The Appraisal Institute this week announced its support for a new tool that will assist appraisers and others seeking to establish the value of a property’s solar-powered features. The spreadsheet was developed by Solar Power Electric and Sandia National Laboratories.
Finding a way to value residential and commercial properties with photovoltaic (PV) installations is a growing challenge facing the nation’s real estate industry. As more homes and businesses turn to solar power, the need grows for ways to develop reliable and credible opinions of value of the installations and the power they generate.
PV Value works within a Microsoft Excel spreadsheet to determine the value of a PV system. This is done using an income capitalization approach whereby the energy value is calculated over the lifetime of the PV module warranty. Inputs to PV Value include the zip code of the location, local utility rate and characteristics of the PV system. An appraisal range of value estimate is returned as a function of a pre-determined risk spread. This tool can be used to value a PV system at any location in the U.S. through its interface with the National Renewable Energy Laboratory’s PVWatts simulator.
The Appraisal Institute last September introduced its Residential Green and Energy Efficient Addendum, a form intended to help analyze values of energy-efficient home features. It is the first of its kind intended for appraisers’ use. AI’s addendum was designed to produce data that can be entered into the new solar spreadsheet.
The Appraisal Institute issued its form as an optional addendum to Fannie Mae Form 1004, the appraisal industry’s most widely used form for mortgage lending purposes. The Appraisal Institute’s addendum allows appraisers to identify and describe a home’s green features, from solar panels to energy-saving appliances.
Click here to see the new solar valuation spreadsheet from Solar Power Electric and Sandia National Laboratories.
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