homes have high amounts of formaldehyde is because they are constructed very tightly ... an air exchanger can be installed for approximatey $2,000 which solves the property (dependant of course on the size of the home) but air exchangers do resolve the issue.

Sounds like a builder that had no idea what they were doing.

 

[PropertyEconomics]

Might work great for you guys in death valley
http://www.solarcraft.net/sun-hours-map.htm

Electric Company Rebate info
http://www.pplelectric.com/e-power/Residential/renewable+energy+program.htm

USC at Berkley
http://faculty.haas.berkeley.edu/borenste/SFChron080421.pdf

In order to get a positive return from the electric company, you need to generate more electricity than you use, at the time you are trying to use it. So when you come home from work and it’s dark, you are not generating electricity and with the tie in system the OP was talking about, you have not stored any electricity either. But you’re still cooking, washing dishes, taking showers and running all those other appliances, hence, buying electricity from the utility provider, resulting in A BILL. But you are generating electricity during the day, which you might not be using, depending on the number of appliances running like refrigerators, hot water heaters, electric heaters, etc. So, if the solar system is big enough to generate enough electricity to cover what is being used in a 24 hour period, then the system breaks even with a zero bill from the electric company. If the system is large enough to generate more than is used in 24 hours you may get some money back from the electric company. If you add batteries and the battery charger to the system, you might get there. But, the expense and maintenance including monitoring of the charging of the batteries, ($1,700 for the good ones, each) does not warrant the additional expense for most people.

PP&L reports that the average home uses about 1,000 kilowatts per month.

If the OP would please quote the cost to install a system that would generate and store enough electricty to be 100% independent of the electric company at 1,000 kilowatts per month, you'll see why they are not as well recieved in the market as the industry would like.

In New Mexico we have net metering .. you do in fact store electricity during day light hours with the electric company. Apparently your market is different.

 

[Meandering]

Storing the energy in battery form is very primative as best as I can tell and as you have pointed out very expensive.

PE,
You are right. That's why the new commercial technology is to store solar energy as molten salt to be used to make steam to power turbines that generate electricity for up to a month in the newest facilities. But most people cannot afford concrete bunkers of molten salt waiting around to make electricity and I'm sure most zoning boards would loose their minds if people tried to build the vast array of mirrors, towers and bunkers necessary to melt salt. And, the salt is typically salt peter, which could can make at home provided you have a ready supply of urine stored up.
.