Appraisaing Property With Solar Panels

To objectively derive the additional value that solar panels contribute the property appraisers turn to the discounted cash flow dcf method.

Appraisaing property with solar panels.

One of the strongest arguments for solar energy is that it s an investment that pays for itself. If it s leased it has no impact on value. When appraisers or real estate agents list a home on the market with solar they ll often just indicate that the home has solar panels. If the solar panel system is owned and at least one comparable sale used in the appraisal report also has and owned solar panel system then the solar panels can be adjusted within the sales comparison grid showing value.

In the absence of green comparables appraisers have little evidence to conclude that solar panels and other features add value to a building. One way to show value for solar panels is to write them as a line item in the sales comparison grid within the appraisal report if the following two criteria are met. The appraisal institute residential green and energy efficient addendum solar page can be attached to the mls upon listing the property used by appraisers to gather the specifics needed to value the system. The skilled appraiser will take extra steps to understand the market s attitude toward solar.

The appraiser emphasized that solar panels are a new arena for appraisers the issue simply hasn t been around long enough for there to be a consensus on how to value the addition of the panels. To get any details like the kilowatt hours or age of the system appraisers have to call the installers themselves. Many appraisers are taking the position that there is no added value and perhaps some diminished value with leased solar panels because the buyer must assume the lease. If you are appraising a property with solar panels the first thing you ll need to figure out is whether the solar array is owned or leased.

On average solar panels raise a home s value by 4 1 across the u s according to a new zillow analysis of homes across the country that s a boost of 9 274 on a 226 300 home according to the study. Whether the solar panels are leased and owned also may affect the appraisal. This often affects the buyer s purchasing ability and could disqualify a buyer from purchasing the home once the mandatory solar lease is added to the payment calculations by their lender. Lenders are responsible for ensuring the appraiser has accurate information about the ownership structure of the solar panels and that the appraisal appropriately addresses any impact to the property s value.

Homes equipped with solar power systems sell for 3 74 more than comparable non solar properties. A recent study by the lawrence berkeley national laboratory concludes that solar panels increase home value by 14 329 on average.