[RE-wrenches] Value of PV system to a home

[Kirpal Khalsa]

What I have been putting forth to our customers and potential customers, is
that a PV system when looked at like an appliance is simply equal to the
value of the energy it produces over a given period....for straight grid
tied systems I have used what I think is a conservative number of 20 years
and then I multiply that by today's energy costs.......so if a system is
installed in Oregon and electricity is $.09/kWh and the system is expected
to produce 4500kWh per year then that system would add 4500kWh x $.09 x 20
years = $8100 in value to their property.....in Oregon......
Certainly you could add average utility price increases over time to the
value of the energy produced, as well as reductions in system output
overtime as equipment degrades.....additionally if a party is buying a house
equipped with a PV system they may not want to calculate a full 20 years
into that formula if the system was installed years earlier.......I prefer
to use conservative numbers in my formula inputs, however the argument could
be made stating that the 20 year time span is too short and if the lifetime
is potentially double that the value of the system also doubles.....
In my mind an off grid system can be more directly tied to the cost of the
equipment as the grid is not an alternative to the power that is
supplied.....
Finally, we have never had a customer disagree with this basic approach,
however it still falls flat on its face if the customer is not planning on
moving or selling their property!

-- 
Sunny Regards,
Kirpal Khalsa
NABCEP Certified Solar PV Installer
Renewable Energy Systems
www.oregonsolarworks.com
541-218-0201 m
541-592-3958 o

On Tue, Mar 22, 2011 at 7:44 PM, Exeltech <exeltech at yahoo.com> wrote:

> *I spoke last October with the Appraisal Journal, and specifically with
> Rick Nevin,
> author of the referenced articles.
>
> *Mr. Nevin stated a recent review conducted by the Appraisal Journal
> confirmed
> the information in the reports is as applicable today as it was when the
> study
> was conducted, and even more so given the increased cost of energy that's
> occurred since the study was published.
>
> Dan
>
> --- On *Tue, 3/22/11, Jamie Johnson <jjohnson at spefl.com>* wrote:
>
>
> From: Jamie Johnson <jjohnson at spefl.com>
> Subject: Re: [RE-wrenches] Value of PV system to a home
> To: "Keith Cronin" <electrichi01 at yahoo.com>, "RE-wrenches" <
> re-wrenches at lists.re-wrenches.org>, "Joel Davidson" <
> joel.davidson at sbcglobal.net>
> Date: Tuesday, March 22, 2011, 5:01 PM
>
> Keith & Joel,
>
> The old metric was $20 in value for each $1 saved in energy, however the
> Appraisal Institute has not supported that valuation metric for some time
> now and neither has Fannie, Freddie or FHA.
>
> Using the gross sales price that the customer paid for PV as a valuation
> number was also shot down.
>
> And unfortunately most regional MLS databases don't provide a category for
> solar electric, solar hot water or solar pool heaters, so that makes it
> difficult for an appraiser to use the sales comparison approach.
>
> A year ago I began developing a valuation model for PV for the Appraisal
> Institutes Educational Committee and they are now incorporating parts of
> it into their training programs on "valuation of sustainable buildings" for
> appraisers.  Earlier this year DOE awarded a grant to Sandia Natl Lab to
> essentially do the same thing for the Solar America Cities program (soon to
> be the Solar America Communities program) and they have since picked up my
> work on the valuation model.
>
> A proof of concept spreadsheet (which takes all of the fun out of
> it) and pdf explanation of the valuation model should be released this
> summer.  I will provide the download link to the list when it is available.
>
>
> It's important to note that any valuation model for PV needs to be accepted
> by Fannie, Freddie and FHA before it is relied on and quoted by the PV
> industry.  There are currently ongoing discussions between FF&F, AI and DOE
> on PV valuations and hopefully they will resolve the PV valuation issues for
> loan transactions soon.
>
> Jamie Johnson
> NABCEP Certified PV Technical Sales Professional PVTS012911-44
> NABCEP Certified Solar PV Installer 031310-118
>
> General Manager
> SOLAR POWER ELECTRIC
>
> **
>
>
>
> -------- Original Message --------
> Subject: [RE-wrenches] Value of PV system to a home
> From: Keith Cronin <electrichi01 at yahoo.com<http://mc/compose?to=electrichi01@yahoo.com>
> >
> Date: Tue, March 22, 2011 2:57 am
> To: RE-Wrenches <re-wrenches at lists.re-wrenches.org<http://mc/compose?to=re-wrenches@lists.re-wrenches.org>
> >
>
>  Hi
>
> Was wondering if anyone has any new data points on the additional value a
> PV system adds to the home?
>
> If someone spends $X for a system and saves $Y a month/year, how is this
> being calculated?
>
> Do we have actuaries with enough empirical data to suggest what the numbers
> would look like?
>
> Realizing alot has to do with location, current cost per kWh of electricity
> etc.
>
> Could have swore there were some studies done to imput the value of two
> homes on the same street, one with solar and one without- for some granular
> details on the delta in values.
>
> Thanks
>
> Keith
>
>
>
>
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