Solar Panels on roofs
Marshfield, MA · Member since 2015 · 15 posts · 8 votes
Marc,
Many people don't know this but Massachusetts has consistently been ranked the #1 best state for PV solar. Yes, better than CA and AZ. Going into 2018 still ranks #2.
https://solarpowerrocks.com/2018-state-solar-power-rankings/
Factors include:
1) Overall Grade 2) Renewable Portfolio Standard 3) Solar Carve Out 4) Electricity Price 5) Net Metering 6) Interconnection 7) Solar Rebates 8) State Solar Tax Credits 9) Performance Payments 10) Sales Tax Exemption 11) Property Tax Exemption
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It's not all just about sun hours.. tax incentives, rebates, and local policies make just as much of an effect on solar viability. I have been very involved in the solar industry for about a decade now, and more recently bridging the space between solar and real estate. Here are my thoughts based on your questions:
Need a new roof? The 30% ITC Tax credit for solar ALSO includes your roof. The tax code clearly states the cost associated to a foundation for solar such as a roof will not fail to qualify here. In short you can be credited back dollar for dollar 30% of your solar AND roof cost against your tax liability. Definitely worth doing both together & wrapping them in the same financing. Also, Im not a tax professional and this is not tax advice, but your CPA should be able to claim you deprecation on your investment as well, gaining you even more tax benefit.
Solar panels provide cover from the elements to the shingles located below them, thus increasing shingle life. Most solar contractors these days hold 10 -25 year warrantys on their workmanship/penetrations. It's 2018... days of damaged roofs due to solar installs are long gone (unless you have a ceramic tile roof or something that easily breaks when stepped on)
You can easily reduce your power bill down to just the utility's basic charge, typically 5-10 bucks per month. And in states with high electricity costs, including Massachusetts, you should easily be able to have a loan payment that is less than your old power bill. Financially / Cashflow speaking, solar is a no brainer if you can make this happen. Plus once it's paid off, thats it, no more power bill.
Batteries are getting better, however for now I would only suggest them to very concerned "doomsday" folks or for the intent of reducing time-of-us utility charges. You can request from you solar contractor to have a grid-tied solar only system installed that is prepped (plug & play) for future battery implementation. There are some minor solar equipment differences, specifically with the inverter, if you intend to add batteries now or later
If a solar system is properly engineered, snow is a non-issue. Most solar engineering software accounts for average weather conditions for your zip when sizing the required system to offset your electric consumption. Ideally it would be designed to "over-produce" enough during sunny months to save up enough Net Metered kWh credits from your utility to get you through the less sunny months without an issue. The utility in MA has a great net metering program that allows you to bank your unused production without needing batteries.
For a 6-8kw system (this is a tad higher than average fyi), you should feel good in the range of $18k-$25k gross (remember you can get back 30% of that, plus the state incentive, plus any other local rebates/incentives). Basically it's like buying a brand new car at 40% off , except is saves you about the same amount of money that a car would costs you in gas. That makes this a great asset to own.
I do have some good relationships there in MA, let me know if you'd like me to get you in touch with a trusted contractor.
Hope this helps
I've been considering doing them on small MF where the utilities are not separated and the LL pays all. This would then decrease the utility cost, hopefully. But also where the tenants pay their own electric, if I give them a benefit of lower electric bill with a slight rent increase to offset it, would that be good? Like if now they pay an average of $50 in electric but I get panels and say I'll cover electric for an extra $25, that is a $25 decrease for them and possibly covers the added cost to me which over time gets paid off and an added benefit for new renters going forward. Anybody tried that and have any feedback?
I worked in residential solar sales and installation for 5 years. A few thoughts:
1. The old silver-frame, blue panel appearance is ugly. However, most installers now use what we call "black on black" panels which have a very sleek appearance. I think they look great if the installation is well done. See photos below.
2. Panels on the front of a house can be ugly, but it all depends on the style of the house and the layout that's chosen. If they're on the back or a side that's not so visible, it really doesn't matter.
3. To install them, you do drill right through the asphalt shingles, but any reputable installer also installs high quality metal flashing over every penetration to prevent leaking. They don't just caulk the holes. You won't have issues with leaks if they're properly installed.
