Question about solar tax credit

[veritass]

Solar panels can increase the basis of your primary residence but the basis of you house only comes into play if you sell your home for more than a $250,000 gain.

[Willaby]

John spend $20,000 on a new solar system for his 100% business use rental home. On that years' tax return John will get a tax credit of $6000 (30%).

Nahhh, can't take the 30% on a residential rental you don't live in. Looked into this a few months ago. I guess the ITC and depreciation combined would be too good to be true. Google "25D solar rental" for the IRS pub and also from Intuit.

[SunEagle]

Solar panels can increase the basis of your primary residence but the basis of you house only comes into play if you sell your home for more than a $250,000 gain.

Unfortunately adding solar may or may not increase a homes value. The type of real estate people desire and want to purchase varies like the weather. So to make a blanket statement like that is very unwise and misleading.

[tru2logan]

Nahhh, can't take the 30% on a residential rental you don't live in. Looked into this a few months ago. I guess the ITC and depreciation combined would be too good to be true. Google "25D solar rental" for the IRS pub and also from Intuit.

I stand corrected. Thank you for pointing out that residential rentals do not qualify. Most other types of "business" use property seems to, just not rentals. Looks like pass through entities like s-corps can easily take both the credit and depreciation, but even then not on rental properties.

[veritass]

Unfortunately adding solar may or may not increase a homes value. The type of real estate people desire and want to purchase varies like the weather. So to make a blanket statement like that is very unwise and misleading.

Research and common sense says your wrong. It's pretty easy to justify spending more for a house if you don't have to pay as much for electricity.



" New research sponsored by the Department of Energy shows that buyers are willing to pay more for homes with rooftop solar panels — a finding that may strengthen the case for factoring the value of sustainable features into home appraisals.
The study, conducted by the Lawrence Berkeley National Laboratory in California, examined sales data for almost 23,000 homes in eight states from 2002 to 2013. About 4,000 of the homes had solar photovoltaic systems, all of them owned (as opposed to being financed through a lease with the solar company).
Researchers found that buyers were willing to pay a premium of $15,000 for a home with the average-size solar photovoltaic system (3.6 kilowatts, or 3,600 watts), compared with a similar home without one. Put another way, that translates to about four additional dollars per watt of solar power"

[SunEagle]

Research and common sense says your wrong. It's pretty easy to justify spending more for a house if you don't have to pay as much for electricity.



" New research sponsored by the Department of Energy shows that buyers are willing to pay more for homes with rooftop solar panels — a finding that may strengthen the case for factoring the value of sustainable features into home appraisals.
The study, conducted by the Lawrence Berkeley National Laboratory in California, examined sales data for almost 23,000 homes in eight states from 2002 to 2013. About 4,000 of the homes had solar photovoltaic systems, all of them owned (as opposed to being financed through a lease with the solar company).
Researchers found that buyers were willing to pay a premium of $15,000 for a home with the average-size solar photovoltaic system (3.6 kilowatts, or 3,600 watts), compared with a similar home without one. Put another way, that translates to about four additional dollars per watt of solar power"

You are so brain washed by what you think is the solution to everything. Sure solar may be important to some people that live in CA but what about the rest of the country.

I know half a dozen real estate people here in Florida and none state that a solar pv system increases the value of a home. Cheap electric bills are so low on peoples critical list that saving a few hundred a month is nothing compared to what they spend on food, insurance and medical. For that matter our electric costs are set to go down this year and most of us only pay about $0.12/kWh.

But go ahead and believe what you read and think. Just don't drink the cool aid.

[Yaryman]

Research and common sense says your wrong. It's pretty easy to justify spending more for a house if you don't have to pay as much for electricity.



" New research sponsored by the Department of Energy shows that buyers are willing to pay more for homes with rooftop solar panels — a finding that may strengthen the case for factoring the value of sustainable features into home appraisals.
The study, conducted by the Lawrence Berkeley National Laboratory in California, examined sales data for almost 23,000 homes in eight states from 2002 to 2013. About 4,000 of the homes had solar photovoltaic systems, all of them owned (as opposed to being financed through a lease with the solar company).
Researchers found that buyers were willing to pay a premium of $15,000 for a home with the average-size solar photovoltaic system (3.6 kilowatts, or 3,600 watts), compared with a similar home without one. Put another way, that translates to about four additional dollars per watt of solar power"

While logic and reason say people will pay extra for solar, it is NO WHERE NEAR what that study claimed.
My neighbor across the street put in a 7,500 watt system. One year after installing the system he had to move. The house in no way shape or form sold above the market rate, and in fact spent 6 months on the market at what I thought was a fair price without the solar. My new neighbors essentially have free electricity and are saving somewhere in the range of $2500 to $3000 a year because of the panels. ( I'm in the SF Bay Area ) With more PG&E price increase in the pipeline, their savings will only increase.

It's just my estimation, but if you put a $15,000 system on the roof today and had to sell tomorrow you might get $5,000 extra for the home.

[veritass]

You are so brain washed by what you think is the solution to everything. Sure solar may be important to some people that live in CA but what about the rest of the country.

I know half a dozen real estate people here in Florida and none state that a solar pv system increases the value of a home. Cheap electric bills are so low on peoples critical list that saving a few hundred a month is nothing compared to what they spend on food, insurance and medical. For that matter our electric costs are set to go down this year and most of us only pay about $0.12/kWh.

But go ahead and believe what you read and think. Just don't drink the cool aid.

