All Forum Posts by: Steve K.

@Russell Brazil there actually are hard numbers we can use instead of relying on the personal experience of a handful of realtors. The appraisal institute study used sales data from 20,000 homes including homes in Maryland and determined solar homes sell at a $15k premium, so that is what most people go by. I believe you that there are realtors out there who have been unable to sell solar homes at a premium, but sales data suggests the majority of realtors are selling solar homes for a premium. Personally I know one realtor who refuses to list homes with leased solar because of one bad experience she had (and I agree with you that leased solar can cause transactional problems). However I also know many other realtors who have had great success leveraging the selling points of solar. They have been able to achieve higher sales prices because of their understanding of how solar is an asset and their ability to manage the sale in such a way to achieve a higher sales price. The second category is the larger category in my experience and according to national sales data. 

@BJ Dante I actually agree with you more or less about the mandate, I think it was unnecessary seeing as most CA new homes already come with solar anyway, and the mandate may have negative repercussions in other markets. But a lot of points being made on here saying it’s not cost effective or people don’t want it or rich people don’t buy t because they’re too smart are simply not true, so I gotta call BS when I see it. As far as solar being subsidized, if you research energy it becomes apparent quickly that all forms of energy are subsidized. The great thing about solar is there is a clear roadmap to being competitive without subsidies. The tax credit is scheduled to ramp down in a few years when prices are expected to drop enough that the subsidy will no longer be needed. Do you know of any other form of energy that has a clear roadmap to not needing subsidies? Legacy forms of energy using fossil fuels will need increased government money to stay competitive over time, while solar will not, so if you really don’t like energy subsidies then I would think solar would be your thing. Also that  $9500 number is just an example, every system is priced differently, some will be more than that some less. In California that’s an accurate number for an average sized system in new construction which is cheaper than a retrofit system. If you bother to calculate what the true cost of other forms of energy would be without being propped up by government, you will see that solar is cheap by comparison. And I’m not even suggesting to include external costs such as pollution and health issues related to burning fossil fuels, just the straight tax benefits. Energy has never been a fair playing field, it’s important to understand that.

@Russell Brazil If you guys are so rich, you should be able to afford a few fancy solar panels! Solar doesn't pencil out for everyone but increasingly for many people it does. 

Actually, if you don't have any solar panels in your neighborhood it's possible that your HOA doesn't allow it. The California mandate is one thing, but the reality of the rest of the country is that it's more common for solar to be prohibited by utilities or HOA's than it is for them to be mandated. With this in mind, if you're on the side of property rights you might be more concerned with the many places that still have rules preventing individuals from doing what they want with their roof and making that investment if they want.

Even if your HOA allows solar, I would respectfully argue that your immediate neighborhood is not big enough to give insight into an actual market. Zoom out to an area large enough to support business competition such as Maryland statewide and the data tells us the market has dramatically increased solar capacity by an average of 95% year over year for the last 17 years running, including 20,000% growth from 2006-2011. That kind of growth, a market that literally doubles or triples itself every year, signifies a high demand market in my book. Many of those 10 of the 20 richest counties in America you speak of are over the border in Virginia, where solar is expected to triple in capacity in the next 5 years https://www.usnews.com/news/best-states/virginia/a.... You can't tell me you're not in a high demand market for solar, or that consumers don't want it when the market is booming, excluding your small neighborhood apparently, which I'd be curious to know if your HOA actually prevents it. 

Do you have any data supporting solar reducing property value? That would go in the face of an often referenced study the appraisal institute conducted by tracking actual sales data from which they calculated that homes with solar sell for an average premium of $15k. https://www.nytimes.com/2015/02/22/realestate/sola...

Think about it: assuming house A and house B are identical other than one has solar and one does not (and you can't even see the solar because the panels are black and blend in to the roof), if house A has $2k/yr. electric bill, and house B has $0/yr. electric bill plus earns the owner $200/yr. selling SREC's back to the utility, you're telling me you'd pick house A? Most people would pick the house that makes money over the house that costs money. 

$10-11/month savings doesn't sound like a lot but when you calculate the IRR over 10 years including conservative rate increases the return is 10.3%.(https://solarpowerrocks.com/maryland/). In my book that's a great return for a zero risk investment that cost $0 out of pocket thanks to the low interest $0 down loan. As a real estate investor I love any time I can make an investment with 100% other peoples money, and profit $15k over 20years plus add an instant $15k value in my home, with $0 DOWN. Mind you these are Maryland numbers, CA numbers are much better, Maryland is a good market but it's ranked 13th in the country. You can say it's not a lot of money but for some people it is and it's money they wouldn't have otherwise had, which plenty of people like. 

