How do you value Solar in a home appraisal?

[Meandering]

1. Cost-Effectiveness: The average cost of a solar panel system in Michigan is around $15,955 before incentives, and this cost can significantly reduce after applying the 30% federal tax credit and other local incentives (EcoWatch) (EnergySage).
2. Savings: Over a period of 20 years, you can expect to save approximately $15,582 on electricity costs with a typical 5 kW system. The average payback period for such investments is about 12.77 years, which is competitive compared to other states (EnergySage) (EnergySage)

Without tax incentives the cost is still higher than the return in "electric bill savings"

And, those figures are for "value in use", as in paying cash to get the solar panels, so it does not accommodate the "market value" consideration of a property value increase to a 30 year mortgage with interest payments over 30 years.

Oh and it just assumes that what the utility company reimburses the solar owner will remain at the rate ya all are calculating in the repayment numbers.

California Reduces Subsidies for Homes With Rooftop Solar​

Dec 15, 2022 Dec. 15, 2022. California regulators voted unanimously on Thursday to significantly reduce how much utilities have to pay homeowners with rooftop solar panels for power they send to the electric ...

 

[Meandering]

Next time you buy a used car,
tell the dealer you want a 30 year loan on it.

.

 

[RCA]

Without tax incentives the cost is still higher than the return in "electric bill savings"

And, those figures are for "value in use", as in paying cash to get the solar panels, so it does not accommodate the "market value" consideration of a property value increase to a 30 year mortgage with interest payments over 30 years.

Oh and it just assumes that what the utility company reimburses the solar owner will remain at the rate ya all are calculating in the repayment numbers.

California Reduces Subsidies for Homes With Rooftop Solar​

Dec 15, 2022 Dec. 15, 2022. California regulators voted unanimously on Thursday to significantly reduce how much utilities have to pay homeowners with rooftop solar panels for power they send to the electric ...

As I said: "You have to try to take into consideration market reaction to the amount of kW your subject system can generate year round."

- That is not easy unless you have a number of good comps with the right information. In the worst case, if you have previous studies that indicate a certain percentage market reaction to clear monetary savings or expense, you could do something like add 60% of the estimated net present value of expected savings over the next 8+ years. That is, you utilize your previous analytically derived information, with a "buffer safety zone" so to say. You should justify your reasoning with some objective analysis. But, it's risky business. Undervaluing and overvaluing are both sins. But, assuming that your estimate is really for collateral value, then overvaluing is a worse sin from that perspective. But, you have to be cautious.

 

[Surf Cat]

Next time you buy a used car,
tell the dealer you want a 30 year loan on it.

.

You almost need a 30 year loan with how expensive new cars and trucks are.....and how they depreciate when you drive off the lot...

I always buy used cars from private parties to make it palatable.

 

[Meandering]

As I said: "You have to try to take into consideration market reaction to the amount of kW your subject system can generate year round."

- That is not easy unless you have a number of good comps with the right information. In the worst case, if you have previous studies that indicate a certain percentage market reaction to clear monetary savings or expense, you could do something like add 60% of the estimated net present value of expected savings over the next 8+ years. That is, you utilize your previous analytically derived information, with a "buffer safety zone" so to say. You should justify your reasoning with some objective analysis. But, it's risky business. Undervaluing and overvaluing are both sins. But, assuming that your estimate is really for collateral value, then overvaluing is a worse sin from that perspective. But, you have to be cautious.

what is the safe rate for liquidity these days???

 

[Meandering]

Just cut back on the usage, you'll "save more money" than buying solar.

 

[RCA]

what is the safe rate for liquidity these days???

Enough oddball things are going on with screwball sales agents and mortgage brokers, that safe rates don't always mean much. Sometimes, I have to walk away from assignments. Or rather, I tell the client there is a major problem with the property that needs to be taken care of before I can appraise it - and they eventually find some other dummy appraiser to give them their rubber stamp.

 

[MoistMitten]

Without tax incentives the cost is still higher than the return in "electric bill savings"

And, those figures are for "value in use", as in paying cash to get the solar panels, so it does not accommodate the "market value" consideration of a property value increase to a 30 year mortgage with interest payments over 30 years.

Oh and it just assumes that what the utility company reimburses the solar owner will remain at the rate ya all are calculating in the repayment numbers.

California Reduces Subsidies for Homes With Rooftop Solar​

Dec 15, 2022 Dec. 15, 2022. California regulators voted unanimously on Thursday to significantly reduce how much utilities have to pay homeowners with rooftop solar panels for power they send to the electric ...

This is not really relevant to how it is appraised.

Imagine you could lock in a rate of 350/m for electric over the next 20 years and you are paying less than you would otherwise already at current rates. That also assumes the standard increase in electric. As I stated before the offset is more than that. So even assuming 10 year at 350/m savings the cost is $47,580 in value. The 20 year (the most relevant imo) is $107,600

Thats where the actual value is.

 

[Meandering]

That's pretty funny, 350/m for 20 years.....................so, you're life as a single person will remain so over 20 years, never having kids and watching them grow up and leave home over those 20 years???

Oh, did we mention to you that appraisers must work from what is "typical"???

Or is it that as the kiddies leave home, and the usage decreases, the inflated price will compensate for a lower usage rate, all while ignoring the output generation of the panels is also decreasing???



Here is an article that answers some questions for those in La La land.

How Long Do Solar Panels Last? - Forbes Mag.​

How Long Do Solar Panels Last?

Get expert advice on improvements to your home, including design tips, how much you'd expect to pay for a pro and what to ask when hiring experts.

www.forbes.com

 

[Meandering]

and oh yeah, when does that "law" expire that "requires" electric utility companies to buy your solar generation?

And how much additional is that battery system and DC to AC converter so that you can use your self generated electricity once the political donors start whining about the cost of buying from homeowners???

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