New reports come out each month describing how much more solar panels add to the value of a home. Reports from the Appraisal Institute, studies from Berkeley Labs and analysis of solar home sales from metropolitan areas throughout the country repeatedly show that solar panels add to the value of a home. However in the Phoenix area, solar home owners want to know, “Do solar panels increase the value of a home?”
Because using electricity in the Phoenix area is not an option, a solar system should not be treated like other features and amenities in a home. Because solar panels have adds a unique benefit to the home (i.e. electricity that powers the home), the solar system can significantly reduce the cost of ownership. These saved costs should be valued with the home (and the mortgage). Factoring in rising utility rates, having solar on a home is an economic home-investment.
Typically from the standpoint of value, Phoenix home appraisers value homes based upon how “comparable” the home is to recent home sales in the area. In the event that one comparable has features that the subject property does not, the home appraiser will adjust the value to reflect the difference. These adjustments are typically based upon verifiable value differences that are published and used by the home appraiser. Solar, however, represents a new technology that many home appraisers do not know how to properly value–leaving some to speculate value based upon unverified savings, some to guess based upon acquisition costs minus depreciation, while most will give it a nominal value just to appease the solar home owner. Most appraisals, in my opinion, do not accurately reflect the true value of the solar system since most home appraisers have not been educated into solar home valuations or appraised solar homes in the Phoenix area.
This is not to say that a solar home owner is not able to obtain a fair home appraisal to include a proper valuation for the solar system in Phoenix. Many of the home appraisals where I have represented the home seller have resulted in fair to surprisingly good valuations for their solar systems. As an experienced solar listing agent, it is important to recognize not only the size and savings but the type of equipment and how that can differ from other types of solar.
Each property and each solar system in the Phoenix area will have a unique value based upon current home sales, current utility and mortgage rates, the production and savings, and the type of solar equipment.
If you are thinking about the sale of your solar home in Phoenix and would like to know if solar increases the value of your solar home, give me a call at 480-888-1234.