Getting your home appraised with PV Solar system – what info to give the appraiser

Solar PV valuation is a complex appraisal assignment. This article addresses only the very entry level topic of gathering the accurate characteristics of the system and how it is installed. Grow your business by taking a class to hone your skills on valuing these systems. Most appraisers find it takes more than a 4-hour class to learn the basics of valuing solar PV. You’ll find a Field Guide to Solar Energy on my website that will list resources useful to real estate professionals.

Info to give to the appraiser:

  • Ownership status – Is it leased? A Power Purchase Agreement? Owned, but financed with a Uniform Commercial Code (UCC) Filing? Is it owned with no financing?

If the system is leased, a power purchase agreement, or owned but financed with a UCC filing, the system is personal property and not a fixture or part of the real estate. Don’t forget to obtain the lease or power purchase agreement terms and analyze them to opine on the effect on the real estate value.

  • Size of System – The size of each array or grouping of panels must be identified. Simply counting the panels will not give the system size because panels vary in wattage.
  • Age of System – The age of the system is important because as the panels age, the energy production will decrease each year. The reduction is small, but it will affect the energy production over the life of the system.
  • Manufacturer of the panels – Just like any other product, quality panels have higher production than lesser quality panels. Searching the website of the manufacturer or installation paperwork will give you the quality rating and loss factor.
  • Tilt and Azimuth – Solar installers will survey the location of the solar system and try to install them for maximum production. That means the tilt or vertical angle of the panels and the Azimuth or compass direction the system faces are important factors in maximizing the efficiency of the system.
  • Inverter type and size – The inverter converts the direct current (DC) produced into alternating current (AC) used by our buildings and the grid. Some systems have micro inverters on the back of each panel that operate that panel only while other systems have a central inverter that converts all energy produced from DC power to AC power.

It is important to know the size in wattage of the inverter(s), age, manufacturer, and warranty term.  Most inverters will need to be replaced before the solar PV system warranty term.  You’ll need to consider replacing the inverter(s) within the cash flow analysis to valuing the system using the income approach.

  • Mount type – Are they fixed or tracking? Do the panels stay in one position or do they move with the sun?
  • Monitoring System – Is the system connected to a monitoring software that will provide production history, size, age, and graphics of each array? If so, this can be extremely valuable in collecting the characteristics identified here.

The best guide to gathering the details needed for valuing a solar system is the Appraisal Institute’s Residential or Commercial Green and Energy Efficient Addendum. One page has the list of characteristics needed to develop a cost or income approach to valuing the system. These inputs make using a software, PV Value® or Ei Value®, much smoother. PV Value® is used in the Appraisal Institute’s two-day course, “Residential and Commercial Valuation of Solar.”

read more at: https://www.appraisalbuzz.com/an-overview-of-solar-photovoltaic-systems-characteristics/

disclaimer: for information and entertainment purposes only

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