All Forum Posts by: Jake Hilden

I’m a real estate agent in Minnesota and also a solar consultant remotely to many states. The home value thing is never a guarantee and it is highly location and buyer specific. A place like San Diego that has highest electrical rates in the country, a solar system will look more beneficial to buyers. The benefit usually from from owned systems, not leases or PPA’s. In MN, there’s been some cases where an appraiser has given the solar system half of the install value to the home value. Then there are some who haven’t given any value because of not enough comps or data to support it. It’s still a new thing in many parts of the country and there are really no guarantees or standards. I’m obviously not against Solar at all, I just think it’s important to be realistic that it won’t always increase the value of the home.

Hey @Dave Van Horn! I work in the solar industry as a consultant. I partner with a nationwide company called Powur. 

PA is a great state for solar due to the strong net metering programs and the SRECS. 

I’d be happy to chat further with you if you’d like.

Anthony,
One thing I want to make sure you’re aware is that the tax credit doesn’t cover the new roof. You’d only be able to claim for the portion related to the solar only. This is a big misconception that many solar reps still tell people. 

As always, be sure to check with a CPA regarding that but this is taken directly from energy.gov: 

Sometimes. Traditional roof materials and structural components that serve only a roofing or structural function do not qualify for the credit. However, some solar roofing tiles and solar roofing shingles serve both the functions of solar electric generation and structural support and such items may qualify for the credit. This may change based on additional guidance from the Treasury Department.”

I love that you’re thinking about the environment though. That’s a huge passion of mine.

Do you pay utilities or are your tenants on their own meter and they pay it? That makes a difference on the investment side of things.

I’d be happy to connect and chat more if you’d like. 

Hey Brian, I work in the solar industry (primarily in California) and I think it’s great that you’re looking into this ahead of NEM 3.0. 

This is from a study in souther California from the Lawrence Berkeley National Laboratory: “In fact, 77% of the solar leases in the group were transferred successfully to new owners, and only 20% of homeowners reported that would-be buyers were scared off by the solar lease process.”

This was solar leases but PPAs are very similar. It’s very buyer specific on how they’ll view it when buying the home. Some realtors on my team in CA who also sell solar absolutely hate them. There are times as well when we’ve beaten price using financing when going up against another companies PPA quote. 

So it still might pay off to get a few quotes when making your decision. Since you don’t qualify for tax credit, PPA could be a great option if price is right because the value to a new buyer will almost always be much higher (especially when grandfathered into NEM 2.0). But, just know it could scare off some potential buyers. It’s hard to say. 

Let me know if I can help any further, and good luck on your journey!

Thanks for sharing that! I’m bookmarking that for future reference and going to research that more. 

This is straight from the Energy.gov website: "Yes. Solar PV systems do not necessarily have to be installed on your primary residence for you to claim the tax credit. However, the residential federal solar tax credit cannot be claimed when you put a solar PV system on a rental unit you own, though it may be eligible for the business ITC under IRC Section 48. See 26 U.S.C. § 25D(d), which specifies that eligible solar electric property expenditures must be “for use at a dwelling unit located in the United States and used as a residence by the taxpayer” (emphasis added)."

All the information on the tax credit state it has to be the primary residence or a "vacation" or secondary home that you occupy for some of the year. But, there are so many ins and outs and things that may be different that are far above my paygrade. But, just wanted to point out what I've learned about it. If you happen to get solid advice on this differently, I'd love for you to connect and let me know. Any knowledge I can soak up on this, the better.

That sounds like an interesting way to go about it regarding the depreciation. Thanks for the information on that. I learn something new every day!

Thanks, Brian.
 

Hi Robert! 

I would be happy to connect with you if you haven't already with someone. I think there is far more value in having solar on a STR than a long-term rental just because you are most likely the one paying for the utility bills. And the cost of the electric bill is going to be all over the place. With solar, you will have a fixed rate that you can budget for and help hedge against the ridiculously high California prices. Buying is almost always going to be better through cash or a loan and much easier down the line if you ever sell the property.

If you want to chat more, feel free to connect and we can talk!

@Eric Lam as others have already mentioned, this is not something to bank on at all. There are appraisers in certain parts of the country that I know who put a value on them but we're talking AZ, CA, etc. where solar is more widely adopted. I never tell any homeowner I speak with to count on solar increasing home value. It is very location-dependent and also buyer-dependent. It also depends on how much money you are saving each month and if that brings value to the buyer's eyes. The cost savings are very location and homeowner-dependent. There are too many variables to see solar increasing value. If you are going to solely do it for that, then don't do it. But, if you are planning on staying in the home and want to save money long-term with a fixed rate, then it is worth looking into.

Hi Brian,

For the most part, you will find many varying responses to this question because everyone has a different opinion on solar. But, to see how much and if this would make sense for you, it would depend on many varying factors. How much electricity is used in each home? What is the roof orientation like for each one? Are they unobstructed by shade?  Do you have long-term tenants where you would have a good idea of average kWh consumption year after year? 

With that being said, CT has great rates with their RES program that started in 2022 which makes it a pretty great state for solar, being each home is set up correctly for it. I talk to mainly owner-occupied homeowners and solar makes sense for many but not all. The investment side of things would be a bit different and you would want to make sure the numbers work for your circumstance.

I'm also a bit biased because I truly believe in solar and the benefits of it beyond just the numbers.

In regards to the tax credit, be sure to speak with a professional on that because you have to live in the property (for at least a portion of the year) to be eligible for the credit. But, I am not in a position to give advice on that. Just make sure you get the correct advice on that.


 

@Corey Hawkinson

Thank you! Yes, hopefully I’ll see you in them. My schedule is a bit hectic also so hopefully I’ll be able to fit them in as well.