Value of whole home solar PV system

[Tim The Enchanter]

How much is the monthly payment? Anywhere near $500 by chance?

 

[Renee Healion]

Mike, do yourself a favor and turn it back in to the client. If they want to meet secondary mkt requirements they need an appraiser who is already qualified. This is a higher requirement than USPAP which says that you can become qualified over the course of the assignment. (Only VA does not require qualified in advance.)

No snark at all but a 1hr McKissock is not going to get you there. The AI class addresses commercial, industrial and residential applications. It is pretty rigorous and comprehensive.

This is entirely on the client for not placing the assignment with an appraiser already qualified to value the solar. They ought to pay you a trip fee. Further, borrowers are usually insistent on the lender finding such an appraiser. They may not be happy with the result and can be vocal about it. It is grief you don't need before you take a proper class.

eta You do not have to be affiliated with AI to take the class. You just don't get a discount.

 

[bnmappraisal]

If they are financed for 20 years, with payments transferring to a new owner, I would not call that "owned" in the same way that fully paid off systems are. When did the 20 years start, how long ago?

I agree with TJ and even Lee's comment in post #3

I'm here in FL as well (St Pete) and have run into a few of these. Thankfully most have been still under lease, so it was easy to call them "personally property" - which sounds like your situation may be

The one I did have that was owned outright (they paid cash for it), I interviewed a handful of agents (I forget off hand, but I believe somewhere between 6-10 agents that I knew covered that neighborhood a lot) and used that information toward my reconciliation. I did not have enough market data to develop a quantitative adjustment, but again, had enough "market data" (from agents) to qualitatively lean toward the upper end of my range in the final reconciliation of OMV (agents all said it was a positive marketing factor)

 

[DWiley]

Mike, do yourself a favor and turn it back in to the client. If they want to meet secondary mkt requirements they need an appraiser who is already qualified. This is a higher requirement than USPAP which says that you can become qualified over the course of the assignment. (Only VA does not require qualified in advance.)

No snark at all but a 1hr McKissock is not going to get you there. The AI class addresses commercial, industrial and residential applications. It is pretty rigorous and comprehensive.

This is entirely on the client for not placing the assignment with an appraiser already qualified to value the solar. They ought to pay you a trip fee. Further, borrowers are usually insistent on the lender finding such an appraiser. They may not be happy with the result and can be vocal about it. It is grief you don't need before you take a proper class.

eta You do not have to be affiliated with AI to take the class. You just don't get a discount.

Exactly. Withdraw until you get the education / training to complete the assignment without violating the Ethics Rule and the Competency Rule.

 

[Deleted member 152047]

A 9kw system is not going to offset $500/month in electricity costs, especially if they are selling it back to the electric company. If that is what they are telling you, then I would request a bill (before and after) from the borrower or electric provider.

That said, typically you aren't going to get more than 15-20 years out of solar arrays. The easiest way to value them would be to take the electricity savings per month and plug it into a financial calculator. You would discount it back to a PV. The income approach is going to be the best way to look at this. I don't think there is enough market data to indicate market appeal over and above what the PV of the monthly savings would be.

You might consider the discount rate to be whatever the borrowing rate is for the system.

 

[Tim The Enchanter]

Nobody wants to give me docs with all the cost numbers etc.
Not that I ask or want them.

Last one I did had a whole lotta solar panels on roof. It was a purchase for $2.x Mil.
The comps I had I came in >10% above contract. No way you could lowball it to the contract price.
Solar panels and the associated wiring etc, a feature / selling point.
I "gave" it no value.

 

[Meandering]

Also consider contacting the electric utility for their written policy concerning what they pay for the electricity produced by homeowner solar panels, and how long they expect their current policy to remain in place unchanged, and/if/ any changes to the policy are expected and when they might occur, and how those changes might impact the current generation reimbursement rate.

Also, check with the homeowner that the panels are covered for replacement by an insurance policy. There is a storm brewing in the Gulf at the moment, and being in a storm prone area, those panels might not still be on the roof in a week or two, so, it might be wise to address insurance and replacement as we enter the storm season, during the "wettest year on record". Or wait to get stipped for it next month.

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[Deleted member 152047]

Also, check with the homeowner that the panels are covered for replacement by an insurance policy. There is a storm brewing in the Gulf at the moment, and being in a storm prone area, those panels might not still be on the roof in a week or two, so, it might be wise to address insurance and replacement as we enter the storm season, during the "wettest year on record". Or wait to get stipped for it next month.

This is outside of the typical SOW. I wouldn't even go to this level of detail on the commercial side. This is part of our limiting conditions and assumptions. A tropical storm in the gulf isn't going to do anything to PV panels in Florida. Everything has to be able to withstand a certain amount of wind depending on the wind zone that the property is located within.

 

[Meandering]

Oh, that might be because you don't do much residential work, where the common stip for a zoning district other than residential, or with an undersized lot is:

Could the building be replaced if destroyed?

That question exists for the same reason, it is important to consider the coverage of the solar panels for replacement insurance.

If they blow off the roof, and nobody replaces them, that "income" that boosted "the value" is no longer there.

Same reasons, different considerations.

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[jay trotta]

Oh, that might be because you don't do much residential work, where the common stip for a zoning district other than residential, or with an undersized lot is:

Could the building be replaced if destroyed?

That question exists for the same reason, it is important to consider the coverage of the solar panels for replacement insurance.

If they blow off the roof, and nobody replaces them, that "income" that boosted "the value" is no longer there.

Same reasons, different considerations.

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My Bold; 1st is in regards to Zoning - Subject To PZC regulation
2nd is in regards to Insurance - Requires Insured value estimate Replacement Cost, IMO not Market and Lender would obtain via Insurance Co. under the "perils of coverage".
3rd; Agreed, but the HO is generally "Replacement Cost Coverage", the loss of time relates to the Coverage Policy Terms & Conditions, which I have yet to see in all my time appraising; IE: never have I been provided an HO Policy on any property as part of an assignment Condition.
Just a thought or two

PS: How would an AVM do on such an assignment ??