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Solar Water Heater Adjustment

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MarkRichmond

Thread Starter
Freshman Member
Joined
Jan 16, 2002
I have yet to run into one of these so I would like to know what any of you adjust for a solar water heater system (appears to be working). This hot water heater is in addition to a standard water heater and it does not heat the house (they have GFA).

Thanks,
Mark
 

Steve Owen

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified General Appraiser
State
Missouri
In my market, I wouldn't make any adjustment at all unless I could find the comps to prove it.

In the cost approach, I would put in the cost to build it, then deduct an equal amount as functional obsolescence (superadequacy) UNLESS I could find data to show that the market would pay extra for it.

Now a solar heater for a swimming pool is another matter. I have seen market data showing that the market will pay for one of these. (But, not quite as much as it costs). Keep in mind that all of these comments are for my market; things might be different in your neck of the woods.
 

Richard Carlsen

Elite Member
Joined
Jan 15, 2002
Professional Status
Licensed Appraiser
State
Michigan
I agree with Steve. I never do any adjustment for solar water heaters.

I've had several of these up here in Upper Michigan where the sun really does shine. There are not enough sales to demonstrate that the market will pay additional for them. Just looking at the things on the side of the house or on the roof, you know that there has got to be a negative reaction from a buyer when they first see these gizmos.

My justification for not putting any adjustment would be to state that if there were a positive reaction to solar water heaters, there would, as a consequence of the normal market reaction, be many more of them on the houses in the market. The fact that there are so few is an indication that market is ambivalent at best about solar water heaters.
 

Restrain

Elite Member
Joined
Jan 22, 2002
Professional Status
Certified General Appraiser
State
Florida
OK. Here's a simple test. Estimate or obtain the "savings" from a conventional Hot Water Heater. Take it over the year, then look at the cost to install the solar hot water heater. The last time I did it, the recovery time was 20 years. That's not worth installing unless you are a tree-hugger and want to throw money at it. Not only that, it has to be removed and re-installed when you work on the roof or replace the roof, increasing your cost.
 

Jo Ann Meyer Stratton

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Arizona
Actually, the alternative to a solar hot water heater is a tankless water heater. Notice the word hot isn't in there because there is no storage of hot water with a tankless water heater. Cut my gas bill in half and I can run every appliances that needs hot water at the same time every hot water faucet is running full blast--and nobody runs short of hot water.
 

Richard Carlsen

Elite Member
Joined
Jan 15, 2002
Professional Status
Licensed Appraiser
State
Michigan
Jo Ann;

It’s an old joke I used to tell my real estate buyers. Technically there is no such thing as a "hot water heater". If you had hot water, you would not need to heat it. Therefore there are only "water heaters". (I know. Bad joke and that’s why I’m an appraiser now.)

The tankless are more efficient but the initial outlay is high thereby taking a while for the payback long. Also, they are most efficient in smaller usage houses where smaller amounts of hot water are used at one time. In a larger house with say a dishwasher, washing machine and a teenager taking a shower at the same time, you need a fairly large, expensive unit.

I have run into only two of them in northern Michigan in 9 years.
 

Judy Whitehead (Florida)

Senior Member
Joined
Jan 20, 2002
Professional Status
Certified Residential Appraiser
State
Florida
Solar water heaters are relatively common/popular here in the "Sunshine State."

I think it would be almost impossible to prove a contributory value to a solar hot water heater, as most homes have other "features" that also contribute to the purchase price. I certainly include it in my cost approach, but I seriously doubt that it contributes more than "Oh, how nice!" to the contributory value.

Sometimes I have to put on my "real estate agent" cap (Sorry - I sold real estate for 10 years before I "saw the light" and lucked into being an appraiser." )

For most "extras" especially those that are unusual in your area and are relatively inexpensive (under 2 grand) to construct I don't think I would make an adjustment. Obviously they are not common in your area if you have not encountered one before. I usually try to think in terms....if everybody "wanted one" then they would be on every house.....
 

Jo Ann Meyer Stratton

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Arizona
My cost was around $600, it is quaranteed for 25 years and can be used as I stated before-by everybody and everything at the same time. No water is being stored or reheated--it is only heated in the pipes when being used, that is why it cut my gas bill in half. I have appraised several homes with those, the owners all raved about them and so when we did some remodeling I decided to go with one. The reason that got me started to think about them was its size--it is about the size and shape of a medium sized suitcase, fit in a former small coat closet which meant I could incorporate the former closet area for the water heater and furnace into my dining room (went with a gas pack at the gable of the house for heating/refrigeration, with the evaporative cooler below instead of on the roof).

That is the difference between a normal hot water heater and a tankless water heater. The normal one stores hot water and has to constantly reheat the hot water--so it is a hot water heater. The tankless is a water heater only, no hot water being stored or being reheated.
 

Judy Whitehead (Florida)

Senior Member
Joined
Jan 20, 2002
Professional Status
Certified Residential Appraiser
State
Florida
On the contrary - what you are describing was tried here. I've only seen one home equiped like yours. Truthfully, I don't know why it didn't catch on - only that the one home I knew decided to have that "instant hot water" converted to a regular hot water heater. Of course you have gas (I assume natural) and that may reduce your costs. The only "viable" energy source here is electric and my suspicion is that it doesn't work as efficiently as gas. It sounded like a good idea to me - even with electric, but it didn't catch on.
 

Jo Ann Meyer Stratton

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Arizona
A tankless water heater for the whole house and an "instant" hot water heater for one room are two completely different things. Although my tankless has the full name of Automatic Instantaneous Type Water Heater. Since I have had mine and based on the info I got from other home owners-I am kinda going--why aren't all water heaters like this??? A standard water heater has to be replaced about every 8-10 years and depending on the size, runs out of hot water, springs leaks, have to be drained occasionaly and costs a fortune to keep that hot water hot. The website for my heater is www.cehot.com, the brand is AquaStar and they can be either gas (natural or propane) or electric. I have natural gas. A new home about 5 miles away is putting in a propane gas, same model and brand. I will interested to find out how they like theirs after they use it for awhile. Natural gas isn't available there, electrical rates are very high in our area. Dug out an energy efficient article about them from 1995, the writer uses the terms whole house tankless water heater (mine) or mini point of use units that are usable for a single bathroom or kitchen.
 
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