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Saturday, April 13, 2024

How Much are Your Home’s Solar Panels Worth?

Solar Panels on Roof

By Jan Green

Solar has become a hot topic of late in the media and even in elections. There are about 330 reasons homeowners in Arizona should be interested in harnessing the sun’s rays — as that is the approximate number of sunny days each year. And with Arizona’s abundant sunshine, why not? After all, Arizona is number one in the U.S. for solar per capita, according to the Solar Energy Industries Associations.

Given its popularity, solar panels are selling well in Arizona but more for commercial installations than residential. The majority of residential solar systems are leased, oftentimes with no out-of-pocket expense by the homeowner. But there is also a lot of misinformation in the marketplace from some solar companies and related industries. Homeowners need to understand the difference between a leased solar system and an owned one.

Leased solar systems are treated as personal property when a home sells and are given no value. Buyers of these homes need to meet minimum FICO requirements and are required to assume the existing lease and understand that the transfer of the system occurs when the leasing company receives a copy of the new deed for the home.

Owned solar systems will add value to the home depending on the energy savings and other factors. Valuing a solar panel system is accomplished by the appraiser using a formula found on the Green and Energy Efficient Addendum, located on the Appraisal Institute website shown below.

Not every appraiser has experienced a sale with solar panels or understands the difference between a leased system and an owned system, much less how to value an owned solar system. In Arizona, our real estate industry and appraisers are sorely lacking in education on this topic and about energy-efficient homes in general.

Due to this lack of education, the Residential Green Building Committee of the U.S. Green Building Council’s Arizona Chapter is hosting the first solar course for appraisers for the state of Arizona. The course, “Residential and Commercial Valuation of Solar,” includes 15 CEU’s for appraisers. Sandy Adomatis of Adomatis Appraisal Services in Punta Gorda, Florida is teaching the course, which she created. Adomatis is the former vice chair of education for the Appraisal Institute and is also the creator of the Green and Energy Efficient Addendum. The hope is to educate appraisers on the intricacies of appraising a home with a leased or owned solar system.

For more information regarding the course, visit appraisalInstitute.org.  There, you can listen to Sandy’s video posted on the site.

Jan Green, REALTOR®, GREEN®, EcoBroker, RE/MAX Excalibur, is a volunteer with the Residential Green Building Committee, US Green Building Council, AZ Chapter, since 2009.

Read more about solar energy at greenlivingaz.com/solar.


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