Unable to find comps which have "owned" solar panels. What to do?

[The Scholar]

I'm in a market where the overwhelming majority of solar panels on homes are leased and are therefore not given any value in the appraisal. I am appraising a property in which the homeowner owns the solar panels and am unable to find any comps in which the solar panels are owned. I see my best option as explaining the situation in the report and stating that comps with "owned" solar could not be located and that the contributory value of the solar panels is deemed to be negligible since the majority of properties in the subject's marketing area which have solar panels actually lease them. Any suggestions on how to properly phrase this are greatly appreciated.

 

[ramrcdk]

What could be value-extracted for Leased Panels?
Where Owning is not-existent are you saying owning is a total $0? Then this may be a 100% super-adequacy
in terms of market where owning is a 100% deficit .
Explain what is found in market for the reason of your reconciliation and hope UW doesn't require a bracketing example.

 

[J Grant]

Just reconcile it at the higher end of value and explain why. There is no way to extract a supportable adjustment , and if majority of homes are leasing solar panels then dominant market is showing low demand to actually own the panels in the market area.

Reconciling at upper range of shows you recognize there is likely some contributory value for owned solar panels, but due to lack of comps as a basis to line item adjust, the reconciliation is where it is placed.

 

[alebrewer]

There is no way to extract a supportable adjustment

Well, technically there is - but the agencies won't allow it... It's the present value of the future stream of income/savings. That's exactly how a borrower would value it.

 

[J Grant]

Well, technically there is - but the agencies won't allow it... It's the present value of the future stream of income/savings. That's exactly how a borrower would value it.

Not necessarily how a home buyer borrower would value it.

That is how the first retail from new from the company buyer who purchases the solar panels as a stand alone add on item values it.

A house buyer is purchasing the whole house and the solar panels are just one feature, which to some buyers matter a lot, to others a little and others not at all.

 

[alebrewer]

Not necessarily how a home buyer borrower would value it.

That is how the first retail from new from the company buyer who purchases the solar panels as a stand alone add on item values it.

A house buyer is purchasing the whole house and the solar panels are just one feature, which to some buyers matter a lot, to others a little and others not at all.

Ok - let me make sure I've got this straight. If you're a home buyer, and you're considering a home that has 'owned' PVS, you're not concerned about how much money you will save each month, and that concern doesn't weigh on your purchase decision? You continue to surprise me, J. I thought everyone would be interested in how much money they'd be saving...

 

[glenn walker]

I treat them much like older built in pools In my area about 1/4 to cost new or say a minimal $10,000 to $15,000 and explain no comparables found. A far as resale the truth is almost zero as the originator buyer got the Federal tax credit and around here buyers only want it if its free. Also 90% of so called owned are really mortgaged with a Second Solar lien at 8% and amortized over 10 years and so in many cases after monthly loan payment its almost a wash and no savings at all.

 

[J Grant]

Ok - let me make sure I've got this straight. If you're a home buyer, and you're considering a home that has 'owned' PVS, you're not concerned about how much money you will save each month, and that concern doesn't weigh on your purchase decision? You continue to surprise me, J. I thought everyone would be interested in how much money they'd be saving...

There is reason the agencies do not want the appraisers doing a mechanical income stream/cost/savings calculation. Again, that is how a retail stand alone item solar panel purchaser decides, it is the spiel the sales person gives them.

Yes, a buyer who will purchase a home with solar as PART of the home on the open market is concerned with how much money they save, but like any savvy buyer they would want to pay as little as possible upfront for the feature, otherwise they are just pre paying up front for future savings.

If solar panels are not popular in an area, then electric costs are part of life for homeowners and they would rather spend on a pool, a new kitchen etc. If there is a growing demand for owned solar panels, at least some comps within a year sold would have them.

 

[glenn walker]

There is reason the agencies do not want the appraisers doing a mechanical income stream/cost/savings calculation. Again, that is how a retail stand alone item solar panel purchaser decides, it is the spiel the sales person gives them.

Yes, a buyer who will purchase a home with solar as PART of the home on the open market is concerned with how much money they save, but like any savvy buyer they would want to pay as little as possible upfront for the feature, otherwise they are just pre paying up front for future savings.

If solar panels are not popular in an area, then electric costs are part of life for homeowners and they would rather spend on a pool, a new kitchen etc. If there is a growing demand for owned solar panels, at least some comps within a year sold would have them.

I have taken two green courses crunch numbers back forward sideways and in most case this is the biggest scam ever pulled off and much like electric cars or hybrids which are often emotional purchases and or emotional the for the federal tax credits. Used and on resale value drops off a cliff . The Realtors around here dont even like them as their sellers get upset that a two year old system often will return almost nothing in a resale. What is doing good is newer Dual Pane window as they both insulate and make the homes exterior look much better.

 

[Terrel L. Shields]

Gee. I guess a chicken farm can't be appraised by the income approach due to agency resistance...no matter it makes $250,000 a year. So the appraiser isn't going to let anyone influence their opinion....oh wait, this is FNMA which trumps USPAP, TAF, Dodd-Frank, and AIR. I remember listening to John Brennan complain that the appraiser of his house in California "gave" zero value to the solar panels...back about 2013 or so when he gave a talk here in Arkansas. He forced the issue then and they added about 40% of the cost - what based on I have no idea.