You state you're not for or against solar, so I wonder why you are making negative comments about solar that I don't believe can be supported with data such as consumers don't want it, solar reduces property values, or that it's not cost effective. In my experience it is actually a product that many people want, which has been proven to raise home value and is often cashflow positive day one with no out of pocket cost. The alternative (not going solar and continuing to pay your utility bill) provides nothing but a negative return. Makes sense to me and a lot of other people. Rich people mostly actually, historically, but even that's changing now. Thanks to reduced pricing and new financing options the market is finally opening up to people who aren't rich, but up until now solar has been a rich persons item so it's odd to hear you and @BJ Dante claim rich people don't want it or don't buy it, it's simply not true, trust me I would know I've been selling tons of solar to mostly rich people for 15 years. I've sat in some of the richest people out there's living rooms and after 5 minutes of looking into it they cut me a check, to them it's a no brainer. 

You stated you don't think the savings are enough to move the needle but fact is, the needle is moving! The solar industry is growing 17 times faster than the US economy:

http://money.cnn.com/2017/05/24/news/economy/solar.... 

@BJ Dante

Russell, There are certainly a few outliers but in general solar does make economic sense in Maryland. This may not have been the case the last time you looked into it but it has been the case increasingly over the last several years as Maryland has passed tons of legislation favoring solar. A recent bill was passed that makes it even better. Maryland just committed to 50% renewables by 2030 and 14.5% of that is expected to come from solar, which is already causing an uptick in solar installs. https://pv-magazine-usa.com/2018/02/14/maryland-bi...

Maryland homeowners who financed or leased solar systems saved an average of $131/yr. in 2017 compared to those without solar and solar owners offset an average of $1,722 worth of electricity.  Average payback period for a purchased system in 2017 was 8 years (https://www.energysage.com/solar-panels/solar-pane...). 

Maryland has a $1,000 grant, an SREC program where solar customers receive about $140/year for their renewable energy credits, a favorable net metering program, plus state and federal tax credits. https://www.energysage.com/solar-panels/solar-reba...

Regarding your guess that 30-50% of homes with solar have the panels removed during a sale: If you have seen or heard of solar panels being removed it is likely they are old 4'x10' tilted up solar thermal panels, rare relics which heat hot water or glycol. Those have almost all been removed and the few remaining will be removed, however when people refer to solar panels in 2018 they are almost always referring to solar electric panels/ photovoltaics/ PV. PV panels can not be removed during the sale of a home without violating the 20 year net metering agreement with the utility so the number of modern solar panels being removed during a sale is 0. Why would someone remove them even if they could? Who doesn't like reduced operating costs? Solar is a selling point. The national appraisal institute has proven this fact based on sales data (This study by the appraisal institute shows that homes with solar sell at a premium and in a reduced time period compared to homes without, and it actually includes Maryland data) https://www.appraisalinstitute.org/solar-energy-sy...

As a realtor you should like solar, if the house is worth more and sells faster, your job is easier and commission higher. Just beware of leased systems as the transfer of the lease agreement can add an additional step in the sales process due to the buyer needing to assume the lease or the seller needing to buy out the lease. Many realtors have learned how to get in front of the situation and help manage that process to make it easier for both parties in order to streamline the sale. 

You are correct that not every home is suitable for solar. Good solar design requires large south, east or west roof surfaces where a nice clean array can be laid out. Dormers, shade, vent pipes, etc. create obstacles. I would not recommend onsite solar if the array(s) detract from the aesthetics of the home. I like clean rectangles. I believe the resale value is more likely to be effected positively if the array looks good, but ultimately it's up to the homeowner/buyer if they think it looks good or if they care about that or not. 

However you don't even need a roof to go solar in 2018. Many states such as Maryland and California have community solar arrays where you can purchase solar panels that are miles away from the home but still power that home using remote metering. The California mandate makes design allowances for roofs that prohibit onsite solar, and offsite solar can be tapped using remote net metering in cases when the roof orientation is not suitable or the homeowner prefers not to have rooftop solar, so the CA mandate doesn't actually force anyone to install solar on their roof.

I agree with you and others here that solar should be a choice, as a solar advocate I worry that ramming it down people's throats or at the very least having the optics of doing that could cause a negative backlash. The California mandate will boost the solar industry but there's a risk that other energy commissions across the country could react by punishing solar in those markets. Time will tell, but in general the solar industry is booming worldwide and all indications point towards continued rapid growth, with a few inevitable hiccups along the way.

