Equity Increase in home after solar install

[sensij]

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....

I don't see the value of NEM 1.0 as that much better than 1.1. Maybe when we get past 2019 and NEM 2.0 truly gets released, there might be more value, but the few pennies per kWh consumed difference doesn't justify much of a premium to me.

[malibu3105]

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'.

Not sure, just guessing based on my last month bill showing a credit of over $200.00 for that month. 12 months in a year, if I get 1/2 of that it would be over $1,000.00. So I was just going from my SCE bill. But does not matter, I will still be paying less then when I was paying for my power I am happy with or without it. In the meantime, I will enjoy reading my bill showing a credit owed !!!!

[paul65k]

Not sure, just guessing based on my last month bill showing a credit of over $200.00 for that month. 12 months in a year, if I get 1/2 of that it would be over $1,000.00. So I was just going from my SCE bill. But does not matter, I will still be paying less then when I was paying for my power I am happy with or without it. In the meantime, I will enjoy reading my bill showing a credit owed !!!!

Your credit is based on the retail (what you would pay) price for the electricity and is great if in coming months you will consume more than you produce, in this case Net Metering is a huuuuuuuuge benefit. If you are thinking that you will get that much credit if you have an overage you need to do the real math. With SCE you can figure an average cost of $.159 per KWh cost to buy but they will only pay out Approx. .04 per Kwh if you have extra credit at the end of the year or..............25% of what it costs you to buy the same power, which is why most folks try to size their system to 85-95% of historical usage................in your case you may want to look into an electric car or 2 to get the maximum benefit from your system

[foo1bar]

Not sure, just guessing based on my last month bill showing a credit of over $200.00 for that month. 12 months in a year, if I get 1/2 of that it would be over $1,000.00. So I was just going from my SCE bill. But does not matter, I will still be paying less then when I was paying for my power I am happy with or without it. In the meantime, I will enjoy reading my bill showing a credit owed !!!!

If every month is like this one, you'll have 897kwh of excess production per month.
897kwh *.$04/kwh = $35.88
So you could get a check for around $430 (that's $36 * 12 months)
Most likely you'll use more during the year and that -897 will be a positive number in other months.
(I used $.04/kwh - it could be $.035/kwh or $.045/kwh - but I believe it's somewhere in that range)

The $200 you see is credit toward $ based consumption.
If you use 2000kwh in off-peak it still wouldn't zero out that $ - but you'd have no excess kwh to give you money back at the yearly true-up. SO the dollar-amount at true-up would just reset to zero and there would be no payment required for the excess kwh you used.

[J.P.M.]

Not sure, just guessing based on my last month bill showing a credit of over $200.00 for that month. 12 months in a year, if I get 1/2 of that it would be over $1,000.00. So I was just going from my SCE bill. But does not matter, I will still be paying less then when I was paying for my power I am happy with or without it. In the meantime, I will enjoy reading my bill showing a credit owed !!!!

As I and others have pointed out, that's a credit against future use.

Be as happy as you want and amen - not my bill/money/system/house/whatever, but be aware that your bliss is temporary, based on ignorance and will be adjusted at trueup time. Not trying to rain on your parade/joy, but the way things stand now and for the likely future, you'll never see a check from the POCO that reflects those $$ figures. What will happen is you'll wind up with a cost ineffective sum for the excess generation at a rate of something like $0.04/kWh, +/- some.

[malibu3105]

Could be. Will still be in bliss. If I had not installed Solar, then I would be paying more then I am now. This way I can add any electric items I want and not worry about it.
So I am ahead regardless.

[sensij]

One more data point, for those interested... just got my house appraised (San Diego) with my purchased PV system almost exactly 1 yr old. The appraiser bluntly said, we've got no idea what to do with these systems, so we are ignoring them". I did not assume more than that in my planning, but, damn.

[solardreamer]

Just got my house appraised in SF Bay Area for refi and received similar feedback from appraiser. There is not enough solar homes for the appraiser to give accurate appraisal for solar system value. However, the appraiser did want to know if the solar system is owned. Apparently, a leased solar system would have negative impact regardless how much electric utility savings it could provide. Another reason I am glad I purchased mine.

[J.P.M.]

One more data point, for those interested... just got my house appraised (San Diego) with my purchased PV system almost exactly 1 yr old. The appraiser bluntly said, we've got no idea what to do with these systems, so we are ignoring them". I did not assume more than that in my planning, but, damn.

