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September 2018

Properties with Solar Panels Have Other Energy Features, Survey Finds

More than half of real estate appraisers say they have found that properties with solar panels also have energy-efficient upgrades or are built to a high-energy efficiency standard, such as Energy Star or LEED, according to a joint Appraisal Institute, Lawrence Berkeley National Laboratory and Sandia National Laboratory survey, AI announced Aug. 15. 
A total of 56 percent of appraisers surveyed said they found that to be true. Another 32 percent said they did not, and the other 12 percent of those surveyed responded “unknown” or “not applicable.”
More than three-fourths of respondents said the presence of a photovoltaic (sometimes called PV, or solar) system had no impact on the time it took for a property sale to close. Five percent said it always extended a property’s time on market, while another 3 percent said it always shortened the time for a property to sell.
The survey also found that 57 percent of appraisers said finding information about a PV system (such as its size, age, ownership or energy output) was somewhat or very easy. Also, 41 percent said doing so was somewhat or very difficult, and the remainder (2 percent) did not have an opinion.
Additionally, 84 percent of appraisers surveyed said the income approach typically has the most
weight in developing an opinion of value for a commercial property with a solar system. Another 14 percent said the cost approach, and the rest said the sales comparison approach.
More than one-fourth of respondents said they always evaluate the PV system’s maintenance records when developing an opinion of value. Nearly one-fourth said they sometimes do so, more than one-fifth said they never do, and the remainder (27 percent) believed the question did not apply to them. Of those who do evaluate these records, the majority replied that they have little to no influence on the degree to which the PV system is valued. Instead, respondents replied that market demand, underperformance and rooftop penetration were the main drivers of reduction in PV system value.   
A total of 43 percent of those surveyed said they always factor in renewable energy credit income realized by the property. Another 19 percent said they sometimes do so, and 16 percent said they never do. 
Nearly 85 percent said the solar systems they encountered were roof-mounted. Another 8 percent said most systems they found were ground mounted.
The survey, conducted in April and May 2018, targeted individuals who hold the MAI designation of the Appraisal Institute, as well as Candidates for General Designation, who have taken at least one of the courses in the AI Valuation of Sustainable Buildings Professional Development Program. The survey produced 44 responses. While the survey lacks substantial statistical significance, it does provide directional information regarding the valuation of properties with solar power systems.
See the survey results.
The Lawrence Berkeley National Laboratory portion of the work was funded by the Solar Energy Technologies Office of the U.S. Department of Energy under contract number DE-AC02-05CH11231. Sandia National Laboratory is a multi-mission laboratory managed and operated by National Technology and Engineering Solutions of Sandia LLC, a wholly owned subsidiary of Honeywell International Inc. for the U.S. Department of Energy’s National Nuclear Security Administration under contract DE-NA0003525.

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