Home Valuation

[wildbill-hiccup]

We're in HI with the most costly electrical rates in the country.
We bought because making payments was cheaper than paying rent.
We have absolutely no interest in whatever value is left over after we die.

When we bought 8 years ago, even with very conservative usage, we were paying $185/mo for electrical usage, not a high amount when compared to what others were paying at the time.

Using only ballpark figures:

We had a 5kw PV system added to our home about 6 years ago with solar hot water added a few years later.
Our minimum electrical charge was dropped to a $20 minimum fee, then was raised to $25.
We're on the windward side of the island with high rainfall.
So, clear skies are a variable.
We get some grid usage and have occasional electrical bills of $40 to $60/mo, especially whenever I try turning the hot tub on.

The PV Installation cost was about $19k before state and federal incentives, with another $5k for the addition of the water heating system with no incentives because we're retired with no earned income.
From memory, after deducting the incentives we repaid ourselves about $12k.
It paid for itself in about 4 years.
Off the top of my head, our solar system is saving us at least $150/mo in electrical bills, probably closer to $170/mo/.
I'm giving consideration to adding enough to supply an electrical vehicle or two.

My concern is about the way home valuation with a PV/hot water system is made.
While it is probably aimed at mainland homes, the valuation increase looks to be about only the cost of installation.
The electric cost reduction does not seem to be addressed.
What's at work in valuing a home with a solar system?

[J.P.M.]

What's at work in valuing a home with a solar system?

A thing is worth only what someone is willing to pay for it. Period. That perceived worth however, is different for different potential buyers and that perception of worth can be manipulated. It's called marketing.

Besides, if you "...have absolutely no interest in whatever value is left over after we die.", and assuming you plan on staying in the home, why the concern "... about the way home valuation with a PV/hot water system is made" ?

[SunEagle]

A thing is worth only what someone is willing to pay for it. Period. That perceived worth however, is different for different potential buyers and that perception of worth can be manipulated. It's called marketing.

Besides, if you "...have absolutely no interest in whatever value is left over after we die.", and assuming you plan on staying in the home, why the concern "... about the way home valuation with a PV/hot water system is made" ?

I have had at least 3 different companies tell me my home will be worth so much more if I install solar. I told them I plan on living here until I die and it will be up to my kids to enjoy what the home will be worth when that happens so why should I care how much solar increases (or decreases) it's value.

[J.P.M.]

I have had at least 3 different companies tell me my home will be worth so much more if I install solar. I told them I plan on living here until I die and it will be up to my kids to enjoy what the home will be worth when that happens so why should I care how much solar increases (or decreases) it's value.

This topic comes up 2 or 3 times/yr. on this forum.

My bottom line is my first sentence above to Wild Bill.

Further to that, I'd suggest that adding what some consider an eyesore to one's property would not necessarily add to the pool of potential buyers. Not everyone is a solar advocate and that reduces the pool of potential buyers. The way I learned it, fewer buyers == lower prices.

Also (and although few folks know, much less understand this), a PV system needs to be sized to the OCCUPANTS use patterns to be optimally cost effective - not necessarily to the size of the dwelling. Anything else will reduce a system's cost effectiveness (although most potential buyers are clueless about that and so such ideas will tend to not affect marketability or price because of such ignorance).

So, for example, a potential buyer sees a zero electrical usage or surplus generation history and thinks (s)he can kiss their electric bill good by. Then they buy and find themselves staring at high bills. Reason: the new owner's use is much higher than the seller's was.

FWIW, that'll happen to whoever buys my house in n.county San Diego. I burn through about 7,000 kWh/yr. The typical annual usage in my HOA is above 2X that amount. for smaller homes and more than that for families with children.

Also, with NEM irrevocably (if incrementally - see other current threads) and eventually being gutted, a lot of current PV systems might well wind up being white (or actually black) elephants on roofs not unlike the now useless and long since derelict DHW systems that still dot the area. That might very well actually reduce the future desireability and so the marketability, and so the price potential of such property to the extent residential PV has any effect on a home's price that's reliably quantifiable.

Or, all that might work the other way with some potential buyers seeing a home with PV as their dream and so overpay. After being around alternate energy for close to 50 years - and that meant rubbing elbows and interacting with a lot of solar advocates - more than a few of whom are trehugging nitwits - I can see that as a real possibility.

[AmitBajpayee]

Solar technology is evolving year by year. Hence every year there will be a new invention in the solar panel category.
After you install the solar power system for home your property value will be increased in the market.

In the future, if you planning to sell out your home then your home valuation will be more, or if you are planning to rent it out you can expect more amount.

The overall installing solar panel is a long-term investment.

[SunEagle]

Solar technology is evolving year by year. Hence every year there will be a new invention in the solar panel category.
After you install the solar power system for home your property value will be increased in the market.

In the future, if you planning to sell out your home then your home valuation will be more, or if you are planning to rent it out you can expect more amount.

