The Electricity Markets and Policy Group is pleased to announce the release of a new report, Appraising into the Sun: Six-State Solar Home Paired-Sales Analysis.
The research engaged a team of seven appraisers from across six states to determine the value that host-owned solar photovoltaic (PV) systems added to single-family homes using the industry-standard paired-sales valuation technique, which compares recent sales of comparable homes to estimate the premium buyers would pay for PV.
The appraised premiums confirmed statistical modeling results from a large Berkeley Lab study conducted in 2013, which found that buyers were willing to pay approximately id="mce_marker"5,000 more for a home with the average-size solar photovoltaic system (3.6 kilowatts) that sold in 2010. This equates to about four additional dollars per watt of solar power, though premiums for any individual home are market dependent and are likely smaller given currently falling installed solar prices.
The study is the most comprehensive study to date that relied exclusively on appraisers to gain insights toward this critical valuation issue. These results will benefit appraisers, real estate agents, and mortgage lenders who increasingly encounter PV homes and need to understand the factors that contribute to, and detract from, market value. These include the size of the system, the available incentives and installed prices at the time of sale, and the underlying retail electricity rates.
The report also details findings as to how premiums compare to values estimated using the income and cost approaches--methods familiar to appraisers. They found both the replacement cost, specifically one that takes into account federal state and utility incentives, and the present value of energy savings are likely good predictors of premiums found in individual markets. The researchers did not find a relationship between having solar and a decreased time on the market.
The full 2015 report, along with a fact sheet and a summary slide deck, are available for download here.
To see a LBNL press release that summarizes some of the report's key findings, click here.