Buying House With Solar Installed

[Hansel07]

Thank you for the cost explanations, I really appreciate it.

[J.P.M.]

This has been answered. 6 KW *$3 a watt = $18,000. The cost per watt is typical and can vary plus or minus $0.50 (could be as much as $1) dependent on local labor conditions and deals on equipment. As discussed an installer who leases systems may front load costs to drive the on paper cost up to maximize the federal credit so the installed cost will increase. An example is the installer specs a particular module that they buy from an another division of the company. The other division marks up the panel some amount. The installer buys the marked up panel and includes that marked up cost on the install. The leasing firm now gets a higher rebate from the government. The other division makes extra profit that then goes into the corporate profit. In theory the government is the only one who loses until someone who leased the system wants to get out of the lease. The leasing company has the project on the books at a high cost and that means the buyout is going to be higher than a system that was installed without the financial games.

Systems with microinverters may have higher equipment costs but could be quicker to install with cheap labor while string inverters could have lower equipment cost but take a bit more work to design and install. Special conditions like tile roofs, ground or pole mounts or undersized electrical panels will also raise the cost per watt.

More of the dark side of the joys of screwing the solar ignorant via leasing.

[azdave]

Purely for arguments sake, but ballpark before credits and rebates using middle of the road components, what would a 6 KW system with 28 panels cost?

My 26 panel string inverter system was $18K before incentives and $11K after. Installed by Harmon Solar on a tile roof in Gilbert over three years ago and they did all permits including HOA approval. It was turn-key. I just had to take off work on the install dates.

[J.P.M.]

If they had, they would never have agreed to lease PV. I wouldn't offer less for the house but I also wouldn't offer a dime more..

As a negotiating position, I'd offer less with a lot of reasons why, and then negotiate up to nothing more.

[desant89]

I guess I am not following here. If the homeowner gets the lien removed, and the new homeowner would own the system outright, why would that not add any value at all to the home? To me, at that point, it is no different than someone who purchased their system, and is selling their home. I get that it is a really small system though, and I know it would be better to get your own, but if it works, and it saves money, it has some value to it.

[J.P.M.]

I guess I am not following here. If the homeowner gets the lien removed, and the new homeowner would own the system outright, why would that not add any value at all to the home? To me, at that point, it is no different than someone who purchased their system, and is selling their home.

1.) A property is only worth what someone is willing to pay.
2.) A property's value is somewhat dependent on the neighborhood. You may think your home is worth $30K more because of the spiffy array on the roof, but it (the house) will probably sell for about other houses in the neighborhood +/- some.
3.) Believe it or not, some people actually do not like solar. Talk to ~ 1/3 of my neighbors.
4.) The negotiation is not necessarily about what value a PV system may add to a property. Reality is, if you're the buyer, or buyer's agent, it's about getting the best price for a home. The buyer may think a feature (like PV) is great and is salivating over it. However, if the buyer possesses one eye and one balloon knot, (s)he will never reveal that, and if the seller, like most sellers with PV, thinks that PV adds value, one goal of the buyer in the negotiation is to disabuse the seller of such notions, be they correct, incorrect or somewhere in between. This is a process about getting the best price, keeping in mind that all value, like most everything, is relative and a matter of perception. Perceptions can be manipulated. It's just business..

Perhaps that's the part you're not following.

The actual value any feature adds (or detracts) to or from the value of a property is a matter of some opinion, depending on whether you are a buyer or a seller and opinions vary - for varying reasons.

Example: I'm about the biggest fan of solar I know of, but for a lot of what I believe are very valid, and I hope informed reasons, I'd never buy a residential property with a PV system attached. Therefore, an existing PV system on a home is a negative feature to me.

[desant89]

I'm all about the best deal, and I do it all the time no matter what I buy. I myself would never act like it is something I want as a buyer. However, on the seller side, I would be just as persuasive as to pointing out the saving on utility they would be getting. If you are covering 95+% of you electric bill, and can prove it, nobody can say it has no value. On the flip side for me, if there was one solar panel in the front of the house where it can be seen, I would not purchase the home. I am about to get solar now, of course I am purchasing. I fully expect that if I were to sell my home in 5 years (no plan to do so, but never know what happens in life), and my system is owned outright, covering 95% of my utility, that my home would have a higher value that a similar home without solar. But I guess a buyer would need to agree, and I would need to be persuasive.

[J.P.M.]

I'm all about the best deal, and I do it all the time no matter what I buy. I myself would never act like it is something I want as a buyer. However, on the seller side, I would be just as persuasive as to pointing out the saving on utility they would be getting. If you are covering 95+% of you electric bill, and can prove it, nobody can say it has no value. On the flip side for me, if there was one solar panel in the front of the house where it can be seen, I would not purchase the home. I am about to get solar now, of course I am purchasing. I fully expect that if I were to sell my home in 5 years (no plan to do so, but never know what happens in life), and my system is owned outright, covering 95% of my utility, that my home would have a higher value that a similar home without solar. But I guess a buyer would need to agree, and I would need to be persuasive.

One point of many: It may cover 95 % of your bill, but maybe somewhere between 30 and 300% of a potential buyer's bill once they get in the house. On the 30 % end, the new buyer will have an undersized system that may well be difficult will be difficult to upsize. On the 300 % end, the buyer (if knowledgeable) probably doesn't want to pay extra for a system that is way oversized and overkill for his/her needs.