4. The ROI can be very attractive if you live in an area with good production or high power costs. I have a rental with solar, and I charge the tenants a fixed amount of $100/month for electric (I pay the electric bill which is about $15/month). Also remember you can also depreciate the cost of the system as well for added tax bonus (accelerated deprecation).
@JD Martin - Hello Sir,
As one of the knowledgeable Solar Guys on this thread, I would say that watching the DIY stuff on youtube and other places may not be the best way to get a feel for installation practices. Most professional installers use a process that creates 3 separate sealing measures. On a composition shingle roof, you would have a flashing that is integrated into your shingles (like the roof vents you have now) below the flashing (or integrated into the flashing) is a mechanical base that connects to the structural members of your home (rafters) or the deck (plywood), dependent on the racking manufacturer. The mechanical base is typically lag bolted to the structure at some odd ft/lbs of torque creating a second mechanical barrier (the base and the lag bolt. The pilot holes for the lag bolts are typically 1/16-1/8 of an inch smaller than the diameter of the lag bolt making the mechanical base act as a sub flashing, and then there is also a chemical sealant (caulking, geo-cell, Henry's... depending on the installer) sandwiched between the roof decking/paper and the mechanical base. If an installer cant explain this to you sufficiently, shop somewhere else.
As for the home value, I would agree that an additional 100k for solar alone is highly unlikely/ nigh impossible. In my experience an average system 4-8kw will raise a home value 12-16k, as long as quality equipment and a capable installer were used. This is just my anecdotal experience
Feedback from Austin, TX, where the local utility company, Austin Energy, gives a 0.5 USD subsidy per KWh. :
I invested in to my own installation last year in June.
It felt like the new gold rush.
There are TONS of companies on the market because of the 30% tax incentives + subsidies.
They show you nice graphs with high IRR (min 10%) with inflated estimated power output and are making crazy margins thanks to the subsidies from the local utilities.
Make sure to challenge their assumptions and have them compete against each other to get the best price as possible. Use http://pvwatts.nrel.gov/pvwatts.php to estimate how many KWh you can produce based on your location and compare that to their business plan.
I ended up paying 3.05 USD per watt before the 30% tax and local incentives for a 4.16 KWh system. First quotes were at 4.00 USD.
The final net cost after all the incentives is 1.7 USD / watt and based on the first 9 months I expect a yearly yield of ~8%.
Still an ok investment and at least I am now a bit greener than before !
Nationwide study of the premium for homes with solar back in 2014. Obviously since then value has only shifted further in favor of solar pv, not to mention solar pv cost continuing to decrease. What I got from it was that homes with solar sold faster and would sell for between $3 and $5 per watt of installed solar pv capacity more than homes without, depending on what states and other factors, etc etc. In theory this would basically mean you would get your initial investment back when you sell plus whatever tax incentives you received. That's in addition to whatever savings you racked up during your solar experience.
Anywhoooo, here it is
http://eta-publications.lbl.gov/sites/default/files/lbnl-6942e.pdf
Great answers and discussion here. On the appraisal side, Fannie Mae has an appraisal specific for solar systems - in short the system value will be appraised as part of the home value. The big IF on that is that it is specific to owned systems (sash purchase/zero down financed) and not to leased systems.
From the NAR sites and discussions I have seen an estimated value increase of 2.5% to as much as 15%. It depends of course on the underlying power prices and the savings or lack thereof being generated as a cost of ownership proposition. Solar is very much different region by region and even by City.
In the DC area they devalue your property. Consult with a knowledgelable agent in your market to see if they have a positive or negative affect on your property value. Ive run into a number of sellers who are very surprised to find their homes sell for $25k less, which is much more significant than the $50 s month they were saving.
I'd imagine this is regarding leased panels or a PPA solar program, these are designed to make the solar company lots of money. It's important to keep these separate from purchased/owned solar system scenarios, however mistakenly merge these together in their head as the same product, and it's not. Outright owned panels add value.
In the DC area they reduce the value of the property whether they are leased or owned. The adjustment is more for leased, but even owned outright they signifigantly impact the value if the property downward.
We have very low utility costs in the midatlantic. The DC area has the highest incomes in the country. People care much more about the aesthetics of their property than saving a marginal amount of money on their already small electric bill.
With all due respect. Interesting opinion Mr. Brazil. I will tell you, my system increased the value of my $500k value home by almost 100k according to the appraisal I received.
Maybe I am the exception to the rule.
