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Solar upgrades can help homeowners sell properties

2008-11-15 04:52:00
Author: BizWire

Fargo, ND - But one segment of the housing industry that continues to grow by banking on that idea is the residential solar-energy business.

Even in these tough financial times, real estate experts say homes with solar technology and other efficiency upgrades continue to appraise higher and attract buyers, and those buyers may even come with special financing set aside for high-efficiency homes.

As an added incentive, Minnesota-based Xcel Energy's Solar Rewards rebate program is one of the strongest in the country — for now. Rebates are expected to dry up in a year or two as solar energy installation becomes more mainstream. Xcel's commercial rebate program ends this year, along with the $2,000 federal energy-tax rebate.

Earlier this year, Melissa Thornton was faced with unloading a 5,300-square-foot home in an upscale Boulder County neighborhood riddled with competitive properties, foreclosures, short sales and a reputation for foundation-cracking clay soil. So she took a leap of faith and sank $15,000 into a solar system.

Within a month, her house was under contract.

"The only part of the economy that is growing right now is the green market," says Thornton, a real estate agent with special eco-broker certification that keeps her plugged into the latest green housing trends and technology.

Before selling her own big "American dream" house, the maintenance of which left her little time to spend with her family, Thornton "greened" the property in other ways, like upgrading the insulation, caulking electrical outlets, sealing the plumbing and buying Energy Star appliances. Along with the solar system, that made her home the first in the area to receive an official Energy Star rating, Thornton says. And that immediately attracted buyers.

The mother of three launched her "quest for sustainability" out of the feeling that society has gotten sidetracked by a quest for quantity over quality.

"Our priorities are on having all this stuff," she said. "I was bothered when I would take a client into new construction and they would fall in love with it because it looked so good, but it actually compromised so much."

Thornton's business model now includes setting aside a portion of her fee after selling a house to green that property. For instance, Thornton recently sold a home priced at $950,000, then gave back $6,000 of her commission to help the buyer fund green upgrades.

Her biggest piece of advice for anyone considering going solar is that they thoroughly research the system provider.

"There's a big difference between a certified solar company and a mom-and-pop company," Thornton says. If the system pays for itself in about a decade, "you want to make sure that the company is going to be around and they have the insurance" just in case something goes wrong before then.

According to Dave Dugdale, a Colorado Web designer and blogger known as "Solar Dave," a skilled do-it-yourselfer may be able to whittle the upfront cost of a solar system down to about $7,000.

Dugdale launched solardave.com to collect and share information and interviews about going solar. Dugdale was challenged because his roof was covered with shake wood shingles, which can't support solar panels. But after getting a new roof, Dugdale, whose background is in electrical engineering, plans to install the panels himself to keep costs down.

"Studies in the Netherlands have found that the systems pay themselves off environmentally in one-and-a-half to two years," Ley says. "After that, (homeowners) are giving the world clean, carbon-free energy."

Looking for a more concrete financial incentive? The Appraisal Institute, an appraiser's trade group based in Chicago, has estimated that every dollar cut from a home's annual energy bill can add $20 to the sale price of the house.

But Solar Dave says not all of the appraisers he has talked to buy into that idea. And it may take as many as 15 years for homeowners to recoup their solar investment in electricity savings.

Even so, Eric Bowman, regional manager of Akeena Solar, says "demand is extremely high." Solar power "absolutely differentiates the home" in a buyer's real estate market, he adds.

Standard Renewable Energy installed fewer than 100 systems in 2006. In 2007, Ley says the company installed about 1,300 systems. This year, the company is on track to surpass that number.

Social consciousness is a driving force behind the residential solar boom. After reading up on the international, environmental, political and social downsides of fossil-fuel production, Centennial mechanical engineer Gregory Damian felt strongly enough about installing solar panels on his house that he negotiated new rules with his community covenant. The community had banned the installation of solar panels on his 2,800 square foot house.

Since his system became operational in February, Damian has been paying about $25 a month for electricity.

"The only way this investment loses is if the price of energy goes down, which isn't likely," he says.

Around his neighborhood, Damian doesn't see a lack of money to invest in energy-efficiency home improvements. He sees a lack of will.

"For every Lexus that I see driving around," he says, "I see a solar system."

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