All Forum Posts by: Steve K.

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.

@Dan H. with the invention of micro inverters which carry a minimum 20 year warranty many other inverter manufacturers have bumped up their warranty from 10 years when you bought in 2004 to 20-25 years today in order to stay competitive and also because it’s become cost effective for manufacturers to offer that long of a warranty because inverter related issues are very scarce these days as inverters have improved. 20-25 year bumper to bumper warranties and even lifetime warranties are common these days. Avg. price per watt installed in 2004 was $7.70, today it is hovering around $3 with the bottom around $2.50. Congrats on being an early adopter, your system is paid off and printing cash while others are still calculating their payback period. 

@John Woodrich yes I’ve been installing designing and selling solar for 15 years. I’ve done some work with Xcel in MN but only large utility scale systems, you guys are right that residential is borderline there and still in early adopter phase but that will change soon. In the early stages customers are environmentalists or engineers who like the technology or people with money to burn but today with leasing and financing and much lower pricing in many markets the solar customer is a much broader category. Leasing is not my favorite mechanism for solar and I can confirm what you’re saying regarding the transfer being a hiccup during a home sale. I wouldn’t want to assume a lease, I would make the seller pay it off, additionally leasing companies hold a lien (fixture filing) on the property so there’s that. But not everyone dislikes leasing, leases are transferable in many areas and plenty of people just see it as a lower bill than the electric bill would be without solar so it’s  still considered a selling point for some. But of course for strict resale value cash is king. Probably the most fiscally responsible move is to finance the system if you’re planning to live in the home a few years since interest rates are around 2.99%, you can keep your capital  invest it elsewhere and make more than 3% then pay off the system when you sell the house if the loan isn’t paid off already. Loans come in 5,10,15,20 year terms in order to create cash flow up front you can select the product that works for you. If your loan payment is less than your old electric bill was it’s a no brainer for people and there’s a lot of soft value as well, the environmental benefit for environs but also libertarians get the warm and tinglys of screwing the utility who usually screws the consumer. Sometimes it takes a few years to get positive cash flow but in places like California it’s easy to achieve day one. Financing is gaining market share on leasing, leasing was a popular model a few years ago but today financing is much more common. Cash purchases are exceedingly rare these days, few buyers ask me to calculate payback anymore which is why I find it odd when people get hung up on payback, it’s a throwback to five years ago for me which is an eternity in solar. Most new home construction in my area includes solar, it’s definitely recognized as not only a selling point but almost a necessity among home builders. They all at least offer it as an option.  

@Jim Adrian the payback period in California where the mandate will go into effect in 2020 is often less than seven years already and will be quicker in 2020 possibly half what it is today. It’s not 15 years in that market or any of the more established solar markets, it’s usually less than 10 and shrinking fast.