How do you value Solar in a home appraisal?

[Meandering]

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.

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And once again, you did not include the additional interest payments in a 30 year mortgage, for the initial cost of the solar panels and their installation - in order to consider solar panels as a "property value" increase. Oh yeah, and let's not forget about that home insurance that has to cover those panels. What did State Farm just tell California? They need a 52% increase in their rates to stay in California, but ghee, without those solar panels pushing up the "value of the property" the increasing insurance rate would be for a lessor amount. Cheaper to pay the electric bill and cut down on your usage.

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[George Hatch]

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.

View attachment 88673

With respect, the calculators work more/less the same across the nation but the actual values-upon-resale have been very different by locale and sometimes is different by price range within the same region. That's not an opinion, it's an observed fact and that observation goes back years. That means the buyers in some areas mostly act inconsistently with the models which in turn means that insofar as the concept of market value goes the models are sometimes incorrect.

Sales prices are established between the buyers and sellers. It's literally their actions that lead to these results. We have nothing to do with those negotiations. What the appraisers are tasked to do is to observe and report what the market participants are actually doing. We don't create or establish values or variations in sale prices attributable to the various features. .

Virtually everyone on this forum is a professional appraiser with a minimum of 15 yrs experience. That experience consists of looking at real estate transactions specifically for their respective values. Not just the individual property being appraised but every sales action they are considering as comparables which will usually be at least 2x -3x as many as they end up citing in the report. Massive numbers of sales transactions in the real world. A professional appraiser working to specs is looking at and analyzing for value more properties in a week than the average real estate agent is looking at in a year.

That's who you are telling "not relevant to how it is appraised." The job title isn't the relevant aspect in this part of the discussion, but rather the years of exposure to how market participants react.

So now you have come, you asked the types of appraisers who participate in a forum with their peers on various aspects of appraising. You have run the various considerations past us as if we hadn't previously done so ourselves in *prior* threads about PV solar installs and govt subsidies going back 10 and 15 years, and you're arguing the point with appraisers who are telling you that sometimes there's no reaction in the market that can be isolated from the rest as having added to the resale values. We even had one of the executives chime in whose day job is as a senior executive at one of the Government Sponsored Enterprises, who is a genuine subject matter expert in several aspects of professional appraisal practice in addition to their competency with the GSE appraisal policies. We're telling you that it's the reactions in the market that count. Not the results from the calculators which are sometimes correct but are often incorrect.

If you're waiting for appraisers to ignore their own experience on the topic and defer to the calculators then that's a tough ask. Just sayin'

 

[RCA]

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.

View attachment 88673

In California, the government and power companies are continuallhy changing the laws, so that such projections are invariably optimistic. The future IS the future --- and you should know by now how little that means. My rule is NEVER to project more than 8 years out. And of course take into consideration the probability of catastrophic events. For $9.95, you can get a pretty good risk assessment report for a given property through

Augurisk: Explore Disaster and Crime risk in the US

Discover Natural Disaster and Crime risk for cities and counties in your state, including Flood, Hurricanes, Tornadoes, Wildfires, Drought and Earthquakes.

www.augurisk.com

Note: I think it is likely that the actual odds of a major earthquake at any one specific location in the San Francisco Bay Area, or somewhere else in California are exaggerated by the government in order to accelerate retrofitting old structures. The "Augurisk" report I bought for my home indicates that the probability of an MMI 8.8 quake (approximately equivalent to a 6.8 earthquake on the Richter scale, is only 2% for the next 50 years. However, i think that is for a specific location in the Bay Area. The Richter scale is for the source of the earthquake. And that is the difference, - a good thing to be observant of. There might very well be a 7.0 (Richter Scale) earthquake somewhere in the SF Bay Area, - but that only applies to the source of the earthquake. If you live a distance from the source, it may very well present less of a threat. Also, properties on bedrock are less impacted, while properties on land fill and loose soil and sand more so via liquifaction.

