How do you value Solar in a home appraisal?

[MoistMitten]

I have a house Im planning to sell and I installed 16.8KW of solar on the house. Its bought and paid for which is a bit rare for panels now a days... My question is (preferable relatable to the Michigan market if its not universal) how do you value a paid for system? I have seen quotes online for 5-6k per KW of installed system in regards to home value, but is that the case (this is normally from solar friendly sites)? Is there some other metric that is used or standard to add that value when a comp doesnt exist?

The house is 100% electric and had a NET $0/m bill including charging a standard EV so there is definitely value there, but Im not sure how much or the logic behind it.

 

[Tim Hicks (Texas)]

Solar panels can be like other additional improvements with a lower contributory value. A $80,000 pool may only be worth $30,000 contributory value. A $40,000 workshop may only bring $20,000 contributory value. I have found solar panels to have similar decreased contributory value. Typically, a home in this market area will only sell for 5-7% more with owned solar panels, but every market is different. I would suggest you talk to a local realtor or appraiser in your market area and see what the difference in pricing would be with your owned solar panels. There is no "set adjustment" for owned solar panels. Only paired sales from your immediate market area will tell you the value of your solar panels.

 

[Dublin ohio]

there some other metric that is used or standard to add that value when a comp doesnt exist?

The bolded should tell you something

 

[Dublin ohio]

Is there some other metric that is used or standard to add that value when a comp doesnt exist?

You don't need a actual "comp" to your property to do a paired analysis

 

[MoistMitten]

Solar panels can be like other additional improvements with a lower contributory value. A $80,000 pool may only be worth $30,000 contributory value. A $40,000 workshop may only bring $20,000 contributory value. I have found solar panels to have similar decreased contributory value. Typically, a home in this market area will only sell for 5-7% more with owned solar panels, but every market is different. I would suggest you talk to a local realtor or appraiser in your market area and see what the difference in pricing would be with your owned solar panels. There is no "set adjustment" for owned solar panels. Only paired sales from your immediate market area will tell you the value of your solar panels.

I did message a local person I have worked with before to see how they would do it. Realistically the size is 2x a standard size and yields no additional bills so I suppose its based on how they value it, but 4-7% sounds reasonable... But 15% would be more on the money for the size of the system imo. I suppose I will have to find out tomorrow.

 

[Elliott]

What is the size of the house? What is the primary heat source for the house? If I were a purchaser in Michigan, I'd try to figure out how much the savings in electricity per year and run a discounted cash flow for say, 10 to 15-years, at 5% and 10%. I know of a 500-house subdivision with about 5% of the houses with solar. There are pluses and minuses (the roofs look cobbled compared to standard tile roofs), panels are associated with a China stigma, and maintenance issues with the supporting roof.

 

[MoistMitten]

What is the size of the house? What is the primary heat source for the house? If I were a purchaser in Michigan, I'd try to figure out how much the savings in electricity per year and run a discounted cash flow for say, 10 to 15-years, at 5% and 10%. I know of a 500-house subdivision with about 5% of the houses with solar. There are pluses and minuses (the roofs look cobbled compared to standard tile roofs), panels are associated with a China stigma, and maintenance issues with the supporting roof.

That sounds fair, it's pretty seamless. 1860sqft heatpump/mini split for heating/cooling. About 6k/year of savings in electricity.

 

[sputnam]

Same way you value the contributory value of any feature. Market data... in this case.. including the possiblity of capitalizing the savings in utility costs.

 

[ucbruin]

"There are pluses and minuses (the roofs look cobbled compared to standard tile roofs), panels are associated with a China stigma, and maintenance issues with the supporting roof."


I've heard of the China Syndrome....
But not a "China stigma"....
Sounds like "bias" to me....

 

[jay trotta]

I have a house Im planning to sell and I installed 16.8KW of solar on the house. Its bought and paid for which is a bit rare for panels now a days... My question is (preferable relatable to the Michigan market if its not universal) how do you value a paid for system? I have seen quotes online for 5-6k per KW of installed system in regards to home value, but is that the case (this is normally from solar friendly sites)? Is there some other metric that is used or standard to add that value when a comp doesnt exist?

The house is 100% electric and had a NET $0/m bill including charging a standard EV so there is definitely value there, but Im not sure how much or the logic behind it.

IMO-how much is your savings per month? (all electric) x 12 months.
The advantage here would be the non-lease aspect of the equipment (in the bank/lender mind). Who is responsible for the maintenance? (impact negative/positive)
Also, bear in mind you may not get dollar for dollar value without a similar Sold Comp., and an adjustment may be limited to supporting factors.