Equity Increase in home after solar install

[sensij]

I haven't seen this discussed much or really at all either the owned or leased re-sell threads. What POCO rates are available to the buyer of a home with pre-installed solar? Is iit just what is available to someone installing a new grid-tie, or do they get some grandfathering of things like NEMS as well?

As we know the value of buying a new solar diminishes greatly as NEMS goes away, similar would seem to hold if the home buyer is not able to take advantage of all that the present owner can...

In CA, NEM stays with the system from the original grandfathering date, even as ownership is transferred. I doubt a specific rate plan would transfer, if that rate plan is closed to new customers (like E-6 for PG&E will be soon).

[NYHeel]

This is regarding a fully paid for owned system. Leased and PPA systems are a whole different animal

A buyer either isn't going to like the aesthetics of solar or they're not going to care. If they don't like it then they're not going to buy the house or they'll view the solar panels as a negative. If they're neutral on the look then a smart buyer would figure that the panels add about 7-10 years of energy savings to the value of the home.

Of course ultimately your house is worth what someone will pay for it and solar is but a small part of that. In a vacuum with two identical houses solar should add 10 years of energy savings to the value, but also dwindle down your pool of buyers to those who don't mind the aesthetics. However, I think it's a pretty nice perk for a buyer to get a "free" 12,000 kWh of energy every year. So clearly that perk is worth something. It's just a question of how much it's worth.

[SunEagle]

There is a home close to me that just went up for sale. It is pretty "up scale" with about 10 acres, 9500sq ft home, a big pool and is on the bay with a 300ft dock & 2 boat lifts.

Now here is the thing that drives me crazy. This property has a ground pv array consisting of 150 panels. I am not sure of their wattage but they look like around 300w each. That is a 42 to 45kw system that only gets mentioned in the sales add as "solar pv system". There isn't even a photo of the array but there are 25 photos of the rest of the home.

Can you imagine not mentioning a solar pv system that is probably in the neighborhood of $100,000.

Here is a picture of that 150 panel array.

[J.P.M.]

I go by an article from the Appraisal Journal: "Evidence of Rational Market Valuations for Home Energy Efficiency" that suggests using 20 years worth of savings as the what the improvement is worth in home appreciation. Your solar gonna save you $100/month? that makes the home $24,000 more valuable.

That's one way, and putting all systems on some equal evaluation method may be a good start. However, and not knocking you, but as you describe it, it seems to take no account of the time (net present) value of the savings, some or any consideration of future POCO rates or rate increases and their net present value, or system maintenance requirements. The poor side of using time value of money considerations is that it opens Pandora's box for manipulation unless everyone uses the same assumptions about discount rates and durations.

[malibu3105]

I recently had my solar system 8.4kW installed. I am producing much more than I need, and looks like I will have near $100.00 surplus from my electric company per month. So may get $1,200.00 at the end of the year. In addition to not paying my $150.00 per month average electric bill. If I was buying a house and the seller could prove all that, I would certainly pay more for the home!! But that is just me. I would always want solar, why pay electric when I can purchase solar and once I own it I never again pay for electric. btw, seems it would last more than 30 years, and even if I was replacing 5 panels every 5 years would still be cost effective. Just mho

[azdave]

What POCO rates are available to the buyer of a home with pre-installed solar?

My contract specifically states that it is transferable to any new owner and that the account is grandfather for 18 more years. In my case, I could prove to a prospective buyer that at today's rates I'll save around $27,000 in the next 18 years. Does that mean I can get $27,000 more in value? I'm not selling so who knows.

[malibu3105]

I would pay more for a home that potentially would not have any electric bill payment!! Even if it's the SCE $10.00 per month, I would take that. And especially with a known working installed solar system.

[SunEagle]

I would pay more for a home that potentially would not have any electric bill payment!! Even if it's the SCE $10.00 per month, I would take that. And especially with a known working installed solar system.

It still comes down to where you live and what the house is worth with or without the solar pv system.

