Solar panels - PV Value estimated energy value

[J Grant]

Why didn't you just ask that question?

From Copilot:
do home buyers research pv value prior to buying a house with solar panels?

Yes, home buyers generally research the value of a PV (photovoltaic) solar panel system when considering buying a home with solar panels installed. They want to understand the potential benefits and costs associated with the system, and how it impacts the overall value and expenses of the home.
Here's why and what they consider:
1. Financial Benefits:

• Reduced electricity bills: Home buyers are attracted to the idea of lower or even eliminated monthly electricity costs. They research the system's expected energy output to estimate potential savings.
• Net metering: They investigate whether the home's location and utility provider offer net metering, allowing them to potentially sell excess energy back to the grid and receive credits.
• Increased property value: Studies show that homes with solar panels generally sell for a higher price than comparable homes without them. Buyers are willing to pay a premium for the long-term benefits and energy savings.
• Return on investment (ROI): Buyers consider the payback period of the system - how long it will take to recoup the cost of the solar installation through energy savings.

2. System Condition and Performance:

• Age and condition: The age and maintenance history of the solar system are important factors. Buyers want to ensure the system is in good working order and has remaining lifespan.
• Energy production data: Information about the system's historical energy production provides insight into its real-world performance.
• Quality of installation: The reputation of the installer and the quality of the components used can affect the system's longevity and performance.

Caue I trust my own 30 years in RE /appraisal and the feedback from local RE agents and interviews with parties more than a generic Co Pilot answer -

However, their answer is buyers research PV value in general, not that buyers performed the complex PV calculation.

 

[alebrewer]

However, their answer is buyers research PV value in general, not that buyers performed the complex PV calculation.

If you think this is complex, I have serious concerns about your ability to do paired sales analysis:

 

[J Grant]

If you think this is complex, I have serious concerns about your ability to do paired sales analysis:

View attachment 101110

They are entirely different things and based on your posts over the years, I do not care bout your false concern -
As usual, you start arguing to argue and ignore the point that not just I but others, such as George Hatchh, made that the market determines the adjustment, not a formula.

 

[TerryRohrer]

If you think this is complex, I have serious concerns about your ability to do paired sales analysis:

View attachment 101110

That is hardly the entire input required.

 

[alebrewer]

They are entirely different things and based on your posts over the years, I do not care bout your false concern -
As usual, you start arguing to argue and ignore the point that not just I but others, such as George Hatchh, made that the market determines the adjustment, not a formula.

I hadn't argued one single point until you engaged me. I simply pointed out what AI had to say about the posts. I guess you could say AI was arguing with you and George. BTW - markets determine value, not adjustments. You're welcome.

 

[Steelers74]

I've wasted my time a couple times researching and deriving an adjustment for solar panels only to have the client come back and tell me to remove the solar panels from the valuation. Neither were leased but still had a couple years payments to own left and it just seemed the lenders weren't interested in it and wanted it valued without solar.

 

[Surf Cat]

The OP is in California. The "there are no sales" situation doesn't exist here. There are sales involving solar and every one of them have have their own respective comps from which an appraiser can extract that adjustment factor.

^^^ This is how I determine an adjustment factor for solar if there are no recent, competitive sales like that of the subject with owned solar panels.

 

[George Hatch]

If an appraiser can develop an adjustment factor from sales data then it literally doesn't matter what the calculator concludes. MV is established between the buyer and seller. Not off a model override of the market participants.

We're trying to get to "most probable in the market", not "how buyers and sellers SHOULD act".

It is my assumption that eventually this attribute will become so common that the difference between the Haves vs Have-Nots might possibly exceed the cost to cure. Especially if the grid power rates inflate faster than the CPI.

 

[J Grant]

If an appraiser can develop an adjustment factor from sales data then it literally doesn't matter what the calculator concludes. MV is established between the buyer and seller. Not off a model override of the market participants.

We're trying to get to "most probable in the market", not "how buyers and sellers SHOULD act".

Agree. The problem with these formulas, as well as click software charts and graphs, is that they look impressive. All that math !! All those statistics! Wavy lines and dots ! I once posted an EKG readout here on the board as a property trend chart and nobody knew the difference. Scary.

These tools have a place but they can be misleading, if the actual market of relevant sales and listings and buyers say something different.

My fear is that as more competent and experienced appraisers retire and the trend continues toward speed and automation, the skill set of oversight might be lost. So far, enough reviewers are trained to spot it - whether that will continue is unknown.

 

[George Hatch]

I believe appraisers adapt to the market, so by the time the clients and users get to actually rejecting what they consider inadequate, the majority of appraisers will almost always stay one of two steps ahead of that.

What rattles me is

Appraisers using an app they don't understand because it's labeled as the EASY button​

Lenders accepting that outcome because THEY understand those apps even less than the appraisers​

Meanwhile and regardless of what anyone else says or what the AIs word-vomit, the buyers and sellers are still going to make their own decisions independently of the modeling. So we'll have demonstrable adjustment factors in the market but the appraisers will bypass that comparo because it's easier to push the EASY button. And easier to sell that outcome to the also-clueless underwriters.

Will a worst case scenario on the usage of this app make a significant difference to the pricing of properties in the market? I don't think so. Perhaps I'm allowing myself to fret too much about it. Maybe the expediency and consistency factors of everyone doing it the same way is what matters more.