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Solar system may be green, but you probably won’t get all your green back

Q: I recently had a solar system installed on my home. I checked with two different companies before I bought.

One sales rep said the cost of the system would add that much value to the home. I asked the other sales rep about this statement and was told that would depend on the buyer.

Do you have any thoughts on how much value a solar system can add to a home?

Side note: Since I’ve gotten the system up and running (early November) I am making more electricity than I am using. Thanks for any information you may have.

— David H., Las Vegas

A: First, I commend you for going green. It’s amazing to hear that your solar-powered home can make more electric power than you use.

To help me answer your question about the return on your investment — and how much green you may get back from going green — I enlisted the help of longtime local appraiser Debbie Huber, SRA, of Huber Appraisal Inc.

Here’s her answer:

“Energy-saving solar systems, as with any amenity of a property, are worth only what a buyer is willing to pay for them. Having appraised these types of homes, there is never one answer for this question.

“We have seen them contribute to the value of the property. But it has been my experience that so far, it usually does not cover the expense of putting one in right off the bat.”

This is similar to how swimming pools are typically valued, she said.

“The savings on energy costs is what will add up to cover the cost of installation,” she said, “so the longer the homeowner is able to utilize the system, logically, the more return there will be on the cost. Such systems don’t automatically add a set value to a home because the perceived value of these items varies greatly from individual to individual.

“Also, energy-saving systems come in a wide range of quality and efficiency, further complicating this matter. The more sophisticated the system, the more likely it will contribute to market value,” she added. “When we have been able to measure a value difference by analyzing the market specific to a particular home, the value difference is typically based on a small percentage difference in sale prices, not a set dollar amount.

“It’s important to keep in mind that with any amenity, value is in the mind of the typical buyer and the typical homeowner.”

In this case, Huber concluded, you seem to appreciate your solar-power system, how it saves you money on energy costs and how it helps you be “a better steward of our planet.”

I’d say that is reward enough for some people, which is why I see more such energy-saving features being added and built into homes here and nationwide.

Huber added, “I believe as they become more common, there will be increasing demand for these types of systems. The market will react accordingly, and then we will see a more measurable value increase that will surpass what we see now.”

Huber also asked me to share a disclaimer: “I should disclose that, as a current member of the Nevada Appraisal Commission, my comments are my personal opinions and do not necessarily reflect the opinions of the Nevada Appraisal Commission,” she said.

So noted, and thanks for the help.

Send real estate questions to ask@glvar.org.

Heidi Kasama is the 2014 president of the Greater Las Vegas Association of Realtors, and has been a local Realtor for more than 11 years. GLVAR has more than 11,000 members. For more information, visit www.lasvegasrealtor.com.

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