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Gathering Data On Pv Solar Array

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DonRico

Senior Member
Joined
Nov 26, 2002
Professional Status
Certified General Appraiser
State
South Carolina
I have an interesting one scheduled for Monday. Homeowner says there's a PhotoVoltaic Array on the roof..

Looking thru MLS for Comps, I found nothing similar as far as Paired Sales that might be helpful. I want to ask all the right questions when I'm on site. So what is important to ask......

Owned vs Leased Fannie Selling Guide says Leased Arrays are not to be considered as value adders.
Total Cost of Installation ?? Amount of Govt Subsidy or Tax Credits ?? Is there a Lien on a Mortgage ??
Output Rating of the entire Array ?? in what unit of measure, kWatts/hour ??
Monthly Savings on Electric Bill
Cost of local Utility generated power


Has anybody appraised a Solar Home lately ?? Any other pertinent questions during the Subject Observations come to mind ??
 

Randolph Kinney

Elite Member
Joined
Apr 7, 2005
Professional Status
Retired Appraiser
State
North Carolina
Depends on your approah to value. Paired sales are the best, of course.

Some might suggest a depeciated cost approach.

Still, others might suggest a capitized net inome approach.

The latter two have problems representing what the likely buyer will pay for used solar panels.
 

Meandering

Elite Member
Joined
Feb 26, 2006
Professional Status
Real Estate Agent or Broker
State
Pennsylvania
DonRico said:
Any other pertinent questions during the Subject Observations come to mind ??

Name of the electric company. Look up their solar power reimbursement rates now. Look up what they do with the carbon credits.
Net metering may or may not be available.

Here is the SC state pamphlet.
http://www.energy.sc.gov/files/view/EnergyLegislativeTrackingReport9.pdf

Get a copy of this most recent state legislation and decide if it will apply to the new owners of the property.

H 3874 (Rat # 0137, Act # 0134) General Bill, By Mitchell, Cobb-Hunter,
Merrill, Loftis, Dillard and Govan

AN ACT TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING SECTION 12-6-3770 SO AS TO PROVIDE FOR AN INCOME
TAX CREDIT TO AN INDIVIDUAL OR BUSINESS THAT CONSTRUCTS, PURCHASES, OR LEASES CERTAIN SOLAR ENERGY PROPERTY AND
PLACES IT IN SERVICE IN THIS STATE, AND TO PROVIDE A DEFINITION OF SOLAR ENERGY PROPERTY ; AND TO AMEND SECTION 12-6-
3587, RELATING TO THE PURCHASE AND INSTALLATION OF CERTAIN SOLAR ENERGY SYSTEMS, SO AS TO ALLOW AN INCOME TAX
CREDIT FOR CERTAIN COSTS INCURRED BY THE TAXPAYER IN THE PURCHASE AND INSTALLATION OF GEOTHERMAL MACHINERY AND
EQUIPMENT, AND TO PROVIDE A DEFINITION OF GEOTHERMALMACHINERY AND EQUIPMENT . - ratified title

Here is the state energy department.
http://www.energy.sc.gov/residential


Know the state law VERIFY IF THIS IS STILL VALID.

South Carolina
Program Type
Net Metering
Summary
In April of 2014 the South Carolina legislature unanimously passed S.B. 1189 to create a voluntary Distributed Energy Resource Program. In March 2015 the Public Utilities Commission approved a settlement agreement among solar stakeholders detailing how the new net metering mandates laid out in S.B. 1189 would be fulfilled.

The settlement agreement approved by the Public Service Commission stipulates that utilities will offer net energy metering at the full retail rate.. Additionally, no new charges or fees distinctly separate from new net metering rates will be imposed upon customer generators until the expiration of the agreement on January 1, 2021.

The settlement agreement also stipulates that utility-specific distributed energy resources net metering incentive (DER NEM incentive) will be applied to customer-generators receiving service under new net metering tariffs prior to January 1, 2021. Customer-generators whose net energy metering facilities were operational prior to the availability of net energy metering rates approved by the commission under the terms of the settlement agreement may remain in historic net energy metering programs through December 31, 2020.

Eligibility and Availability

Resident net metering customers of independently owned utilities (IOUs) can install renewable systems of 20 kW or less and nonresidential customers can install systems with a cap of the lesser of 100% of demand or 1 MW. Renewable systems are defined as solar photo-voltaic, solar thermal, wind, hydroelectric, geothermal, tidal, wave, recycling, biomass, and combined heat and power and hydrogen fuel derived from renewable sources. These systems must be owned, leased, or operated by the customer-generator and must meet all interconnection, performance, safety, and reliability standards established by relevant authorities.

Cooperatives are required by S.B. 1189 to examine net metering policies but are not bound by law to implement new programs.

