Let's rewind. You are a layperson insofar as appraising goes. You came here and asked us how we value this feature:
"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."
So this thread is not about you or anyone else teaching us how to do what we do. We're the people who do this appraising thing for a living. Not some solar salesman or some oil company executive or some biased political activist (in either direction), or even some consumer (like you). Everyone has an opinion and - in terms of what we are doing - they're all strictly subordinate to our observations of what the buyers and sellers do as a group.
We never asked you how you think we should value these systems. We are not unfamiliar with the availability of these calculators. But when even the studies produced by appraisers who advocate for these issues are showing that the market reactions to this feature in San Jose, CA are different than the value in Austin TX (both areas being studied because they have a strong political bias toward these issues) are showing different market reactions that is a result that doesn't surprise any appraiser who has run into solar during their normal course of business. Which is all of us in the major metros.
One other factor that we understand but which you apparently don't is that the market psychology for single family homes isn't entirely driven by logic and reasoning.
"It's not a house, it's a home" is a talking point that the realtors use to considerable effect. The reason that selling point is effective is because people get emotionally involved with the values of their homes, just like they do with their cars and their boats and their kids accomplishments and all the other status symbols which often contribute to someone's sense of personal identity. That talking point doesn't get used in the marketing of any other property type because nobody envies me for owning a 10,000sf industrial or a 2,000sf storefront or a 40ac parcel of land or a 20-unit apartment building. THOSE buyers and sellers actually do act rationally, they do consider the dollars and cents. Not the interior decor or where the kitchen is in relation to the living room or the garage or what the test scores are in the schools.
So yeah, maybe buyers and sellers should act strictly according to the numbers. But in real life we commonly see that they don't. It's not never, but it's also not always.
----------------------
Another parallel in appraising that all appraisers understand is when a home has (for example) a built-in pool. The costs of building and operating a backyard pool are the same in a given region (Like southern Calif), but the same pool will have different contributory values in different neighborhoods and different pricing tiers. Within the same region. The money is the same but the returns are different. Tennis courts, equestrian features, workshops, additional garages, extreme kitchens, accessibility features for the disabled - there are a whole bunch of "atypical" features which appraisers run into in their work. In that regard there is nothing special about solar installs being atypical in some areas.
I live/work in California and my observations over the years is such that I can NEVER proceed off an assumption that there is a discernable value-add or what that number will be. Sometimes there is and sometimes there isn't, even with the systems that are fully owned. Sometimes there's a value-add when the system is leased and the property owner doesn't even own it. Some of the lenders tell us not to attribute value to a leased setup but that doesn't alter the point that if a bunch of the buyers are paying more because the install is complete it then that conduct speaks to what the buyers and sellers are doing, independent of what the lenders think they should be doing. And independent upon how those lenders make their lending decisions.
My point is that regardless of our past experience with this feature it becomes unprofessional for us to assume that (for example) a market area that was returning 25% of the costs last year will be doing the same this year. Or vice-versa with a market that's returning 110+% of the costs. Unless it's a neighborhood we frequent, we ALWAYS have to look at the buyer/seller behavior rather than to assume those actions. Even if we think we already know how it will work out.
You asked, we answered. We seek what the majority of the buyers and sellers in that particular neighborhood are actually doing. Not what the people who sell these systems think the buyers and sellers should be doing.