IMO I would rather have a home that is well insulated, has energy efficient appliances, high sear rated AC system, LED lighting and a few other things before I would even look at if a pv system was part of the package or not.

[malibu3105]

SunEagle, I get you I'm just a techie that want's Solar lol. What can I say. Each his own, but I like having it I have no intention of selling my home, will just rent rooms eventually or leave it to my kids.

[ButchDeal]

SunEagle, I get you I'm just a techie that want's Solar lol. What can I say. Each his own, but I like having it I have no intention of selling my home, will just rent rooms eventually or leave it to my kids.

Your best option is a bimodal system then. It will give you some backup capability like you want as well as feedin to offset other grid use when grid is functioning and option to attach generator.

[SunEagle]

SunEagle, I get you I'm just a techie that want's Solar lol. What can I say. Each his own, but I like having it I have no intention of selling my home, will just rent rooms eventually or leave it to my kids.

Actually I would like a solar pv system for my home but I do not plan on staying in my present house much longer.

Where ever I finally decide to install a pv system (it will be in Florida) it will still take close to 10 years to pay for itself based on the current POCO rate and Solar $/watt installation cost.

[wwu123]

In CA, NEM stays with the system from the original grandfathering date, even as ownership is transferred. I doubt a specific rate plan would transfer, if that rate plan is closed to new customers (like E-6 for PG&E will be soon).

Wow, if NEMS 1.0 is grandfathered, then for a relatively new and good condition system, it's going to have a whole lot more value than installing a new system after NEMS goes away. Even if one can't get on old plans like E-7 or soon E-6. Of course no reason to overpay or even close to $3.50 / watt for new install, but could be more towards say $2/watt than a $1 a watt....

[J.P.M.]

I recently had my solar system 8.4kW installed. I am producing much more than I need, and looks like I will have near $100.00 surplus from my electric company per month. So may get $1,200.00 at the end of the year. In addition to not paying my $150.00 per month average electric bill. If I was buying a house and the seller could prove all that, I would certainly pay more for the home!! But that is just me. I would always want solar, why pay electric when I can purchase solar and once I own it I never again pay for electric. btw, seems it would last more than 30 years, and even if I was replacing 5 panels every 5 years would still be cost effective. Just mho

I'd like to understand how you plan to get $1,200/yr. at the end of the year when over generation payment rates are something less than $0.04/kWh at this time. Assuming your somewhere in So.CA, I don't think an 8.4 kW system can generate that much power as well as providing an additional 8,000 or so kWh/yr load. Maybe I'm missing something. Or, maybe you're misinterpreting what the POCO is saying or putting in their bills.

As for desirability of a PV system as f(what it's worth), I kind of thought that if the net present value of the expected future savings didn't equal the net present value of the installed system cost then the project was not cost effective by some criteria and therefore perhaps less desirable. Then, there's the comparison of alternatives route, when alternate places to put the assets are examined to see if there is a better ROI via some other investment.

Just sayin'.

[DanKegel]

Wow, if NEMS 1.0 is grandfathered, then for a relatively new and good condition system, it's going to have a whole lot more value than installing a new system after NEMS goes away.

True... it'd be like having a free and possibly quite large house battery.

[J.P.M.]

Wow, if NEMS 1.0 is grandfathered, then for a relatively new and good condition system, it's going to have a whole lot more value than installing a new system after NEMS goes away. Even if one can't get on old plans like E-7 or soon E-6. Of course no reason to overpay or even close to $3.50 / watt for new install, but could be more towards say $2/watt than a $1 a watt....

If/when the fed. tax credit goes away, and if NEM continues (both of which seem likely in CA at this time), existing systems that have grandparent status with some years to go may very well enjoy enhanced value for owners who what solar relative to adding a system to an existing residence, mostly because the alternative - a new system - will perhaps have neither of those advantages.

In such a scenario however, it may be that the cost of new systems will be much less than currently, partly because of tech/production improvements, but a fair amount of such price reductions due to the competition of the marketplace and the reduction/elimination of solar's advantages.