And so it may remain until, as usual, the market wades through the pro and con hype, mostly from people who know squat about solar, and eventually buyers figure out what PV systems are worth to them. At that time, perception will become reality, and that de facto reality will flush down to appraisers and eventually those appraisals will reflect some version of reality to banks and mortgage slugs, closing the loop on what the market thinks residential PV is worth. At least that's one possibility of many scenarios.

In the meantime, as you have done, plan for the worst, hope for the best, and be pleasantly surprised and maybe ahead of the game if things work out better than planned.

Any appraisers reading this who may care to comment ??

[sensij]

On a related note, a conversation with a mortgage broker about solar was also interesting. He had deep reservations about whether people using hero loans were really coming out ahead, and wondered how big the time bomb would be as those in that program start trying to sell.

[J.P.M.]

On a related note, a conversation with a mortgage broker about solar was also interesting. He had deep reservations about whether people using hero loans were really coming out ahead, and wondered how big the time bomb would be as those in that program start trying to sell.

Even without considering the usurious fees that often and usually come with such loans, I was kind of wondering that myself. Seems like pretty muddy waters. More of fools rushing in I suppose.

[jasonvr]

I know this thread is a little old, but it seems appropriate to keep the conversation all in one place. I just refi'd my house and had an appraisal that came along with it. Much like earlier experiences, the appraiser mentions the solar array on the appraisal, but provided absolutely no additional home value for my brand new 6.27kW system.

So, over a year later, status quo in SoCal

SolarAppraisal.JPG

[J.P.M.]

I know this thread is a little old, but it seems appropriate to keep the conversation all in one place. I just refi'd my house and had an appraisal that came along with it. Much like earlier experiences, the appraiser mentions the solar array on the appraisal, but provided absolutely no additional home value for my brand new 6.27kW system.

So, over a year later, status quo in SoCal

SolarAppraisal.JPG

Thank you for the update.

[cebury]

It is such BS because on other items that may be exceptional to add value, there are methods in the appraisal software/method to add value to homes when no comps cover the circumstance. It even happens on lowering value. My last appraisal house was in a busy street, an obvious downside for many would be homeowners, but no comps existed on any streets like this. They deducted 20k from the value of the appraisal, fair Imo, to account for it and commented about all about it. Like a year ago, I'm still surprised in CA the green pressure hasn't been exerted yet to force guidance on the industry.

[J.P.M.]

It is such BS because on other items that may be exceptional to add value, there are methods in the appraisal software/method to add value to homes when no comps cover the circumstance. It even happens on lowering value. My last appraisal house was in a busy street, an obvious downside for many would be homeowners, but no comps existed on any streets like this. They deducted 20k from the value of the appraisal, fair Imo, to account for it and commented about all about it. Like a year ago, I'm still surprised in CA the green pressure hasn't been exerted yet to force guidance on the industry.

Believe it or not, more than few folks in CA do not like the idea of solar equipment on their property. Some folks like solar but don't want a used system - with some logic in the idea that an existing system will probably be either too small with consequent problems of upsizing and still getting full NEM benefit, or too big, with the possibility of (maybe ??), or at least the perception of the probability of paying too much for a system too large for a new owner's needs.

Others folks, including appraisers - who actually don't know any more about PV, residential or otherwise than most any home owner or anyone else, are hardly qualified to make an assessment, and their guidance is still sketchy, with my guess being it will remain so for at least the near term.

Current owners of course, are all to eager to ignore reality either way, and probably wind up swallowing the rosy stuff crammed down their throat by their solar peddler about how a PV system will add as much to a home's value as the PV's initial price, maybe even before tax credit, and want to believe systems are worth what people who have no PV knowledge think other equally ignorant people are willing to pay, mostly based on what still other ignorant people guess at.

Meanwhile, many of those of us of us who may think we have a clue about such things, wouldn't buy a house with existing PV on it for any number of reasons without a pretty severe reduction in the selling price of the property.

In the end, a thing is worth only as much as some buyer is willing to pay based on their knowledge of what they are buying. The more truly solar savvy the buying public becomes, the less a PV system will add to the value of a residence. I suppose in theory anyway, those values will be reflected in the appraisal.

I have no way of knowing this, but I'd not be terribly surprised if the value of an existing residential PV system eventually settled in to something like how the a new vehicle takes on a lower value immediately after purchase. How much is your car worth on a trade in ?

[DaveDE2]

I dunno, I'd say I'll probably get some added value out of my system when I sell. Why? Because when the potential buyer asks to see the electrical utility bill I can show them that is't only 20 bucks/mo as opposed to 200 bucks. That's gotta be worth something.

Anyhow, I'm on a 7 year trajectory to getting my system paid off, even here in Colorado where electricity is cheap. If I can get anything else out of it after that I'm happy.