Solar Value

[Elliott]

I was disappointed when AI announced their accepted theory of Energy Star homes valuation. I even took a seminar on it, but it just seemed like a politically correct thing to do or something they were pressured into doing or something they did to advance an agenda. It was contrary to the way I was originally trained by AI classes, which was to walk across the street from the subject, look at it, and ask, "how am I going to value this."

 

[Meandering]

Cigar,

Where do you find personal loan terms that are at 3.5% when primary mortgage rates are about a point higher?

Since when are personal loans less risky than mortgages, commanding lower interest rates?

Do we see some problem someplace?

.

 

[Mikeyvee17]

I am sure I am right that I found no financing program from their website. As far as impeachment goes, the OP's story starts with he paid $60k for solar panels the appraiser said had no value, then gets changed to the cost of the solar panels was actually only $30k but then after rebates was a cost to him of about $15.5k then if you do the math based on his second day loan terms, as the first day's stated loan terms don't work, so based on the second day's loan terms he had to put down $279 in cash to wind up with a monthly payment of $109.02, so yeah, I'd say he impeached himself from the beginning.

If I were to venture a guess of why he's here I'd have to be playing psychoanalyst. I am not a psychoanalyst but would venture his $60k imaginary cost has been used to impress neighbors and friends, and sounds really good when someone else says it's worth nothing. So, if we do the numbers and a bit of research, it's a losing position, financially, and there must be a need to inject cash, so get a new loan, based on a higher value. It did not happen for him and he's mad.

Again, I'd have to be playing psychoanalyst to answer that. But, I would venture why as the market was crashing did the AI meet with the Treasury and change the definition of disposition value from a future value to a current one? Couldn't have been that with a declining market, a future disposition would result in lower numbers than a current one? Nope, I have no idea what the AI thinks. But, I also have no idea why in the midst of an economic collapse, we suddenly need a solar program, universal healthcare and new, more encompassing free trade agreements. Just doesn't seem like an opportune time to expect people to come out of pocket for things they had done without for so long. But again I'm no psychoanalyst. I just read the market and report.

LoL!!!! I never said it cost $60k - keep pulling stuff out of thin air pal.

I am here because I thought my appraiser did not do his job correctly, clearly A LOT of you feel solar is dumb - But that is not the point, whether you agree with solar or not the original question was DOES IT have a value.

Stop ignoring the facts - Post #118 will show you the program from New York State with the loan interest rate and terms. You just don't want to admit you were wrong.

Have fun - I am done posting here and being mocked by a bunch of people who feel solar is not worth it and there is some political egotistical thing going on here.

I posed a question to the appraisal community - very simply that you cannot say something is invisible, therefore you MUST assign a value.

I never asked "Hey Marion, what are your thoughts on solar?"

 

[Meandering]

When you value an income stream, which for solar panels would be the "savings".

You better start questioning the projected longevity of those "savings". Every utility company, in every state is different. There is no law that protects net metering I could find. There is no mandate to consider residential owners as "providers" in the future. They are not commercial entities, so it falls outside of commercial laws.

The OP's electric company is stated by NY as volunteering to provide net metering. Well when you volunteer to do something, could you stop doing it tomorrow?

Back to my initial, historical, overall solar "savings" argument is,
Savings are based on life style.
A family with 3 young kids, has a different usage need, hence different "savings" than,
a retired couple,or
a single person,
yet,
All can live in comparable homes.

So the DCF is specific to who is in the home, not to "the market". Is it then value to "the market"?

Or is it the value to a submarket of occupants that would use a similar amount of electricity, and have a similar amount of savings (based on location and shade), and are using the same utility company as the subject, but may not be a similar home. Because the "savings" have nothing to do with the GLA, or the age. It has to do with the electric usage of the occupants from a specific electric utility.

.

.

 

[Randolph Kinney]

I posed a question to the appraisal community - very simply that you cannot say something is invisible, therefore you MUST assign a value.

Wrong. A thing has a cost, it may not have a value that a willing buyer of your home will pay.

 

[Meandering]

Mikey,

On the first day I told you at least 10 times your numbers did not work, and could not be what you stated. It is not my fault you show up day 2 with different numbers.

Mikey, do yourself a favor.

Call your utility company, ask them how long they project to maintain their net metering program, and see if you can get that in writing from them.

.

 

[Randolph Kinney]

Since the cash flow stream is favorable (assume it so), package it up and sell it like a bond with a fixed interest rate to an investor. After all, Mikey is an investor and that bond was worth $16,000 to him so he borrowed the money to arbitrage the deal pocketing the net cash flow. If anything negative happens over the life of the bond, to save his financial from loss, he would have to unwind his arbitrage position to stop loss.

 

[Meandering]

And never mind Mikey for a minute.

Do the loan math for the mortgage, to a buyer for the property,

The difference between the $200k, and $210k with the same loan terms was +/-$82k

Why would you pay that to save less than that?

A transfer of payments is not a "savings" No typically knowledgeable buyer would pay $82k to get $55k back, just so they could send their money to the bank and not the electric company. That's insanity at it's finest.

And then ouch,
Pay additional income taxes on that $55k?

yeah, Kool Aid all the way round.

 

[George Hatch]

Yet another question, why did the AI all of a sudden come up with a way to capitalize solar installations, that seems out of character for them, government pressure or government money?

The suggested solution of approaching the contributory value from an income perspective via analyzing all income and expenses is not new - it's a standard approach to the valuation of income streams that has been in use since long before any of us got into the appraisal business. The AI and its predecessors have offered a full range of instruction on how to perform such analyses for many years.

Suggesting that it could be used as a primary approach to value in an assignment involving a property type for which the Income Approach is never otherwise used by the typical buyers/sellers is ....interesting.

At the extreme comparison, it would be akin to using the Cost Approach to value an outdoor swimming pool in Fairbanks, Alaska. Somebody may fervently believe the amenity has a value in the market, and maybe it does; but it's costs of construction and its desirability to maybe 5 people in town may not be indicative of that market value to the typical buyers of the property.

 

[Mike Kennedy]

GH Suggesting that it could be used as a primary approach to value in an assignment which mandatorily requires development of an Opinion of Market Value based on the Sales Comparison Approach, involving a property type for which the Income Approach is never otherwise used by the typical buyers/sellers is ....interesting.

Seconded with additional factor.