Here's a link to some general info on solar in Maryland: https://solarpowerrocks.com/maryland/

@Account Closed That would depend on the specific lease contract. I don't sell leased systems but the contracts I have seen specify what the buyout price will be at various times throughout the contract term. There are various leasing products including prepaid leases. Yes it could be a deterrent to a buyer, I know a few realtors who have had deals fall through due to buyers not wanting to assume the lease, although I think that's rare. Yes I believe the buyer has to qualify with the leasing company to assume the lease however the credit spectrum is pretty big considering the buyer would have an electricity bill anyway, it's not adding a new bill it's replacing one bill with another lower one. Personally I wouldn't want to assume a lease, I would prefer to own the system. Leases were more common a few years ago before other financing options were available but now that low interest financing is available loans have become much more common. Loans are paid off during a sale of the home, they don't transfer to the buyer. 

@John Woodrich

@John Woodrich correct, it's recommended to replace your roof before adding solar if the roof is expected to be in need of replacement in the next few years. One thing about this you may find interesting and/or be able to provide clarification on is whether or not the 30% tax credit may also apply to the cost or a portion of the cost of a new roof. Disclaimer: I'm a solar professional not a tax professional, I can not give tax advice and any info you read here is simply info on how someone might act. Anyone reading this should do their own research or speak to a tax professional before making a decision on how to file their own taxes. Here is an excerpt from the instructions for Form 5695 (the form you would need to fill out to claim the tax credit) which pertains to included costs:

What it looks like that sentence is saying to me is: a roof that is built to be able to hold a solar array counts as a structural component, and therefore counts as a cost of the project. For ground mounted systems any racking, concrete footers, earthwork and trenching etc. is included so a new roof may fall into that same category of associated expense. I have had tax professionals tell me they believe the roof or at least the portion of the roof with the solar on it can be claimed. Once again anyone reading this should talk to a tax professional about this before making any personal decisions on how to file their taxes.  

Here's a link to form 5695:

https://www.irs.gov/pub/irs-pdf/f5695.pdf

https://www.irs.gov/forms-pubs/about-form-5695-res...

Here is some more info on the mandate: 

Takes effect in 2020.

Applies to new homes and MF buildings of 3 stories and fewer.

Also applies to major remodels.

Approved by CA Energy Commission 5 votes for, 0 against.

Includes new insulation, lighting and air filter requirements.

Includes design flexibility for buildings unsuitable for solar.

Solar panels do not have to be on the roof, builders can build a central community solar array nearby to offset newly constructed buildings unsuitable for solar or share of remote community solar arrays can be purchased to virtually offset consumption.

New home building industry associations support the bill. They are putting solar on majority of new homes anyway.

Arguments for:

Reduction in green house gasses

Improves home owner’s cash flow position by lowering energy bills n average of ~$80/month

Arguments against:

Raises housing prices by average of $9500 in already expensive place to live (expected to raise mortgage payments by ~$40/month on average)

Raises barrier to entry for home ownership, harming low income families

Info from the California Energy Commission Website:

http://www.energy.ca.gov/releases/2018_releases/20...

FAQ’s:

http://www.energy.ca.gov/title24/2019standards/doc...

Infographic:

http://www.energy.ca.gov/title24/2019standards/doc...

@Will G. not in my experience

@Autumn Gernhardt Solar panel prices have come down significantly over the past several years due to China mass producing panels to meet demand. If you looked into it in 2014 you can expect current pricing to be significantly lower now than you were quoted then. Residential solar pricing dropped from about $4/watt average installed price in 2014 to around $3/watt today, so about a 25% drop. The $20k system quoted to you in 2014 is likely to cost around $15k now. The $9,500 estimate is an average on new construction installs, every system is slightly different. As you know from getting a quote each system is sized to match the roof space and usage history of the specific home. You should get an updated quote (get several, I recommend getting quotes from at least 3 installers), see for yourself if it makes sense for you with todays pricing. Financing the system with a $0 down low interest loan will likely save you money immediately because your loan payments are likely to be less than you're currently paying for electricity, plus adding solar will increase the resale value of your home. 

@BJ Dante

@Dan H. just to clarify not all inverters have standard 20 year warranty, some are still 10 but with those you can extend it to 20 because many utilities require a 20 year full warranty due to the net metering agreement being a 20 yr. contract. Micros are used instead of the central inverter, not in addition to so you’d have one or the other not both. They’re great for mitigating shade and come with individual panel monitoring so you can see individual panel production, track degradation more accurately, trouble shoot easier if necessary etc. Lots of changes since 2004! That’s cool you got in that early. I was an installer on the roof back then, and a carpenter too on the side because there wasn’t enough solar work to keep busy full time. We have much better roof attachment methods now and racking is much quicker to put together. It used to take us 3-4 days sometimes for a single standard residential system, now quick installers can bang out 3-4 in a day.