ROOFTOP SOLAR AND REAL ESTATE VALUES
Fixing The Value Problem: New Tool Assesses The Worth Of PV Installations
Jessica Lillian, 20 December 2011 (Solar Industry)
"How much is that PV installation on the roof worth? An April study from the Lawrence Berkeley National Laboratory confirmed that homes with PV enjoy a sales-price boost of approximately $3.90/W to $6.40/W when the properties are sold.
"…[M]ore and more homes and businesses are outfitted with PV…[but] real estate appraisers and finance professionals have struggled to find a consistent method that allows them to properly add a solar installation's value to the property and associated mortgage…[Often] PV installations have received little or no value in real estate transactions…[Researchers] at Sandia National Laboratories…[recently]
unveiled a new tool…to [value the PV system in the real estate transaction]…"
click to enlarge
"Sandia's tool relies on…income capitalization…which can be used when comparables are limited or nonexistent…[T]he appraiser or homeowner determines the capitalized value of the net income that the solar installation can generate…[T]he user enters several values [in a prepared Microsoft Xcel spreadsheet], including the local electricity rate, the local utility's escalation rate, and operations and maintenance expenses over the remaining useful lifetime of the array.
"The PV system's energy production is determined using solar resource calculations tied to the National Renewable Energy Laboratory's PV Watts model, which accounts for factors such as resistance and shading. The user also inputs the age of the modules and inverters, the system's location, and its slope and azimuth…Ultimately, the model provides a range of appraisal values - a low figure, medium figure and high figure - for the present value of all energy remaining in the system…As more PV systems are installed, more data will become available - thus allowing the tool to undergo steady accuracy improvements…"