Scientists at Sandia National Laboratories, in partnership with Jamie Johnson of Solar Power Electric™, have developed PV Value™ - an electronic form to standardize appraisals of homes and businesses outfitted with photovoltaic (PV) installations.
Funded by the DOE’s Office of Energy Efficiency and Renewable Energy, the tool will provide appraisers, real estate agents, and mortgage underwriters with more accurate values for PV systems.
“Previous methods for appraising PV installations on new or existing construction have been challenging because they were not using standard appraisal practices,” said Geoff Klise, the Sandia researcher who co-developed the tool. “Typically, appraisers develop the value of a property improvement based on comparable properties with similar improvements as well as prevailing market conditions. If there aren’t PV systems nearby, there is no way to make an improvement comparison. When a PV system is undervalued or not valued at all, it essentially ignores the value of the electricity being produced and the potential savings over the lifetime of the system. By developing a standard methodology for appraisers when comparables are not available, homeowners will have more incentive to install PV systems, even if they consider moving a few years after system installation.”
The tool uses an Excel spreadsheet, tied to real-time lending information and market fluctuations, to determine the worth of a PV system. An appraiser enters such variables as the ZIP code where the system is located, the system size in watts, the derate factor – which takes into account shading and other factors that affect a system’s output – tracking, tilt and azimuth, along with a few other factors, and the spreadsheet returns the value of the system as a function of a pre-determined risk spread. The solar resource calculation in the spreadsheet is based on the PVWatts™ simulator developed by the National Renewable Energy Laboratory, which allows the spreadsheet to value a PV system anywhere in the U.S.