In our area, the real estate attitude is changing from "you are limiting your pool of prospective buyers to those that like solar" to now "why don't you have solar on this home...." I have an article fom a home appraisers manual that says the value of a solar system is equal to 20 years of expected savings. However a lot of appraiser don't go by that. I have had mortgage lenders however qualify buyers for larger loans because their monthly expenses are lower with solar.
Most Popular Topics
Collapse
Equity Increase in home after solar install
Collapse
X
-
-
In our area, the real estate attitude is changing from "you are limiting your pool of prospective buyers to those that like solar" to now "why don't you have solar on this home...." I have an article fom a home appraisers manual that says the value of a solar system is equal to 20 years of expected savings. However a lot of appraiser don't go by that. I have had mortgage lenders however qualify buyers for larger loans because their monthly expenses are lower with solar.
That "20 yrs. of expected savings" dart throw has been around for a very long time. It ain't new. I've got nothing more than my own conjecture and cynical outlook on this one, but my guess as to origins of that 20 year business might be that it's origins may be a common sense and maybe initial guess by real estate slugs and appraisers who needed a guidepost, with the real estate slugs wanting a higher number (follow the money).
Even if using a number of years of expected savings method is a reasonable approach - and I'm not at all suggesting for one hot second that it is - if people are (or were) moving, on average every 7 years or so, seems like that 7 years might be closer to a more realistic number of years of expected savings to use.
Whether or not those savings are in terms of current, or future or, net present value $$ is also important, but I'm pretty sure not even known about, much less considered.
And, why 20 years ? Well, maybe 10 years ago, 20 years might have seemed like a fairly conservative PV lifespan.
Or, just maybe, 20 years of expected savings is a larger number than, say 7 years of expected savings. That 20 years, and the incomplete logic about PV service life (similar to the idea my home is probably good for another 50 years of occupancy, but I'm not sure what that does to its resale value) sure would make it easier for home owners, PV vendors and real estate slugs to raise the floor for value added and make a few more bucks out of the general solar ignorance.
In the end, a property's only worth what some one is willing to pay (or in the case of the value added to - or deducted from - a property by a PV system, what someone's solar ignorance can allow them to be B.S'd into). Caveat Emptor.Last edited by J.P.M.; 06-24-2017, 11:45 AM.Comment
-
This is all a great theoretical discussion -- but that's all it really can be. While an appraisal may show a line item assigning value (plus or minus) to a solar system, who's to say what value a buyer attaches to a solar system. Even when a house is sold (vs an appraisal made w/o a sale, i.e. on a refinance), one will never know what effect the solar system had on the sale price.
Having said that, I cannot believe that my ground mount system will not be a plus when I go to sell my house in the next three to nine months. With SDGE rates, who wouldn't want a house with a zero to minimal electric bill, easily saving $3000 to $4000 of utility bills annually. But a plus to the sale or not, I will never know what $ amount of the sale price to attribute to the solar system.8.6 kWp roof (SE 7600 and 28 panels)Comment
-
This is all a great theoretical discussion -- but that's all it really can be. While an appraisal may show a line item assigning value (plus or minus) to a solar system, who's to say what value a buyer attaches to a solar system. Even when a house is sold (vs an appraisal made w/o a sale, i.e. on a refinance), one will never know what effect the solar system had on the sale price.
Having said that, I cannot believe that my ground mount system will not be a plus when I go to sell my house in the next three to nine months. With SDGE rates, who wouldn't want a house with a zero to minimal electric bill, easily saving $3000 to $4000 of utility bills annually. But a plus to the sale or not, I will never know what $ amount of the sale price to attribute to the solar system.
I like solar, but I know people who honestly and without rancor think solar sucks, particularly a ground mount. If that has some general validity, if nothing else, it would seem at least somewhat likely an array on a property will decrease the number of potential buyers, or at least their enthusiasm, which will not tend to enhance the price. As much as I believe in R.E., particularly solar, I wouldn't buy a home with an existing array, one reason of many being that an existing array will be improperly sized for my needs, which means I'll either be paying more for an array that's too big and so whose capabilities I can't fully use. Or, too small, which I know is better, but seems contrary to common thinking and sensibilities, and so for many buyers, a bigger array will be wanted/needed which may knock what's already on a property on it out of the current NEM arrangement, as well as create the PITA's to increase the size. Neither option is what sounds like a desirable selling point to me.
Then there's reality. If I was a shrewd buyer, even if I thought the array suited me to a tee, and I got sticky knickers just thinking about owning it, I'd be badmouthing it like crazy as a negotiating tool to leverage a lower price. Don't know how many potential buyers know enough about the very shaky ground that supports the value added guesses about PV systems, but the secret of using the uncertainty won't stay secret once someone figures out how to use it. Maybe a few already have. It ain't rocket science. Divergent opinions on the worth of something lower its value for many reasons. Right or wrong, it'll happen that way until some data that will actually stand up to analysis turns up in the form of local numbers and actual selling price data for truly comparable properties, and not something for example, on an unrepresentatively and small sample, 500 miles away done 2 yrs. ago.
I hope you make a killing when you sell.Last edited by J.P.M.; 06-24-2017, 08:21 PM.Comment
Comment