(2/6/2012) - Hot on the heels of guidelines to help appraisers analyze the value of energy-efficient home features, the Appraisal Institute (AI) announced its support for a new tool to help appraisers specifically hone in on the value of solar power.
The tool "PV (for photovoltaic) Value" is a Microsoft Excel spreadsheet developed by Solar Power Electric and Sandia National Laboratories to determine the value of a PV system. The spreadsheet uses an "income capitalization approach whereby the energy value is calculated over the lifetime of the PV module warranty."
Variables crunched in the spreadsheet include the Zip Code of the location, local utility rate and characteristics of the PV system. An appraisal range of value estimate is returned as a function of a pre-determined risk spread. This tool can be used to value a PV system at any location in the U.S. through its interface with the National Renewable Energy Laboratory's PVWatts simulator.
Yeah, it's Greek to most, but the need for the esoteric analysis stems from the growing realization that, not only does solar energy save on the monthly power bill, buyers are willing to pay a big premium for solar power and the appraisal industry needs to make it less of a crap shoot trying to determine the true value of solar.
"Finding a way to value residential and commercial properties with PV installations is a growing challenge facing the nation's real estate industry. As more homes and businesses turn to solar power, the need grows for ways to develop reliable and credible opinions of value of the installations and the power they generate," AI reports.
The U.S. Environmental Protection Agency (EPA) recently announced that 25 percent of all single-family homes built in 2010 earned EPA's Energy Star, up from 21 percent in 2009 and, in many of those homes, solar power was the key to the Energy Star recognition.
Also KB Home recently announced solar panels as standard on "built to order" homes in some Florida communities, solar energy stocks are becoming stocks to watch and some homes are equipped with "zero energy" panels that are so efficient the homeowner pays nothing more for electricity than a monthly connection fee.
That's real value and a great home buying and selling point.
The first of its kind addendum, it was designed to produce data that can be entered into the new solar spreadsheet.
AI issued the optional addendum to plug into Fannie Mae Form 1004, the appraisal industry's most widely used appraisal form for mortgage lending purposes.
"The Appraisal Institute is pleased to support yet another solution to a challenge facing the real estate industry," said AI President Sara W. Stephens.
She added, "We encourage real estate appraisers, mortgage underwriters, credit analysts, real estate property assessors, insurance claims adjusters, photovoltaic industry sales staff and others to take advantage of this new tool."
Solar Power Electric is a residential and commercial solar company and electrical contractor located in Port Charlotte, FL.
In Albuquerque, NM and Livermore, CA, Sandia National Laboratories is a multi-program laboratory operated and managed by Sandia Corp., a subsidiary of Lockheed Martin Corp., for the U.S. Department of Energy's National Nuclear Security Administration.
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