Florida...My subject has a new whole home solar PV system which was not known until the inspection. Client/Lender did not request a Green certified appraiser. Information on determining value is scant, unless you are a AI member and take their courses and earn their Green designation.
2860 sq. ft home
9.8 kW rated system (35 x 250w panels)
pvwatts.nrel.gov calculator estimates system output 14,700 kWh/year.
System is currently offsetting a $500/month energy bill, panels are owned (financed over 20 years).
Now what?? Thanks in advance...
I have taken green classes and I am highly skeptical on some of their methods used to extract adjustments, may treat it like a income stream which may work on a 50 unit apartment building bit not on a typical SFR. SO DCF and online calculators can be very misleading. Unfortunately some green certified appraisers, are selling snake oil to unsuspecting victims like solar sales some greens have an-agenda. I had one green tell me a system on a house based on his DCF model had a value of $50,000. My friend a Realtor said he couldn't find even one potential buyer that would pay more than $15K to $20K and some wanted it for free. Ultimately it's the market and buyer action that determines the value. Where I differ with the greens is the value should be extracted from the current market not based on hypothetical assumptions.
So whats that bad-boy worth ?
Based both on size and market value and a percentage based system of what the homes value is. In my area most buyers will not pay over 3% to 4% of the properties value, no matter what the system produces or saves. Ones with solar loans often have 7% to 8% amortized over 10 years and after payments there is no net savings even with free electricity . The ones with 20 year loans are normally leases or have long term power purchase agreements and they have no value to a new buyer. Finally most lenders as of last year will no longer recognize " a Solar Loan Subordination " So on a sale or refinance that bad boy has to be paid off in full. This has had a really negative effect on solar sales in my area because Realtors no longer like dealing with this issue.
1- Each market area is different and in order to really analyze these you really need a copy of the contract , financing and any power agreements with his provider. Many owners were sold bills of good and the ones I have seen with 20 year loans , ended up being leases with options to purchase. ( they are worth -0- )
2- Unfortunately YOU do not have time to establish a percentage based system, and those free online solar calculators will generate some impressive numbers but you client is not going to sign off on a $50,000 adjustment, and even if you were a highly trained Certified-Green-Appraiser, using your Flux-Compactor Powered discounted cash flow analyzers it would probably not make any sense.
3- The Nuclear Option When You Can't- Extract A Supportable Adjustment :
The subject property features a 2, 860 Sq. Ft home 9.8 kw rated system with ( 35 x 250 w panels ) The appraiser attempted to estimate a solar adjustment based on information taken directly from the market, but due to insufficient market data the appraiser was unable to determine what the solar energy-savings cost "V" what it contributes to the value of the property is. Therefore the solar amenity was taken into consideration but no separate line item adjustments were made.
( Note: If their befuddled and confused reviewer wants a specific number tell him that you have no idea, and that you don't like to make make up numbers.
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