Appraisal Should An Adjustment Be Made For Solar Panels Financed

Solar panels and green homes are becoming increasingly more common in the marketplace.

Appraisal should an adjustment be made for solar panels financed.

Whether you choose to buy or lease your solar panels will have a major impact on your system s long term value. 16 its updated selling guide for single family homes which includes an adjustment to comparable sales that eliminated the 15 percent net and 25 percent gross adjustment guidelines. Determining the value of solar panels is an issue that has many appraisers asking questions. Solar pv systems provide financial benefits and are financially feasible in some areas.

Financing is one of the major issues a realtor or an appraiser must understand about residential solar power before trying to value a pv system on any type of property. According the fha s guidelines appraisers must analyze and report the local market acceptance of special energy related building components and equipment. When appraising a home with owned solar panels or other energy efficient features there are several additional factors which determine how much value is added. How are you financing your solar panel system.

The most recent edition of the fha s single family housing policy handbook requires that active and passive solar energy systems including solar photovoltaic panels solar hot water and passive solar design be assessed as special energy systems and their value added to the home. While solar leases and power purchase. Understanding the value of renewable energy and your home appraisal. 1 utility cost savings 2 risk of repairs to the house caused from having solar panels 3 the limited number of people who can repair the panels and 4 the cost of removing the panels and repairing the house once the technology becomes obsolete.

The skilled appraiser can assist the homeowner in understanding the size of system they need to produce the energy they use. The ho seemed dismayed as there was no adjustment credit for the solar panels they had put on their house. Engaging a skilled appraiser that understands solar photovoltaics and how to value them is a smart move before the purchase. A home owner ho came to me the other week with an appraisal.

Fannie mae released on dec. Under the new comparable sales guidelines fannie provides. After reviewing the appraisal i did comment that the solar panels had been mentioned but as the ho stated no adjustment was applied. Is it a lease power purchase agreement solar loan pace loan which may nullify the ability to finance a home on the secondary market as they can stand in the first mortgage position or cash purchase.

The only solar system which deserves a boost in the appraisal analysis is an owned system. If the seller wants to be reimbursed for some of the cost of the panels in the value of the property some appraisers have opined that they would likely consider the following factors. If you have enough to make a purchase in cash you ll save more than with any other option but even with a 0 down solar loan your savings could still be in the tens of thousands. Otherwise it s as much of a leased responsibility as it is a benefit given the uncertainties over the long term.

If you ve seen a rise in solar panels in your area consider taking the first step toward competency in the valuation of this energy efficient feature of real estate.