Value For Solar System.

[PropertyEconomics]

Great,

But generally SFR are not income producing properties and buyers typically do not buy them based on the amount of income they can produce. But If we are going there, maybe should include rental info in those SFR reports, cause income is income, even though it is the tenant that will benefit from the solar power. But if it crosses my desk, better not be a positive adjustment for income and a statement that the income approach is not applicable, or was considered or not developed, or just blank boxes.

And the income is not contracted, it's variable based on individual usage, which is not yet market stabilized, and there are too many factors that influence the income, like shade, and no market proven evidence that a house with $X income will sell for more or less then a house with $X-20 income. And, that income is still depend on Government subsides which could disappear in a fiscal cliff (Ooops).

Here there are no checks from the utility company only credits, but only because the government has mandated that. As with all government mandates, they are only good until the opposite lobby gets more powerful. Or, as in the cases we are now seeing in industrial and commercial, they are only as good as the value of the carbon credit, because when the credit reimbursement is too low, there is no profit incentive to put these things up.

It's simply a justification of why we should "Add Value" because there is no consideration of using a clothes line instead of the dryer, using an electric water heater with a timer to cut off the flow of electric during non-use periods, and if the Expense of running the home were the real market accepted thought process, then no one outside of the desert and arid areas would pay more for central AC when they really only need it 3 to 5 days a year. Heck, you could use a solar water heater and not need a whole roof of panels.

Oh but what the heck. That's why I published the links so that if you want to Add value, then go ahead and here is something you can use to back up your thought processes. that is the really great thing about opinions. We can disagree, and yet still not be wrong.

Just make sure that Income Approach is filled out correctly.



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My recommendation is for you to simply refuse all assignments involving photo voltaic ... its obvious your understanding is not sufficient to adequately address the issue much less understand different approach to estimate value.

Carry on ... but find better examples than solar panels placed verticle on the side of a building ... really now.

 

[Meandering]

My recommendation is for you to simply refuse all assignments involving photo voltaic ... its obvious your understanding is not sufficient to adequately address the issue much less understand different approach to estimate value.

Carry on ... but find better examples than solar panels placed verticle on the side of a building ... really now.

Well Ghee whiz,

Thanks PE. I would recommend you do some more outside research instead of running around happy footed after work posting anything anywhere.

But hey, at least it lets us know you are still around and in decent health.

Be well kid.


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[PropertyEconomics]

Well Ghee whiz,

Thanks PE. I would recommend you do some more outside research instead of running around happy footed after work posting anything anywhere.

But hey, at least it lets us know you are still around and in decent health.

Be well kid.


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Marion .. my research into this topic is much broader than you can know. Your bias is not a good thing to possess as an appraiser .. that is my point. Your examples show bias, your comments about income show bias, and your lack of understanding how the dcf works and what it shows .. shows bias.

Im in great health, im still around, and I am well. Thank You!!

 

[Elliott]

I used Lobos' link to the Sandia Labs program and figure a few year old 4KW system in a sunshine state has a present worth of about $8,000. That the HO has to pay income tax is a bummer.

 

[Meandering]

Marion .. my research into this topic is much broader than you can know. Your bias is not a good thing to possess as an appraiser .. that is my point. Your examples show bias, your comments about income show bias, and your lack of understanding how the dcf works and what it shows .. shows bias.

Im in great health, im still around, and I am well. Thank You!!

You are welcome,

Wasn't much research into that F/D IVPI post.

But hey, I can understand happy feet.

Glad you are good.

I do not lack an understanding of DCF, write my own in excel and posted the link for a pre-formated one, just for solar panel systems.

The bottom line is you are selling a home, not a power plant.

And if you are going to make income based adjustments, then don't say the income approach is not applicable.


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[Meandering]

I used Lobos' link to the Sandia Labs program and figure a few year old 4KW system in a sunshine state has a present worth of about $8,000. That the HO has to pay income tax is a bummer.

Income tax, and increases the value of the home (???) higher real estate taxes??????

 

[Elliott]

Marion,
Figure 3% property tax on the 'system' ($60,000 Assessor's value--cost is value to them--so that takes a $1800/year bite) and 35% on the 'income' (another $1000 bite) and the real savings to the HO gets to be smaller and smaller. Maybe buying a Volt is better.

 

[KD247]

... Figure 3% property tax on the 'system' ($60,000 Assessor's value--cost is value to them--so that takes a $1800/year bite) and 35% on the 'income' (another $1000 bite) and the real savings to the HO gets to be smaller and smaller. ...

Should we be any more sophisticated (and precise) in our calculations than buyers are in theirs? Perhaps in terms of rationalization, but probably not in terms of analysis.

 

[prasercat]

While I normally see such systems in single family homes as optional redundancies (functional obsolescence) in areas on the grid, the analysis should be quite different in areas off the grid.

If I was appraising a single family house with solar photovoltaic as the sole means of electric power access (an area that is outside the grid), I think it certainly would open the door wide open for a full depreciated cost contributory value but not TOO wide open for DCF (since income is not normally a significant motivating factor for buyers of such property).

Such "off the grid" reliance on the solar panels would require an emergency generator as well that runs on gasoline or kerosene for times of insufficient solar power generation that stretches too long for the batteries to maintain; such as, in bad winter weather, prolonged cloudy days, etc. The generators and the batteries would also have a contributory value that should correlate well with a depreciated cost. It should be no different than any other mechanical; such as, a furnace, water heater, etc.

Comparing the power generation of the subject system per $1 invested with current systems should allow a functional depreciation adjustment, would it not? Physical depreciation (effective age) would require knowledge of the longevity of the subject specific system, its past maintenance, together with it's apparent physical condition - This would require a bit of targeted research.

For a 4-unit property off the grid, I'd rely mostly on DCF and somewhat on depreciated cost, at least, that is how it appears to me.

What do you say PE, am I on the right track with this?

 

[Meandering]

Oh come on Cat,

It's always a $4$ adjustment for the cost, then play with some depreciation to make that a value. Use the DCF to back it up, because every day the sun shines and every year it shines every day so why should there be any considerations other that the costs to install and the money saved?

I posted the link to the Appraisal Institute's guidance awhile back in this thread. That is approved appraisal methodology. Otherwise, it's just gonna have to depend on where you are and how your local market perceives it.

But I won't bet granny is so quick to shovel the roof in the snow to save some money. I wouldn't be.

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