Net Excess Generation

The utility is responsible for maintaining an account of total electricity produced and consumed. When less electricity is produced than consumed in a month, then the customer-generator pays the difference. When more electricity is produced than consumed in a month, excess kilowatt-hour credits roll over to the next month. Utilities must annually pay out for any excess electric production to zero-out electric bills and re-start the monthly carry-over process. Excess generation credits cannot be used to pay for non-volumetric charges

https://energy.gov/savings/south-carolina-net-metering

Otherwise,

A lack of demand is an indication that value is not recognized within the market.


.
 

J Grant

Elite Member
Joined
Dec 9, 2003
Professional Status
Certified Residential Appraiser
State
Florida
There have been prior threads , might want to bring them up if findable.
 

DonRico

Senior Member
Joined
Nov 26, 2002
Professional Status
Certified General Appraiser
State
South Carolina
Randolph --
Thanks for responding. I was thinking about depreciating the original cost minus any subsidies and tax credits -- but what depreciation factor ??

And how to capitalize the income -- based on borrower's estimate of savings on his bill ?? or what he sells back to SCE&G ??

Paired Sales are zilch. I came up with no recent sales with PV Arrays. I have other "improvements" I have to pair up (Subject has a 6-car Detached Garage for this Car Collector).. My other problem is the Borrower is a Serial Re-financer. I'm looking at the Mortgage History on this place and I count 6 re-fi's since 2009 -- with ever-increasing values as each previous Appraisal tried to hit the bullseye....Yikes !!
 

Meandering

Elite Member
Joined
Feb 26, 2006
Professional Status
Real Estate Agent or Broker
State
Pennsylvania
Randolph --
Thanks for responding. I was thinking about depreciating the original cost minus any subsidies and tax credits -- but what depreciation factor ??

And how to capitalize the income -- based on borrower's estimate of savings on his bill ?? or what he sells back to SCE&G ??

Paired Sales are zilch. I came up with no recent sales with PV Arrays. I have other "improvements" I have to pair up (Subject has a 6-car Detached Garage for this Car Collector).. My other problem is the Borrower is a Serial Re-financer. I'm looking at the Mortgage History on this place and I count 6 re-fi's since 2009 -- with ever-increasing values as each previous Appraisal tried to hit the bullseye....Yikes !!


Sometimes, its just best to walk away.

.
 

DonRico

Senior Member
Joined
Nov 26, 2002
Professional Status
Certified General Appraiser
State
South Carolina
Hey Marion !! How are you ?? Get a lot of snow in your area ?? I'll follow your Links above.

I did Search the Forum, but many of the threads were from 2012....ancient history. Electric Rates are falling and Subsidies are expiring. The last CE Class I took on this was back in 2011. Olden Days.

I found a checklist that AI published, might make good Talking Points with the Borrower.
 

Meandering

Elite Member
Joined
Feb 26, 2006
Professional Status
Real Estate Agent or Broker
State
Pennsylvania
Hey Marion !! How are you ?? Get a lot of snow in your area ?? I'll follow your Links above.

I did Search the Forum, but many of the threads were from 2012....ancient history. Electric Rates are falling and Subsidies are expiring. The last CE Class I took on this was back in 2011. Olden Days.

I found a checklist that AI published, might make good Talking Points with the Borrower.

Homey!

No snow here. Too cold for that here. It might snow later in the week when it warms up, but mostly everywhere is saying it's going to be rain instead. So, probably will be an ice storm. Ghee more fun than snow!

A lot of everything about solar has expired, that's why I said check the most recent legislation in the state.

If you know the name of their electric company, paste it here and I'll try and find their solar credit program.

The $$$ saved by the current homeowner is not a "market" anything. And, is due to their particular lifestyle.

The numbers you need are the generation numbers from the solar panels.

This should come from a "true-up" statement at the end of the year, where the energy credits are calculated.

I am not in agreement with the "AI Method". But I have no political agenda either, so that might be why.

Post the name of the electric company and I'll see what I can find out for you.

.
 

Meandering

Elite Member
Joined
Feb 26, 2006
Professional Status
Real Estate Agent or Broker
State
Pennsylvania
Also,

Denis reworked some of the AI Method, which was better as it did not rely on the safe rate of liquidity to project future savings, as the AI method totally ignores regulatory risk, which, in some states, was 100% (See Arizona when they lost net metering protections).

You might ask Denis to repost his method, as I remember, he likened the solar panels to other amenities, as a "trade off" to a potential buyer. Wasn't bad idea in my mind.

.
 

J Grant

Elite Member
Joined
Dec 9, 2003
Professional Status
Certified Residential Appraiser
State
Florida
Ask some area RE agents who specialize in the area/property type, about buyer reaction to solar system such as your subject has. The agents may have listed or sold properties with similar systems and can provide insight if buyers care about the amenity and/or are willing to pay for it ( and if so, how much )

I've had similar experience where a homeowner had a string of recent refinances, and was aggressive about referencing prior appraisals and how high the value was.
 
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