LOL. What you are is relying on a single persons opinion. Anyone in REI ought to understand markets enough to know an appraised value is a subjective tool, not a fact carved in stone.
Solar is still too-new of a technology. It is far from being accepted or demanded in markets, at least nationally. Hence, no one can make a defensible claim that all markets react to solar one way or the other. Solar is what appraisers call value in use, unless the appraiser is drinking too much kool-aid, or developing an appraisal of cost, not market value. That said, there may be a market or two, here and there, where solar is actually a thing that can be measured on a market scale, rather than an individual scale. Salespeople of solar have no idea what they are talking about when it comes to this stuff (valuation) and its nothing more than a sales pitch. Does solar work for you? Go for it. You might get more when you sell, you might get less, you might get the same - no one can say with any degree of certainty one way or the other.
It was the same thing with AC when it hit the scene all those years ago.
I think they're ugly. Then again, I had my roof replaced recently which got me looking at my roof and noticing every little imperfection. When I questioned my roofer about it, he said to stop looking at it!!! Thing is, he was right. It brings up an off-topic and interesting question which is "what do you consider when judging curb appeal?" New roof? Nice paint job? Landscaping? Home design? I think it is likely we all look at different things.
In the DC area they devalue your property. Consult with a knowledgelable agent in your market to see if they have a positive or negative affect on your property value. Ive run into a number of sellers who are very surprised to find their homes sell for $25k less, which is much more significant than the $50 s month they were saving.
I'd imagine this is regarding leased panels or a PPA solar program, these are designed to make the solar company lots of money. It's important to keep these separate from purchased/owned solar system scenarios, however mistakenly merge these together in their head as the same product, and it's not. Outright owned panels add value.
In the DC area they reduce the value of the property whether they are leased or owned. The adjustment is more for leased, but even owned outright they signifigantly impact the value if the property downward.
We have very low utility costs in the midatlantic. The DC area has the highest incomes in the country. People care much more about the aesthetics of their property than saving a marginal amount of money on their already small electric bill.
With all due respect. Interesting opinion Mr. Brazil. I will tell you, my system increased the value of my $500k value home by almost 100k according to the appraisal I received.
Maybe I am the exception to the rule.
LOL. What you are is relying on a single persons opinion. Anyone in REI ought to understand markets enough to know an appraised value is a subjective tool, not a fact carved in stone.
As you said how can we rely on a single persons opinion. The appraiser appraised it the way he did. None of it is real anyway. It is all subjective. All REI folks should realize until the check cashes the profits or losses are not real.
Fannie Mae’s HomeStyle Energy Program is a mortgage option that allows borrowers to finance clean energy upgrades equal to up to 15 percent of the as-completed appraised value of the home. Solar PV is also an option, along with energy- and water-efficiency retrofits. It is available for single-family homes and multifamily homes of up to four units.
If I know my roof will need replacing within say 15 years old...how much would solar panels add to the cost if they have to be removed and then put back on the new roof? Or do they extend the life of the roof long enough to make up for that additional cost? Or will it be a completely different technology by then, so you wouldn't put them back anyway?
If I know my roof will need replacing within say 15 years old...how much would solar panels add to the cost if they have to be removed and then put back on the new roof? Or do they extend the life of the roof long enough to make up for that additional cost? Or will it be a completely different technology by then, so you wouldn't put them back anyway?
A reputable solar company will either not charge, or will charge a nominal amount to lift and replace the system to allow the roof to be repaired/replaced. As far as technology goes, it shouldn't matter as the panels you put on now should produce for decades. There would be no advantage to replacing that system - again that is provided you get production-warrantied panels at the outset.
If I know my roof will need replacing within say 15 years old...how much would solar panels add to the cost if they have to be removed and then put back on the new roof? Or do they extend the life of the roof long enough to make up for that additional cost? Or will it be a completely different technology by then, so you wouldn't put them back anyway?
Hey Pearce, a few thoughts for you (I've been in the solar installation industry for about 4 years).
Make sure you put that question to any installer you are considering. Quotes for removing and reinstalling panels can vary substantially (from a few hundred dollars, to several thousand). Also make sure that whatever price they quote you, that you get it in writing in your final contract.
The technology is unlikely to change that substantially in 15 years, and panels typically have a 25 year warranty. You would likely want to keep them on your roof.
Happy to field any further questions!