 

[RCA]

In California, the government and power companies are continuallhy changing the laws, so that such projections are invariably optimistic. The future IS the future --- and you should know by now how little that means. My rule is NEVER to project more than 8 years out. And of course take into consideration the probability of catastrophic events. For $9.95, you can get a pretty good risk assessment report for a given property through

Augurisk: Explore Disaster and Crime risk in the US

Discover Natural Disaster and Crime risk for cities and counties in your state, including Flood, Hurricanes, Tornadoes, Wildfires, Drought and Earthquakes.

www.augurisk.com

Note: I think it is likely that the actual odds of a major earthquake at any one specific location in the San Francisco Bay Area, or somewhere else in California are exaggerated by the government in order to accelerate retrofitting old structures. The "Augurisk" report I bought for my home indicates that the probability of an MMI 8.8 quake (approximately equivalent to a 6.8 earthquake on the Richter scale, is only 2% for the next 50 years. However, i think that is for a specific location in the Bay Area. The Richter scale is for the source of the earthquake. And that is the difference, - a good thing to be observant of. There might very well be a 7.0 (Richter Scale) earthquake somewhere in the SF Bay Area, - but that only applies to the source of the earthquake. If you live a distance from the source, it may very well present less of a threat. Also, properties on bedrock are less impacted, while properties on land fill and loose soil and sand more so via liquifaction.

To make this a little clearer: There probably is a 50% chance of a 6.8+ earthquake in the SF Bay Area by 2044. But if the center of the earthquake is in the North Bay, say Santa Rosa and you live in the South Bay on the foothills of Saratoga, you may not experience any damage at all.

Durning the 1989 Loma Prieta 6.9 magnitude earth quake, I was working for Integral Systems in Walnut Creek, about 50 miles away, and we had moderate shaking, - but no damage that I know of. Oakland, about the same distance from the epicenter had the worst damage of course to the collapse of the Bay Bridge and the Cypress Street Viaduct on Nimitz Freeway - which caused the death of 42 people. The Marina District of San Francisco, 60 miles from the epicenter, - which sits on landfill, had the worst damage to houses, with 70 completely destroyed or uninhabitable. So, a 6.9 earhquake can do damage out to 50 or 60 miles from the epicenter, depending on how solid the ground is. But the SF Bay Area is nealy 200 miles long and 60 miles wide. My house was about 50 miles from the epicenter, but it experienced absolutely no damage at all. Those who live on landfill need to worry the most. However, a good deal of the transportation system, as well as commercial real estate, is built on landfill. So, the potential damage to the infrastructure is one of the biggest concernns, especially to businesses.

There is always the possibility of another 8.0 earthquake, and that would be absolutely devastating to the whole region. I don't believe having earthquake insurance would do much good, as the insurance companies carrying it would probably just go out of business before completing not much more than a small fraction of the claims.

 

[Artemis Fowl]

Been thinkin about eathquakes a lot lately?

 

[MoistMitten]

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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They dont buy it till the end of the year, its NET usage for KW.

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???

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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

Yeah the numbers I sent take degradation into account. I produce more than 350/m around... But assuming standard degradation at 25 years the panels will be producing about 1262KW/m. Currently its at 1602KW/m.

Keep in mind thats average... Winter is where heat pumps are more expensive than NG or P, but not so with NET metering in this situation.

Is it typical to not have an electric or gas bill for any house? Seems fairly common sense to me that that is never 'typical'.

From what you sent above. It degrades and would still be useful for 40+ years

"Solar panels naturally experience a decline in efficiency due to exposure to sunlight, temperature fluctuations, humidity, mechanical stress and the quality of materials and manufacturing. On average, most solar panels have a yearly degradation rate of about 0.5%. This gradual loss in power output means that after 25 years, a solar panel’s efficiency is typically expected to be around 87.5% of its original capacity."

This thread is about finding the correct way to value paid off panels, not about 'la la land' as you put it. I assure you when I make a choice its backed by as many variables as I can find... Degradation was considered before the cost when choosing the panels. I do find the tone of your post funny so I appreciate that.

 

[TerryRohrer]

In my experience, promises of useful life of solar components are almost always overstated and maintenance/repair costs are ignored/understated. I appraised a large, newer (10 year old) off-grid log home. When I arrived to do the inspection, I could see power poles dropped across the prairie to within a short distance of the dwelling. When I inquired about those, the caretaker told me the battery bank had failed (for the second time), and instead of paying another $25,000 to replace it, the owners were paying the $50,000+ cost to extend the wires.