The overall installing solar panel is a long-term investment.

Please understand that having a solar pv system on the home may not increase it's value or may even drive people away if they are looking to purchase. It all comes down to what someone thinks is value or headache.

[solarix]

The national home assessors association says the increased valuation of a home is equal to the net present value of 20 years of utility savings due to the solar system. I'm not sure if many local assessors go by this as they are more in tune to what local buyers appreciate....

[J.P.M.]

The national home assessors association says the increased valuation of a home is equal to the net present value of 20 years of utility savings due to the solar system. I'm not sure if many local assessors go by this as they are more in tune to what local buyers appreciate....

I've been reading that old stuff for 10+ years or more but like other such rules of thumb and go bys, there's not much to back it up except bluster from those with skin in the game like real estste slugs and solar peddlers. What I have also seen is mostly local/regional stuff full of anecdotal information from mostly non solar informed people who either need something to publish to meet a deadline or with a point to prove regardless of facts.

PV may/may not change the perceived value of a piece of property. It all depends on the opinion of a potential buyer.

A thing is worth no more than someone is willing to pay for it.

Knowing what I think I might know, and from about 150 residential installs I've watched go in, I wouldn't buy a piece of property with an installed PV system on it.

My current system is good because I designed it, chose a good installer and sat on the roof watching the install. Most other stuff/work I've seen done by maybe 20 installers over the last 12 years or so makes me skeptical of the system quality I'd get in a PV system already on a home I might otherwise be interested in.

[bcroe]

. Please understand that having a solar pv system on the home may not increase it's value or may even drive people away if they are looking to purchase. It all comes down to what someone thinks is value or headache.

Then there is the question, what is the resale value of a ground mount PV solar
compared to a roof mount? My panels cannot be seen from the house, no solar
equipment in the house, does that matter? Bruce Roe

[J.P.M.]

Then there is the question, what is the resale value of a ground mount PV solar
compared to a roof mount? My panels cannot be seen from the house, no solar
equipment in the house, does that matter? Bruce Roe

Some thoughts on that:

A family with kids might find the loss of yard space a drawback.
I'd wonder if ground mount systems might be viewed by some as more of an eyesore than what's become the more common and so less unusual roof mount by some.
They may also fear for the safety of the fruit of their loins from electrical shock, real or perceived.

On the somewhat positive side, a ground mount system is also easier to remove with no concern or cost for roof remediation required.

[solarix]

The real estate attitude in my (sunny) area has gone from - "don't install solar as it will limit your pool of home buyers" to - "Why don't you have solar on this home you are selling"
I'm sorry that I can not give you actual comparables on houses with and without solar...

[SunEagle]

Then there is the question, what is the resale value of a ground mount PV solar
compared to a roof mount? My panels cannot be seen from the house, no solar
equipment in the house, does that matter? Bruce Roe

Most people that own a home do not have the room to install a ground mount. While I have 2.5 acres and would like to install one I still can't justify the cost when it may take more then 12 years to break even. My roof is facing East and West so that is not the best orientation for a roof mount and since I never plan on moving I really don't care if a pv system increase my home value or not.

[SunEagle]

The real estate attitude in my (sunny) area has gone from - "don't install solar as it will limit your pool of home buyers" to - "Why don't you have solar on this home you are selling"
I'm sorry that I can not give you actual comparables on houses with and without solar...

While I am starting to see more solar installed in my area I have not heard from any real estate seller that a home is more valuable with or without a system. I guess solar hasn't really caught on yet in my area of rural Florida.

[Ampster]

The real estate attitude in my (sunny) area has gone from - "don't install solar as it will limit your pool of home buyers" to - "Why don't you have solar on this home you are selling"

I have sold two homes in the past year in California, both of which had solar and a circuit for an EV charging station. One of those was was in a small beach town with a higher than average registration of EVs. One was an all electric home in which I had also installed a heat pump water heater. It would be hard to quantify the exact amount that the solar panels contributed to the sales price but both homes sold quickly and I did think the solar panels did differentiate those homes from similar comparable homes in the market. My experience is purely anecdotal and may have no value to some buyers. In both of those situations I was trying to enhance the curb appeal to buyers that valued the improvements that I made to those homes.

It all depends on where you are standing.

[bcroe]

Some thoughts on that:

A family with kids might find the loss of yard space a drawback.
I'd wonder if ground mount systems might be viewed by some as more of an eyesore than what's become the more common and so less unusual roof mount by some.
They may also fear for the safety of the fruit of their loins from electrical shock, real or perceived.

On the somewhat positive side, a ground mount system is also easier to remove with no concern or cost for roof remediation required.

Yes those could apply. Here the array cannot be seen by either me or my
neighbors, from a house or a road. Currently it is fenced on 2 sides, not
very accessible on the others. More fence is possible. Bruce Roe