VA Solar Panels

[KenAZ]

I did a VA appraisal on a home with prepaid leased solar panels that they got 1 year ago. It was a purchase and it was Tidewatered. I know FHA and FNMA will not let us give them value. The SAR told me to remove the adjustment. I responded that as far as I know, VA has not rendered any circulars or rulings that Leased Solar panels can;t be given value.

Based on your valuation you’re expecting the new owner to continue to renew the lease to maintain the added value which cannot be assumed. The panels are not owned and the temporary benefit of a prepaid lease does not add lasting value to the collateral for the duration of the loan. I have never seen value given for any leased property as it is not a permanent part of the structure. If value is given to leased property, it is like giving value to a hot tub or above ground pool which makes a property more attractive to some buyers but is not a permanently affixed to the structure so it’s given no value on the grid accordingly.

I know we have discussed leased solar panels in these forums and there is a wide range of opinions, but I do not think the SAR has the ability to refuse that an appraiser make an adjustment on solar panels.

Can anyone here give me some advice or suggestions?

 

[Digger88]

why would a sar tell you to remove an adjustment when they have the power to adjust values at their own discretion? weird

 

[Deleted member 80407]

I am not a VA appraiser. Have 1 question. Do you have market evidence to support the adjustment for leased solar???? In some cases there can be a negative adjustment warranted as well as a positive adjustment. I have seen some markets where leased solar has a negative impact on value.

 

[KenAZ]

The value is very difficult to determine because if it is a no money down lease then it is worthless, but if it is a prepaid that covers all your electric bills for 20 or more years, it is basically at the most worth the electricity you would save in 5 or so years. The real problem is that MLS does not give the lease information in the sales, so there is no way to prove solar adjustments for leased panels. Probably the most accurate rate is 1/3 of what they put down on the lease.

A lot of people are leasing through Solar City, which has the worst deals on the market but some really good salesmen. Those are most likely the ones that add zero or negative value. The lease payments are many times the same as what the electric bills were, and they increase every year. I wouldn't buy that!

 

[nicholz12]

I am not a VA appraiser. Have 1 question. Do you have market evidence to support the adjustment for leased solar???? In some cases there can be a negative adjustment warranted as well as a positive adjustment. I have seen some markets where leased solar has a negative impact on value.

Exactly! Good point!

 

[Lycabull]

I did a VA appraisal on a home with prepaid leased solar panels that they got 1 year ago. It was a purchase and it was Tidewatered. I know FHA and FNMA will not let us give them value. The SAR told me to remove the adjustment. I responded that as far as I know, VA has not rendered any circulars or rulings that Leased Solar panels can;t be given value.



I know we have discussed leased solar panels in these forums and there is a wide range of opinions, but I do not think the SAR has the ability to refuse that an appraiser make an adjustment on solar panels.

Can anyone here give me some advice or suggestions?

Have you tried asking one of the reviewers at your RLC?

 

[CindyR]

Did you have a good explanation in your report as to why you believed an adjustment was warranted? Especially for leased solar panels. Maybe fully owned solar panels can be considered part of the real property but I don't think leased ones fit my definition. And an SAR can 'ask' you to do anything they want; if you strongly disagree you can refuse. And you can escalate it to the RLC but I don't think I would want to waste their time with it either even if I thought I had good market evidence to support said adjustment. Let us know how it comes out please.

 

[Inlandchuck]

I did a VA appraisal on a home with prepaid leased solar panels that they got 1 year ago. It was a purchase and it was Tidewatered. I know FHA and FNMA will not let us give them value. The SAR told me to remove the adjustment. I responded that as far as I know, VA has not rendered any circulars or rulings that Leased Solar panels can;t be given value.



I know we have discussed leased solar panels in these forums and there is a wide range of opinions, but I do not think the SAR has the ability to refuse that an appraiser make an adjustment on solar panels.

Can anyone here give me some advice or suggestions?

I recently completed a VA appraisal with the subject having Solar Panels. I made a Solar Panel adjustment and had no problems, loan has been closed. You are right no one can tell you what adjustment to make or not make. Your name and license number are on the appraisal. Adjustment for leased Solar Equipment I think are ill advised, if the equipment is owned then an adjustment can be supported.