Does solar increase my home’s value?

We are asked, often, if solar increases (upon resale) the value of a home. The short answer is yes: There are myriad studies that quantify the increase in a home's value (presuming, of course, the solar system is owned versus leased; if leased, it could devalue the home). However, we posit that you should not assume solar will increase your home's value ... there are too many unknown unknowns, including market conditions when you sell and, most important, the value the buyer will place on solar.

Fortunately, there's an effective, easy to use, free tool that calculates the increase in a home's value with solar. Developed by Energy Sense Finance (and funded, in part, by the U.S. Department of Energy's SunShot Initiative), PV Value walks you through a series of questions to quantify the value of your existing solar system. Take a peek and let us know if you have any questions.

In addition, Energy Sense recently released the U.S. Solar Market Value Report. The intent was to help homeowners and other real estate professionals make an informed decision regarding how to value and whether to maintain (or remove) an existing solar system.

The report reveals that the mean value for an existing solar system in 2016 was $3.93/watt in California. (Interestingly, new solar systems, net of the 30% federal tax credit, cost ~$2.50 per watt.) The inflated value of a new versus old system amplifies the value of solar ... the future utility savings, even when discounted, significantly exceed the cost of a new system.

The report also addresses new versus older systems, and found that older solar systems do, in fact, retain their value. Specifically, a 12-year old solar system was found to retain 50 percent of the value of new systems installed in 2016. This means that, not only do homeowners with solar have the opportunity to save on monthly energy bills, they also have equity in the system itself, which retains significant value over time.

Again, take a few minutes, poke around, and feel free to contact us if you have questions. For home buyers, home sellers and real estate professionals, at a minimum this tool can help value existing solar systems and thereby determine whether it makes sense to install a new system.

Giving thanks, one solar panel at a time

We’ve had the fortune of helping several hundred property owners go solar. All told, more than 7,500 solar panels shine in our community via RepowerYolo’s guidance. To wit, thank you to property owners who have entrusted us and, thereby, are making the planet a better place, solar panel by panel.

We are occasionally asked, “What makes you tick?” (i.e., why do you do what you do?). Simply, what gets us up in the morning is the growing and aggregate environmental and financial impact of solar systems populated throughout our community. For kicks (and ticks), each solar panel, over its 25-year life, eliminates 7.5 metric tons of carbon dioxide, or the equivalent of:

And, each panel, over its warrantied life, generates ~$3,000 in PG&E savings.

Combined, the 7,500 solar panels composing RepowerYolo systems are projected to eliminate 56,250 metric tons of CO2 (or the equivalent of taking 12,000 cars off the road, switching 1.9 million incandescent bulbs to LEDs, or planting 1.5 million tree seedlings). And, our clients are projected to save $22.5 million in utility bills. 

That makes us proud and thankful. Gobble gobble to you and yours.

P.S. - Click here to check out the EPA's Greenhouse Gas Equivalencies Calculator ... terrific tool that has yet to be closeted by the Trump Administration!

Is there urgency to go solar? The times they are a-changin'

Over the past few years, we have stressed — STRESSED — to property owners that there is NO urgency to go solar. Here’s a blog post elaborating our perspective on the lack of urgency, and the importance of doing your homework, when evaluating solar.

To quote Bobby Dylan, the times they are a-changin’.

Retrospective

We posited there was no urgency to go solar based on the three-to-four year windows (until expiration) of the 30% federal tax credit and PG&E’s Net-Metering program. Furthermore, solar panel prices eased a bit over the past few years, while PG&E’s rates continued to inflate (22% in 2016; another 8.5% increase this year). The tax credit is locked in, PG&E’s net-metering is galvanized, and the economics of going solar are improving. Take your time, we counseled.

Contemporary perspective

Regardless of your partisanship, solar is in the political cross hairs. Drill baby drill. Climate change is a hoax. Coal is our future. Political chestnuts and hyperbole voiced to rouse the base, but defying logic and economics: Solar is the fastest growing industry in the U.S. (adding jobs at 20x the rate of the economy), and solar has created more jobs than any industry in the country over the past 4-5 years. Furthermore, it’s quite libertarian to enable property owners to create their own energy, hence the bi-partisan extension of the federal tax credit at the end of 2015.

Over the past few months, domestic politics and the macro economy have defied logic and contemporary history:

1. Demand for Tier 1 (investment-grade) solar panels has exploded in China and India, thus constraining supply in the United States (and thereby slighting increasing solar panel prices for the first time).

2. On Friday, the US International Trade Agency (ITC) ruled in favor of two US-based, now insolvent solar panel manufacturers, Suniva and Solar World, agreeing their businesses were harmed due to the supply of lower cost, internationally-manufactured solar panels. The companies are seeking a 40-cent per watt tariff and a floor price of 78 cents per watt on imported solar modules. (In today’s market, such taxes would increase the cost of solar panels by 50-65%, with no viable US-made alternative.) President Trump is expected to issue a final ruling by year’s end. In the interim, large-scale solar project developers are hoarding supply of solar panels, thus increasing the cost (demand > supply) of solar modules for the entire industry.

3. Daily, there are rumblings that a Republican-inspired tax or budget bill will axe the clean energy tax credit, thus dis-incentivizing those who want to transition to clean energy. (Fact: The oil and gas industry receives more than 10X the tax credits/incentives as the clean energy industry. Another fact: Facts don’t matter.)