Example: there is a couple in my HOA who own a house from the sane builder as mine that is very similar to mine - same area/layout/materials. Two people, 1 dog. Both people work all day, weekdays, nice folks. Annual usage (from PV estimate requirements): ~ 20,000 kWh annually. Me: 2 people, no pets. everyone retired. Annual use : ~ 6,600 kWh. Energy use is highly dependent on personal choices and lifestyle.

Suppose some buyers think solar is ugly and wouldn't put it on their house if you PAID them the equivalent of 95% of your annual bill in addition to any offset ? What would such a buyer have for solar's value on a potential property purchase ? Some folks do not think like you. Maybe more folks than you think. Not everyone is a s pro solar as most of the readers and members of this forum. To the extent that such naysayers exist, they also lower size of the available pool of potential buyers and thus have a further potential negative impact on PV equipped property.

Lots to consider when you think like the other guy.

[Hansel07]

As a buyer, I have no specific feelings about solar as I look at purely in a financial sense. If the seller can prove he is saving say $100/month on his bill and he thinks the system is worth an extra $10,000 to the house, in effect I would be prepaying 8 years of my energy cost. If I think I may only be in the house 7 years (depending on the report, the national average) I will never break even.

I do agree with usage and how this can affect the numbers.

[desant89]

I agree also. I guess my usage is a lot different. I am getting a 12.4k system, but have 5 people, a pool, hot tub etc. Given that, I expect to save 250+ a month on my bill. Then of course we get into SRECS. I hear you may, or may not transfer the SRECS when you move (another consideration for a buyer if they will get the SRECS). That's a whole other discussion. So what I am saying is that in my situation, if I see a home has solar, and is generating 15k a year, it would be a hugs savings for me knowing that I use that much. Being used, I would think the system should be worth 15k to a buyer in five years (37k new). But, I do agree with J.P.M, I think a home having solar will hinder the sale as everyone would buy a home without Solar, and not all would buy one with it.

[J.P.M.]

As a buyer, I have no specific feelings about solar as I look at purely in a financial sense. If the seller can prove he is saving say $100/month on his bill and he thinks the system is worth an extra $10,000 to the house, in effect I would be prepaying 8 years of my energy cost. If I think I may only be in the house 7 years (depending on the report, the national average) I will never break even.

I do agree with usage and how this can affect the numbers.

It's all about perceptions. And for the peddlers of the world, creating and changing the sheeple's perceptions and priorities. Who ever thought a black monolithic slab on a roof could be turned into a thing of beauty ? Non or poorly educated sheeple make the best customers. Folks who are not mentally slothful with common sense and good education are the bane of con men.

[Wy_White_Wolf]

Also consider a new system will have a warrantee and installer to repair any problems that may come up. To me that would reduce the value of a used to system to no more than 1/2 of the cost of a new system. Also depreciation. Their lease is for 20 years so I'd use that. Deduct 5% for every year it has been in use.

WWW

[desant89]

Also consider a new system will have a warrantee and installer to repair any problems that may come up. To me that would reduce the value of a used to system to no more than 1/2 of the cost of a new system. Also depreciation. Their lease is for 20 years so I'd use that. Deduct 5% for every year it has been in use.

WWW

Are the labor warranties not transferable? I am sure the manufacturers parts warranties all remain in effect either way. With no warranty, I totally agree with the a max of 50% value.

[Wy_White_Wolf]

Are the labor warranties not transferable? I am sure the manufacturers parts warranties all remain in effect either way. With no warranty, I totally agree with the a max of 50% value.

I believe it takes the original owner or installer to do the transfer. I don't see Sungevity doing that.

[Ian S]

The system was installed the end of 2012. Per the permit, it is a 3.2 KW system with 28 65"x39" panels. The specific inverter and brands I am unsure of, but would tend to think Sungevity was not using top of the line items. I have spoken with the utility company and they say it looks as if the system is trying to cover the amount of energy needed during the peak hours. The house is still averaging an energy bill of $165/month. The utility company said they thought it was a 6.0 KW system. Per the contract with Sungevity the system was estimated to produce 8,196 kWh/year for the first year and 7,462 kWh/year over the term of the lease. Running this numbers this is assuming a 1% decline per year in efficiency.

We are located in the Phoenix metro area. I know there are many variables, but a range is more than fine. What would I be looking at total cost if I was going to put of a 3.2 KW system? What about 6.0 KW?

Something is strange about the numbers. If there really are 28 panels, then a 3.2 kW system would mean that each panel is only rated at 114 watts. More likely a panel of that vintage would be around 210-220 watts so that would make it closer to a 6kW system. But here in Phoenix, unless you have serious shading issues, a 6kW system should generate considerably more than 8,000 kWh/year. My 6.9 kW system installed in 2012 generates over 12,000 kWh. So, you really need to nail down the details of what this system is comprised.

Also to keep in mind is that a new solar system in Arizona is not likely to be cost-effective due to the new rules already in place for SRP and all but a done deal for APS. So an existing presumably grandfathered system may have a clear advantage in that case but only if you actually want solar. If it were me, I'd nail down the details of the system components and wattage. I'd then insist that the seller buy out the lease; what kind of help you'd offer, if any, would be up to you. FWIW, it sounds like the home has not been priced for a quick sale.

Back in 2011, I got a quote from Sungevity for a system using BP Solar panels and a Kaco Blueplanet inverter.

Good luck!