beyond zero: solar value
TRANSCRIPT
Jeff Bricmont
Sr. Loan Consultant – GoGreen Lending™ CGBP – Build it Green USGBC
EEM Specialist 203k Certification
VGT Board
Valley Green Building Education Conference CSUN, June 7, 2012
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For Sale
High Performance Home Traditional Home
Hidden Treasure
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Seller
Broker
Construction lending/investment is “special”
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Seller
Agent
Buyer agent
Appraiser Banker Loan
Underwriter
Chief Credit
Officer
Government
Examiner
Appraiser Journal, 1998* Net Annual Cost Savings Multiplier $20/$1 of utility savings/first year
Appraisal
Management Firm
Appraisal
Reviewer
Cost Savings Multiplier
*“Evidence of Rational Market Valuations for Home Energy Efficiency” by Rick Nevin, Gregory Watson, Appraisal Journal, Oct. 1998
“Where’s the proof?”
Cost vs. Value Report 2011-2012
Pacific Region Cost Resale Value Recouped Region
Recouped National
Minor Kitchen Remodel $20,947 $19,165 91.5% 72.1%
Bath Remodel $19,204 $14,431 75.1% 62.2%
Window Replmt -vinyl $13,504 $10,995 81.4% 68.0%
Home Office Remodel $31,239 $15,777 50.5% 42.9%
Garage Door $1,732 $1,531 88.4% 71.9%
© Hanley Wood LLC Remodeling 2011-2012 Cost vs. Value Report www.costvsvalue.com
Market Data
Location New Home Existing Period Certification
Portland MLS: price 8% increase 30% increase 5/10-4/11 ES, LEED, E Advtge
Garbett Homes
UT ID WY MO $14k increase current HERS - 60% savings
Atlanta 2009-2010
Sale Price/List % 3.4% higher ES, LEED, E Craft
Days on Market 21% faster (97vs 123 days)
LBL - Solar Sales
CA Solar Homes $2.30-2.60/W $5.50/W 2000-2009
KB Homes - CA 30% faster
2 Unit Condo Purchase
Appraisal Process
Lender Defines Scope of Work: market comps formula conform to secondary market
Appraisal Management Company Appraiser: fixed fee and delivery schedule
High Performance Home Considerations Income approach Debt reduction Sales Premium
APPRAISAL INSTITUTE - 2011 Template for High Performance Home
Energy Features * Green Features
Location /Site * Solar PV * Incentives
New or Existing Properties
Common Vocabulary for Stakeholders
Residential Green & Energy
Efficient Addendum
Residential Green & Energy
Efficient Addendum
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GA Green Features
http://www.appraisalinstitute.org/education/green_energy_addendum.aspx
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Certification
s
GA Solar
PV Value ™
Geoff T Klise -Sandia National Laboratories
Jamie Johnson – Solar Power Electric ™
PV Value™ 1.0 launched Jan 2012
Commercial Launch Sept 2012
**************** Excel tool to determine value of new & existing PV Income Capitalization Approach Residential & Commercial Properties GA Solar Data Inputs Directly into PV Value ™ v. 1.0 NREL PV Watt - national inputs energy.sandia.gov/?page_id=8047
LBL Study
PV Value ™
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LBL Study: PV Effects on Home Sales Prices
“An Analysis of the Effects of Residential Photovoltaic Energy
Systems on Home Sales Prices in California”
By Ben Hoen, Ryan Wiser, Peter Cappers & Mark Thayer Lawrence Berkeley National Laboratory, April 2011
Timeframe: 2000 to 2009
Sample: 72,000 Home Sales in CA
Solar Homes: 2,000
Findings: [averages]
Cost Sale Price
New Home: $4.00/W $2.30-$2.60/W
Existing Home: $5.00/W $6.00/W
Avg. System Size: 3.1 kW
Sale Price Increase: 3,100W system = $17,000
Capitalization Formula
Study supports prior findings: Ratio of: Sales Price Premium Est. Annual Electricity Savings Equals: 14/1 to 22.1/1 average range Compare: Appraiser Journal: 1998 Multiplier Value increases $20/$1 of utility savings/first year
Case Study: West Hills
“Well informed or well advised”
Market Value: both buyers and sellers must be ‘well informed or well advised” regarding the ‘market value’ of a property. 12 Code of Fed Regs, Pt 34, Subpart C - Appraisals
Uniform Standards of Professional Appraisal Practice
Appraiser must be competent or may obtain competency to calculate a reasonable value or the appraiser can not accept the assignment.
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FHA: SOLAR ENERGY VALUE
If market data is not available to indicate any premium that might paid for a property with solar energy, the amount of increase shall be the lesser of the:
– Actual cost of the solar system installed in the subject house; or no more than
– 20 percent of the market value of the property without solar energy
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Valuation Detail
Appraiser made: • General calculation • Survey 4 mile radius – no comps • Consulted expert individual (not sales person) • Allowed 10% of PV cost $40,000 • Home Value increase: $4,000 ************* LBL Formula: 5,670W X $6/W = $34,020 PV Value ™ : $12,361 - $14,599 value range
Compare Values
High Performance Value Packet
1. Expand scope of work GREEA: Identify HP Items
2. Request Competent Appraiser Consider Income Approach
3. Document Value/Benefit Specs/Costs Benchmarks – Guidelines
Calculation: PV Value ™, HERS, LBNL Certification: Energy Star, BPI, Others
Jeff Bricmont GoGreen Lending™
Lighthouse Capital Group 626-676-9704
CA DRE # 01388821 [email protected] NLMS 246728
Sustainable Finance Getting Beyond Zero
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LINKS
Residential Addendum http://www.appraisalinstitute.org/education/green_ener
gy_addendum.aspx
PV Value (TM) http://energy.sandia.gov/?page_id=8047 LBS Solar Study http://eetd.lbl.gov/ea/emp/reports/lbnl-4476e.pdf Hanley Wood www.costvsvalue.com