For those who insist that appraisers who don't "give solar systems value" are biased and unobjective, I have a cabin site I want to electrify. The cost to run wires 60 feet across the street will exceed $5,000 (at prepandemic costs). I would install solar in a heartbeat if it made sense, but I understand what the other appraisers chiming in here are saying. Also, if you look hard for the truth, there are a few individuals around who both very clearly understand all aspects of solar, and will state the truth. I have come across a couple who bluntly acknowledge that installing solar on a property where grid power is available, makes no sense.

 

[Terrel L. Shields]

We would not use a sale of a home with a lower cost above ground pool to try to extract the contributory value for a custom-designed inground pool. Just as all pools are not equal, neither are all PV systems.

Which is why neither one of them (Solar nor pools) are very easy to accurately value. I have sales where I knew the original cost of a pool complex (shower room, underwater lights, heater, etc.) appears to contribute less than zero - implying probably a desire to get out of the property by the seller? I cannot account for it otherwise, because some less complex pools do appear to add value in property of similar size and age. In the past 10 years I have valued 2 homes with indoor pools. One was an add on - the room includes a bar and pool room as well as a waterfall...wood laminate beams in the ceiling - other pool was - glass enclosure on 3 sides and roof, with a lake view. You cannot even compare the two pools, let alone compared to an outdoor pool. And being a VRBO, do you think it really can be valued by "comparable" sales?

Ditto the solar panel - what way is going to be "better" than cost savings in light of the relative rarity of a sale of a similar sized solar array?

We're telling you that it's the reactions in the market that count. Not the results from the calculators which are sometimes correct but are often incorrect.

Again...find me a better way than cost or income (savings). You're in S. CA. Probably every other comp has a solar panel. Here we are seeing more and more of them yet the sale of one with panels - well, they are few and far between. And an array behind a Manf. Home on a shed roof isn't going to have the same market reaction as the identical array on a new 2,200 SF house. So, how do you value it without using a large dose of heuristic assessment?

I appraised a house once with "passive" energy savings. I found a comp. Utterly impossible to extract an "impact" because the house itself was above average for the market in quality and located favorably with access to a clear water creek. And, being a single 'comp', if you will, once again it is pretty dicey to claim a single sale tells you anything statistically speaking. It is pretty weak support. And by 'weak' I mean the margin of error is huge. You can guess just as accurately.

PS- passive design means the house is oriented to the sun, super-insulated and might have a vent chimney to circulate air naturally, and in this case a Trombe wall to absorb heat then an insulated curtain closes at night to radiate the heat out.

 

[Dublin ohio]

Just using the rate and bill info the op has provided. It would appear that heir usage is twice the average usage in the State of Michigan. Their system is also twice as large as the average system. The OP states that their total monthly usage also includes the charging of an ev. The average ev driver uses approx 11.81kwh/day. That equals approx. 354kwh/mo. Which would appear to be approx. 25% of their average monthly usage. So now you have reduced the pool of possible buyers that would get the same savings as the OP is trying to sell

 

[MoistMitten]

In my experience, promises of useful life of solar components are almost always overstated and maintenance/repair costs are ignored/understated. I appraised a large, newer (10 year old) off-grid log home. When I arrived to do the inspection, I could see power poles dropped across the prairie to within a short distance of the dwelling. When I inquired about those, the caretaker told me the battery bank had failed (for the second time), and instead of paying another $25,000 to replace it, the owners were paying the $50,000+ cost to extend the wires.

For those who insist that appraisers who don't "give solar systems value" are biased and unobjective, I have a cabin site I want to electrify. The cost to run wires 60 feet across the street will exceed $5,000 (at prepandemic costs). I would install solar in a heartbeat if it made sense, but I understand what the other appraisers chiming in here are saying. Also, if you look hard for the truth, there are a few individuals around who both very clearly understand all aspects of solar, and will state the truth. I have come across a couple who bluntly acknowledge that installing solar on a property where grid power is available, makes no sense.

Yeah Im not a fan of batteries while on the grid. If youre off grid it makes sense. The net metering is just a way to measure the in and out of a system and only charge for what you used. Most inverters turn off when the grid goes down for safety. Im a fan of having a NG or P generator on site for those situations.