Going Green in 92620>Question Details

Sa, Home Buyer in Seattle, WA

Solar panels - benefit or blight?

Asked by Sa, Seattle, WA Thu Mar 31, 2011

We live in a gated community in Irvine. Nobody has solar panels. The economics of adding panels look attractive. Would solar panels help or hurt the value of our home? We don't plan to move, but we have relocated twice due to job changes so we don't want an investment that would detract from the value of our house.

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Desmond Patao’s answer
FYI, solar panels can not save 70% off your electric bill if you calculate the cost of the panels. Typical paybacks are in the 5-10 year range assuming an efficient installation. Please do the math!
0 votes Thank Flag Link Thu Apr 18, 2013
Solar panels are typically one of the last things done on a home when it comes to energy efficiency. Your home needs to be tested and each project identified. Then you run the cost effectiveness of each project, rank them and do them in order of best to worst. Solar panels are typically at the bottom of that list.
You also need to identify the growth of your family and if you see electric vehicles in your future, you would definitely want to calculate that into you energy loads.
Value wise, typically the appraiser will add about $5,000 to the property value even if a lease. I don't recommend a lease because by 2020 when all the major price hikes have been implemented, the lease interests still keeps going up.
I'm BPI certified, done over 6 megawatts of audits and system designs with the largest Solar Company in the US and an Efficiency Sales Professional. You really should be consulting a professional that has the overall view and not just a company that wants to load your roof up!
0 votes Thank Flag Link Thu Apr 18, 2013
All very good feedback from all of the commentators... I seem to remember reading somewhere that some states had passed laws that HOA couldn't deny requests for solar - not sure if that's more of a municipal thing, a state thing, or even if it's enforceable. But it's worth looking in to.

I have solar on one of my homes and it's great - slashed my bills by 70% - I have a long time to pay back (15 yrs) because I installed in 2008.
0 votes Thank Flag Link Wed Jun 22, 2011
I really believe that it is a great investment. I worked with REC Solar at a convention and there is so many benefits for home owners. It just seems hard for many people to get solar panels because it's a big investment and you will save money but it takes a long time to balance out what you paid. If you decide to sell, I think most buyers would be thrilled with the solar panels already being installed and saving them money on their monthly bills and going green!!!
0 votes Thank Flag Link Thu Jun 9, 2011
Sa,

It's delicate subject, Each buyer is different and as i am sure you already know, not two people think alike, i have heard from lots of my customers they wish i could find them a property that was more energy efficient but on the other hand there are concerns such as future cost of maintenance, Solar system could save the home owner money but it could also cost them even more if repair is needed. its just like a house with a swimming pool, it adds value to the property but it also decreased the number of potential buyers because of the expense that comes with it.
0 votes Thank Flag Link Wed Jun 8, 2011
Solar panels and wind Generators are an excellent improvement to any home!
Nobody has them, well then be a trend setter!
Saving Electric bills is a very desirable extra for a home, Energy cost go up every month it seems so the savings overall are very attractive to buyers.
0 votes Thank Flag Link Mon Jun 6, 2011
Going green with solar panels at your Northwood, Irvine, home could be an excellent improvement and add value to your property.

I recommend you check with the contracting company and determine design, so that can be submitted to your HOA and its architectural control committee first.

Also find out about government tax credits possibly available, which might help reduce cost of this home improvement for you. Best wishes with your green home improvement.

Harrison K. Long, Realtor, GRI, broker associate, Coldwell Banker Residential Brokerage, Irvine, CA.
0 votes Thank Flag Link Fri Jun 3, 2011
Great question about the benefits of going green. Green home improvements add value. I recommend getting a few estimates and running some numbers because everything is situational. That way, you can gage for yourself how a potential home buyer might react to the cost saving and social responsibility of solar panels.
0 votes Thank Flag Link Tue May 24, 2011
It would help the value of your home but the real question is return on investment. When companies state their pay back in x # of years it is important to find out how they came up with that number. If you are looking at solar for hot water usage compare it to one of the new super high eff. hot water heaters or a tankless unit. Hiring an energy auditer can give you great ideas on what might be best for return on investment.
0 votes Thank Flag Link Thu Apr 7, 2011
Hi Sa,

I think in our area they are seen as a plus. I know they aren't beautiful...but many consumers have become quite "green" and as long as the financials make sense for your budget and the CC and Rs allow it...then do it.

Karen
0 votes Thank Flag Link Fri Apr 1, 2011
Responding both to your comment regarding the economics of solar panels and your question, let me first address the economic attractiveness of adding solar panels (whether for photovoltaics or solar hot water you do not say). First, satisfy yourself that the Seattle area has a sufficient number of sun-days that will utilize the capacity of the solar panels to produce the energy savings on which your assumption of economic attractiveness is based. If you can be made comfortable as to the kilowatts of power that your panels will produce, then you are correct that the economics of adding solar power capacity should prove attractive, particularly if you do not have to borrow to make panel installation possible. The advantage of not having to borrow is that the 30% Federal tax credit for residential solar installations is an absolute reduction in net investment when you have no debt service associated with the incremental solar investment. If you have to borrow, the savings from the tax credit, and any associated net present value or internal rate of return calculation, will be lessened materially by the fact that you will continue to have an incremental outlay for the life of the incremental mortgage pertaining to solar debt . Note also that the State of Washington may well have its own set of tax incentives for renewal energy systems which will be in addition to Federal tax incentives, all serving to reduce the payback period for your incremental energy saving investment. To learn more regarding state/local economic incentives check out the web site, http://www.dsireusa.org.