I offer facts, you offer unsupported assertions. You offer anecdotal evidence and I show you a paper that has 23,000 homes with a proper statistical analysis. You completely disregarded the paper for because it didn't support your view. You are the one who is biased. I just keep hearing the same bs asserting over and over on here backed up by little facts. There must be some fossil fuel behind all this or just some very dim republicans regurgitating the party line.

[tru2logan]

I offer facts, you offer unsupported assertions. You offer anecdotal evidence and I show you a paper that has 23,000 homes with a proper statistical analysis. You completely disregarded the paper for because it didn't support your view. You are the one who is biased. I just keep hearing the same bs asserting over and over on here backed up by little facts. There must be some fossil fuel behind all this or just some very dim republicans regurgitating the party line.

While I tend to side slightly with your view that solar has the potential to add monetary value to your home, I do not think the GOP has put out any press releases trying argue the point either. Please keep in mind that the corporations are not the only ones looking out for the wellbeing of traditional power... Look no further than millions of dollars that flow through the union coffers as well. The average joe Union worker has a vested interest in you keeper solar off your roof just as much as the "dim republicans" that you speak of.

[Yaryman]

The study quoted is dated 1/19/15. Somehow they came up with this conclusion.

"We find that home buyers are consistently willing to pay PV home premiums across various states, housing and PV markets, and home types; average premiums across the full sample equate to approximately $4/W or $15,000 for an average-sized 3.6-kW PV system."

So the study concluded that home buyers were will to pay $4 a watt for used/old solar systems when they can currently pay $3.5 a watt for a new system.
OK, if you say so.

Disclosure:
I think more homes should have solar.
I think homes should be built allowing for more Southern roof exposure if possible to generate more electricity from solar.
I believe global warming is real.
Yeah, it's us humans doing it.
I am not going to vote for people with an "R" after their name.
Sorry, I don't want WWIII, more tax breaks for the rich, or people that pretend global warming isn't real.

That said, I still stand by my assertion that a $15K solar system installed today would get you at most $5K if the house sold tomorrow.

[Willaby]

You are so brain washed by what you think is the solution to everything. Sure solar may be important to some people that live in CA but what about the rest of the country.

I know half a dozen real estate people here in Florida and none state that a solar pv system increases the value of a home. Cheap electric bills are so low on peoples critical list that saving a few hundred a month is nothing compared to what they spend on food, insurance and medical. For that matter our electric costs are set to go down this year and most of us only pay about $0.12/kWh.

But go ahead and believe what you read and think. Just don't drink the cool aid.

It's definitely more of a California thing, including the brain washing from Sacramento. Here in San Diego, our average cost per kwh is double the average, so buying a house with well installed solar makes financial sense. But, there's also a mindset here more than most parts of the country: solar = no carbon = green = warm and fuzzy feelings = I'll pay more. Most EV's are initially only available in California and a few other states (FL isn't one of them). Along the lines of Yaryman's statement as to a $5k value, I'd say a $15k system cost would net out at around $10k after credits and then be worth something between zero and $15k during a sale of the property (basically I'm not arguing with $5k). I've seen some older systems here that would be a liability too, and certainly in 12c kwh Florida they would be.

btw, Yaryman, not to stir it up, but Global warming being real, do you believe man-made, natural cycle, or both, and is it really that bad? Make no mistake, the "D" vs "R" is about money & power, poster child example being Gore.

[veritass]

The additional amount a homeowner should pay for house should be the net present value of the electricity costs avoided from having the the solar panels on the roof.

Additional amount to pay for home = Sum of all electricity bills without solar - Sum of all electricity Bills with Solar.

Amounts should be adjusted to reflect the time value of money.

[SunEagle]

The additional amount a homeowner should pay for house should be the net present value of the electricity costs avoided from having the the solar panels on the roof.

Additional amount to pay for home = Sum of all electricity bills without solar - Sum of all electricity Bills with Solar.

Amounts should be adjusted to reflect the time value of money.

While I agree that logic makes sense but when it comes to real estate most people are sold on what the home does for their excitement level. For some reason low to zero electric bills doesn't motivate people that have POCO's charging low electric costs.

[Yaryman]

The study quoted is dated 1/19/15. Somehow they came up with this conclusion.That said, I still stand by my assertion that a $15K solar system installed today would get you at most $5K if the house sold tomorrow.

"We find that home buyers are consistently willing to pay PV home premiums across various states, housing and PV markets, and home types; average premiums across the full sample equate to approximately $4/W or $15,000 for an average-sized 3.6-kW PV system."

So the study concluded that home buyers were will to pay $4 a watt for used/old solar systems when they can currently pay $3.5 a watt for a new system.
OK, if you say so.

That said, I still stand by my assertion that a $15K solar system installed today would get you at most $5K if the house sold tomorrow.

I completely forgot about the 30% federal tax credit. Who in their right mind would pay anything close to full price for a installed solar system when they could buy a house without solar and put in a new more effective system and get the 30% for themselves? Let me change that previous statement.

A $15 solar system installed today might, just might, maybe get you $5K tomorrow if you sold tomorrow.

I think this "study" is about as accurate as those current government reports that claim there is no inflation, well unless of course you buy things in the real world.

[J.P.M.]

The additional amount a homeowner should pay for house should be the net present value of the electricity costs avoided from having the the solar panels on the roof.

Additional amount to pay for home = Sum of all electricity bills without solar - Sum of all electricity Bills with Solar.

Amounts should be adjusted to reflect the time value of money.

1.) How might the ITC impact your additional amount to pay ?

2.) What if the PV system is grossly oversized for a potential buyer's (small) usage such that the sum of POCO purchased power becomes negative, or very small ? Does the additional amount to pay become negative ?