Q: What’s your opinion on solar panels installed on private residences? Do they add any real value? If so, how much and what is the appraisal based on without knowing my electric usage and savings? Solar companies are touting leases as the way to go, promising low payments and dramatically increased home values. If an appraiser drives by a home or looks at an out-of-date satellite photo to compare comps, that won’t tell the whole story. My home in Las Vegas, with no homeowner association dues, is ideal for solar, but I have doubts about the resale value with either a leased or a purchased system. Thank you.
—Tony A., Las Vegas
A: You’re not the only one asking such questions these days. Back in February, I answered a similar question from a reader who wanted to know how much resale value such solar power systems might add to a home.
As I said then, I applaud you for considering ways to save power and to improve your home. I think it’s great that more homeowners and homebuilders are “going green” and incorporating or adding solar energy systems to so many homes here in Southern Nevada, where we have an abundance of sunny days to help us generate clean, green power.
But, as you point out, that doesn’t necessarily mean that a solar energy system will add enough value to your home to cover the cost of installing it.
To help me answer these questions, I queried Debbie Huber, senior residential appraiser, of Huber Appraisal Inc.
She said: “Energy-saving solar systems, as with any amenity of a property, are only worth 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, 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. 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.”
Huber added that as solar power systems become more common, there will be increasing demand for them.
“The market will react accordingly,” she said, “and then we will see a more measurable value increase that will surpass what we see now.”
Huber said her comments are her own and don’t necessarily reflect the opinions of the Nevada Appraisal Commission, of which she’s a member.
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. Email questions to firstname.lastname@example.org. For more information, visit www.lasvegasrealtor.com.