As to your question of how the visual presence of solar panels might affect the value of your home, my opinion as a builder of 39 years, who builds high performance homes, is that you will find the presence of rooftop solar panels to be a re-sale advantage. There should be no doubt that the homebuying public increasingly is coming to recognize and value the importance of energy savings. For that reason a home that possesses such a visual roof-mounted statement related to energy efficiency also accurately infers far less vulnerability to future energy costs than will exist for homes lacking their own renewable energy source. This is not to say that neighbors who may lack your resources or foresight to take advantage of the present tax credits and other incentives for solar installations will approve, whether by reason of envy or a different sense of aesthetics; but, a future prospective purchaser of the home you envision, one containing its own source of renewable energy, will reward your investment decision.
Steve Seawright, Managing Member, Seawright Homes LLC, Builder and Community Developer
0 votes Thank Flag Link Thu Mar 31, 2011
Going energy nutural adds a lot of value to your home. The green building assoication says that the average improvement in value is on average 12% higher when it comes to resale. So it make sense even if you don't plan on living in the house for a long period of time.

I am not a Realtor but I can tell you that homes with energy type improvements really do sell faster.
0 votes Thank Flag Link Thu Mar 31, 2011
We just installed solar panels at our house. Unlike one of the answers below, we figure we will realize the cost vs. benefit in 5yrs. There are lots of people with solar panels in our neighborhood, all the homes are different looking here in Rossmoor. You need to evaluate how long you'll own / live in your Irvine house. If chances are High that you'll be moving again in under 7yrs, it's probably not worth the cost.

I can refer you to the company we used, I don't have the number in front of me, feel free to email me directly & I'll dig it up for you.

EmilyKnell1@yahoo.com
562-430-3053 cell
Realtor Since 1996
Short Sale Expert
0 votes Thank Flag Link Thu Mar 31, 2011
Like with almost all if not all “green energy” sources of power, solar panels are not cost effective yet. The rate of return on solar panels is about 15 to 20 years unless one can obtain tax payer’s money in the form of rebates. Once one has solar panels they do require maintenance particularly cleaning and trimming of trees. Locations (Seattle) with many overcast days are of course not recommended for solar panels but Orange County will be ok.
0 votes Thank Flag Link Thu Mar 31, 2011
Unless your ELECTRIC bill is above $200/month and you have access to installer who give you a huge discount on installation; then SP hardly can pass an economic test for a 10yr cost study. Granted that SP efficiency has steadily improved during the last 10years. You may, at best, get maybe 25-40cents on a dollar return when selling the house.
0 votes Thank Flag Link Thu Mar 31, 2011
I have found that Orange County, in general, is pretty behind in embracing the "green" concept so far. Anytime you can save in energy costs, it is a plus for all (except for maybe SoCal Edison) . I'm not sure how large your home is in Irvine, but it can get pretty hot here and I bet you have a decent electric bill in the summer. If I had a choice to buy a home where I could have a low or zero cost electric bill each month, that would have an impact on the value of the home in my eyes. I know someone that specializes in this area and can give you an honest opinion of what your options would be and if going green would be in your best interest.
Send me an email if you would like more information.
0 votes Thank Flag Link Thu Mar 31, 2011
If your home owner's association has no restrictions on solar panels, they could add to your home's value and will certainly benefit you every month as you pay less in energy bills. However, they will take up to 10 years to recoup the initial cost. It all depends on how much you spend on energy bills now. Any good solar installer will meet with you first to calculate your use and savings over time.
There are currrently interesting programs where the cost of the photovoltaic panels can be worked in to a mortgage refinance. I encourage you to look into that.
0 votes Thank Flag Link Thu Mar 31, 2011
Do your homework on the cost benefit to the solar upgrades. I found that it wasn't going to really work out for me based on the time we will probably live in the home vs. the initial outlay. (I have a large home and the initial costs were going to be over $30,000) . The laws have changed and HOA's cannot prevent you from installing solar. Still check with your association as they may have recommended guidelines to follow when installing solar panels. Over all I love the solar concept and they are making panels smaller as technology improves. I think one day I'll have them but, the time isn't now. As far as impacting the value negatively to your home - doubt it. If the panels you install show a reduced energy bill - buyers are going to love it!

Cheers and good luck on your project.

Sandy
0 votes Thank Flag Link Thu Mar 31, 2011
I think they're basically neutral, value wise. It is the very rare buyer who would put energy benefits ahead of floor plan, finishes, location, et cetera. Or be deterred because of solar panels!

All the best,
0 votes Thank Flag Link Thu Mar 31, 2011
First check with your community to insure that there are no restrictions. When you meet with the solar sales people they should be able to give you a return on cost and how long that will take. You need sunlight and in WA you don't get that much.

More people are looking for ways to save money and the environment, if the savings is beneficial it may be worth it. I have heard it can take 10 years to recoup your investment.

Have an Amazing Day!
Web Reference: http://terrivellios.com
0 votes Thank Flag Link Thu Mar 31, 2011
Sa,
In a gated community there is likely a home owners association which would govern any major changes to the visible exterior of a home. I would start there and find out if this could even be approved before you invest any serious time or money into it.
Next, if they would permit the panels, I wouldn't count on resale but the payback you might receive during your stay in the home. For example, if the energy produced would return your investment in 3-5 years, it might make sense. If it's a 10 year period or more, with your stated history it might not make sense.
Part of gated communities’ attraction to many buyers is uniformity. If you are one of the few homes with these panels on the roof, it could actually hurt resale if the system is not more broadly accepted in the market by then. Tread carefully and don't believe all the hype from the salespeople.
0 votes Thank Flag Link Thu Mar 31, 2011
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