What to do? We cannot control the macro economy, the president’s actions, or congressional politicking. Instead, we are controlling what we can by securing as many high-quality solar panels as possible, in wake of what’s going on. Prices may increase, tax credits may perish, but solar in PG&E territory will continue to generate attractive, risk-adjusted investment returns. Property owners will continue to transition away from carbon while insulating themselves against future electricity rate increases, most likely with a greater urgency now.

Dylan, circa 1963:

The line it is drawn

The curse it is cast

The slow one now

Will later be fast

As the present now

Will later be past

The order is rapidly fadin’

And the first one now will later be last

For the times they are a-changin’

Expanding your solar system to charge an electric vehicle

Increasingly — at least once each week — we are contacted by solar homeowners who recently purchased, or are contemplating buying, an electric vehicle (eV). To wit, they are interested in adding panels to their current solar system to cover fueling (charging!) their new eV.

The good news: Solar-charged electric vehicles are the least expensive form of four-wheel transportation, let alone the virtue of aborting fossil fuels. For RepowerYolo homeowners, the average cost to generate solar electricity on their rooftop is 8 cents per kilowatt hour (kWh). For every kWh of charge, eV owners garner ~4 miles of range. Hence, if you have an electric car that’s powered by sunshine, your cost to drive is ~2 cents per mile.

The challenge: While it’s technically (almost lego-esque) easy to add solar panels to a system, the process is, unfortunately, somewhat pricey. There are two scenarios:

1. Your current inverter has sufficient capacity to accommodate additional panels. If this is the case, then the challenge is locating and purchasing comparable (wattage) solar panels. Depending on the vintage of your current system, this could be simple, or it may be that you need to purchase used/refurbished panels.

2. Your current inverter cannot accommodate additional solar panels. Thereby — this is what I did when I added nine panels on my roof to charge my Leaf — you need to either add a second inverter or proceed with micro-inverters. Again, securing compatible panels is the next step.

In both scenarios, we are required to perform full design-engineering-permitting for your additional solar capacity. Though this is not complicated, it adds to the cost; it’s not simply lego-esque, snap-a-few-panels-in-and-go.

An additional caveat: Homeowners can only claim the 30% Federal tax credit once every five years. So, if you went solar in the past five years, you may want to wait until you re-qualify for the credit. 

Net-net, we’re happy to help. There’s no cost to receive an assessment of your current system, analysis of your historical net-energy use, modeling of your future electricity demand (for your eV), and an analysis + recommendations for your additional solar capacity. Feel free to contact us or swing my our workspace.

Evaluating solar options? The Model T days are over; four key considerations.

You've decided it's time to (re)-investigate installing solar. Your hesitancy may be logical: You do not need to go solar, and you’re unsure how to assess and assemble the pieces, let alone compare offerings. It can be puzzling. Your caution (and even procrastination) actually positions you well. The solar industry has improved dramatically from the Model T days.

Early car buyers had similar concerns: Do I buy internal combustion engine, electric, or steam? What starter makes sense? What about the brakes, or the dashboard, or the tire lifetime? Do I need a car? If so, who can I trust and will it work/be dependable?

Homeowners who went solar in the early days had to consider panel composition, wiring, inverter design, roof attachments, warranties, and even potential fire hazards. Fortunately, solar equipment is now similar to automotive offers from the early ‘80s. We no longer need to ask about where the engine was made, the engine compression, the electrical system, etc. For cars, we now shop for benefits and outcomes, and we have specific metrics to help gauge alternatives: fuel efficiency, acceleration (zero-to-60), safety test results, stopping distance plus all the new features and benefits available.

For solar, here's what matters most on the equipment front (i.e., questions you should engage and pose to your solar provider):

1. What is the likelihood the system will generate the annual energy forecasted? Thereby, can the solar company point to a significant group of local, monitored homes and compare forecast to actual generation? A simple metric to calculate system productivity: total annual electricity (kWh)/system size (kW-DC). For south-facing systems with no shade, this number should be about 1,500 kWh/kW. East- and west-facing systems produce ~8% less. (The likelihood of actually generating the energy promised falls dramatically as the actual productivity value increases above this threshold.) And, don’t get confused by panel efficiency: It simply reduces the area required for a system, and has a modest impact on the system’s production.
2. Does the equipment come from Tier-1, investment-grade suppliers? For solar panels: Canadian Solar, SunPower, LG and a handful of others qualify. For inverters: SMA, SolarEdge, and ABB.
3. What is the likelihood my product warranties will be valid? Amplifying the above point, the current and future financial stability of the manufacturer is imperative. A 25-year warranty is only as good as the company behind it; do your homework (or, better yet, press your solar provider to evidence the manufacturers’ solvency).
4. How do I know I’m getting a fair price? One way to standardize pricing for an apples-to-apples assessment: Divide system cost by the the system size (watts), so you have the cost per watt. The gross investment (pre-tax credit) for most home systems today should be $3.50 per watt or less for a Tier-1 system installed by a first-rate contractor.

Solar is transitioning from an art form to science. In so doing, your task is simplified as you endeavor to generate your own power. (And, solar, in our opinion, is the only investment in your home that generates a reliable return.)