Published on February 25, 2009
Resale Value of Solar
TUCSON, Ariz. - Enough sunlight falls on the earth’s surface every hour to meet world energy demand for an entire year, according to the Solar Electric Light Fund, a nonprofit organization in Washington D.C., that brings solar power to rural villages in the developing world.

Solar power is better than other energy alternatives because it uses the natural, plentiful resource of the sun, pays for itself over time, and everyone has unlimited access to the sun, said Julie Junod, a spokeswoman for the Solar Electric Light Fund.

Given those advantages, is the investment in solar power viewed as a positive upon the sale of a home? The answer is, it all depends.

Resale Value

“You would think having solar panels is a real plus, but sadly it’s not,” said Janell Jellison, a real estate agent in Tucson. “People don’t want to maintain the system, and some buyers don’t want to use the system.”

Joette Schenck agrees.

Schenck is an EcoBroker®, a real estate agent specializing in green homes, in Southern Arizona.

She said that solar panels do add value because they cut down on energy costs and, in Tucson, the homeowner gets money back from the electric company. But that isn’t always a great selling point, she said.

“I have never had a buyer say ‘I want a house with solar,’” Schenck said. “It is not a necessity, and in this economy people are concerned with paying a lot of money for a non-necessity.”

Appraisals

Calculating the resale value is difficult and different for all appraisers.

Sean Scott, of Forsythe Appraisals, has‎ appraised a handful of solar homes and said it is always a difficult process.

“Solar panels are only worth what someone is willing to pay,” he said. “It depends on the home and the area.”

He said that solar panels may be worth up to $15,000 in a $400,000 home located near other energy-efficient homes. However, they may only be worth $3,000 to $5,000 on a home that sells for $150,000.

The lower the price of the house, the lower the value of the panels, he said.

“I would maybe price it at $2,000 to $3,000,” said J. Barrett Simmons, a home appraiser.

Simmons usually lists solar panels as a positive asset in case it is something people are looking for, though he said some people find the panels ugly.

For optimum performance, the panels need to face south at a 32-degree angle from the roof, said Cholla Nicoll, a representative of The Solar Store, which sells and installs solar panels. "If that’s is the front of the house, then we will try to hide them as best we can, but there is only so much we can do."

Appraiser Sean Scott relies on conventional wisdom. "The Rule of thumb is, in the current economy, only add additions and remodeling for yourself, not to increase the value of your home,” he said.


How the money works to purchase 3 kilowatt solar system


Initial investment:
$20,000-$25,000

TEP Incentive:
Subtract $9,000

Federal tax credit after TEP incentive:
Subtract $3,300-$4,800

AZ tax credit after TEP incentive:
Subtract $1,000

Total cost after rebates
$6,700-$10,200



Expenses

To power a house requires about a 3 kilowatt system, which is the equivalent of 15 solar panels. This would cost about $20,000 to $25,000, Nicoll said.

Tucson Electric Power also gives solar customers a cash incentive of $3 per watt, which is $9,000 for the 3 kilowatt system, Anderson said.

After the TEP incentive, there are two tax rebates the homeowner will receive after the installation. The Arizona tax credit is 25 percent of the cost up to $1,000. The federal tax credit is 30 percent of the total cost of the system, Anderson said.

After the initial investment a customer with a 3 kilowatt system will save about $45 per month, Nicoll said. At that rate it will take 12 to 19 years to break even on the solar system. However, some parts need to be replaced every five to 10 years at a cost of $500 to $1,000. This turns out to be a total cost of $1,000 to $4,000.

Any energy the panels produce that is not used by the residence gets routed to Tucson Electric Power to be used in other homes, said Blanka Anderson, a representative of TEP. The solar homeowner receives a credit and can use it as needed. Homeowners usually cash in their credit in the summer when air conditioning use is high, Anderson said.

Nicoll advises buyers to reconsider if the only reasons for buying solar are financial. The payoff isn’t going to be immediate and the main idea is thinking about the future, she said.

To some residents who invested in solar, money was not a factor.

“As human beings we have two choices: either continue to severely alter the natural environment to our peril, or we can live in harmony with nature,” said David Bachman-Williams, whose home is 95 percent solar-powered. “I chose the latter and I hope everyone else would as well.”

Mohyeddin Abdulaziz, director of information technology for the University of Arizona College of Law, agrees with Bachman-Williams.

“I feel as an individual I am responsible. I need to do something to help my family, friends, and the environment,” Abdulaziz said. “Not only do I save money on my bill, but the joy one gets from doing the right thing makes life much happier, and makes the world a better place for everyone,” he said.

Some Places that Sell Solar Panels Around Tucson

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