ConstructionPro Week, Volume: Construction Advisor Today - Issue: 122 - 08/24/2011

California Unveils Solar Advantage Value Estimator

California energy officials have launched an online tool to help homeowners and other players in the state’s housing industry gauge the value of residential solar photovoltaic (PV) systems. It is a unique tool that could be adapted for use in other areas across the United States and abroad, a California Energy Commission (CEC) spokesperson told Green Building Insider (GBI).




CEC’s Solar Advantage Value Estimator (SAVE) calculates the value of a PV system on a new or existing solar home, including the estimated value in annual energy savings. The tool uses a homeowner’s unique address and zip code, the solar system size, specific climate zone data, and local electric-utility rates. Information is captured from existing solar rebate data, including CEC’s New Solar Homes Partnership (NSHP) and the Emerging Renewables Program. Once the three-step calculation is completed, a user receives a present value amount for his or her solar PV system. Real-estate professionals, appraisers, and builders can connect this information to potential homebuyers who may want to go solar or to homeowners who are selling their solar homes.


“This changes the perception of solar in the housing industry that benefits homeowners,” CEC Commissioner Carla Peterman said.


“California solar homes are essential to meet California’s New Solar Homes Partnership goals and renewable-energy mandates. Today’s changing real-estate market requires a credible method to determine a home’s value with solar, and this tool is an example of California’s leadership to develop new methods to cultivate clean energy.”


Two years ago, CEC released a market research study revealing support for built-in solar electric systems in newly constructed homes that has not declined among new homebuyers despite economic pressures. NSHP market research was conducted by an independent contractor, Fairbank, Maslin, Maullin & Associates from March to May 2007, in June and November 2008, and October 2009.


SAVE was developed through a coordinated effort among appraisers, realtors, and public/private stakeholders.

As of May 2011, NSHP applications represent more than 15,223 new energy-efficient solar homes and approximately 30 megawatts of solar capacity.


CEC Representative Provides Additional Details to GBI

In an email interview with GBI, CEC spokesperson Amy Morgan provided the following additional details about SAVE:


GBI: What is the cost, if anything, to use SAVE?


Morgan: SAVE is a free online tool available for use


GBI: About how many people are expected to use SAVE and by when? Who will be using it? 


Morgan: SAVE was developed for appraisers and real-estate professionals through their valuable input during development. Consumers can also enter their own information, including the homeowner’s unique address, PV system size, and local utility information. Since the launch in early August, the tool has received almost 2,000 inquires.


GBI: In what ways will SAVE be promoted? What is your agency’s budget to both promote and operate SAVE?


Morgan: CEC is promoting SAVE through earned and social media with in-house resources. There is no marketing budget for SAVE. CEC is also in the process of launching webinars at appraiser and real-estate-professionals conferences and meetings. The online application of SAVE was developed through a coordinated effort between in-house staff and an outside contractor. The cost for the development of SAVE was approximately $70,000.


GBI: Can SAVE be used to calculate values for all types of PV systems, including so-called “solar shingles”?


Morgan: Yes, as long as the minimum inputs are entered into SAVE (total system size, system age, location, etc.).


GBI: What is the formula for calculating PV system values? How much weight is given to individual formula components, such as the zip code?


Morgan: The foundation of SAVE is the present value formula, specifically known as the Modified Uniform Present Value Formula (MUPV). SAVE uses various calculations to drive MUPV such as annual energy output calculation, annual energy cost savings calculation, system age calculation, and the system remaining lifetime calculation. 


Example: Zip Code is one of the important inputs to SAVE; it is used to determine electric utility rates and climate zones. Climate zones are one of the inputs used to determine annual energy output. Annual energy output and electric utility rates are combined to determine annual energy coast saving (A0 in MUPV formula below).





GBI: What do California’s New Solar Homes Partnership goals and renewable energy mandates specify?


Morgan: California solar homes help meet the New Solar Homes Partnership (NSHP) goal and the state’s renewable energy mandate to integrate the largest portfolio of renewable energy in the country -- 33 percent renewable energy by 2020. The goals of the NSHP are to create a self-sustaining market for solar homes and gain builder commitment to install solar energy systems on new homes as a standard feature. A NSHP home is at least 15 percent more efficient than the current building standards. As of May 2011, the NSHP applications represent more than 15,000 new energy-efficient solar homes and approximately 30 megawatts of solar capacity. This statewide effort is known as Go Solar California in partnership with the California Public Utilities Commission, California Solar Initiative. Information about NSHP can be found on the Go Solar California website at Earlier this year, Gov. [Jerry] Brown [D] signed new legislation requiring utilities to obtain 33 percent of their electricity from renewable sources by 2020 under the renewable portfolio standards (RPS). Information about California’s RPS is available at:


GBI: CEC declared that the new tool “adds value for California solar homes.” Could this tool actually backfire and hurt the solar homes market in California if the data indicates that going solar does not prove to be cost-effective in most applications?


Morgan: No, the SAVE tool incorporates data unique to each PV system (system address, electric utility rates, climate zone, system size, etc.), and the results vary from location to location. SAVE does not include PV system costs as an input since system costs can vary due to a number of factors (brand, vendor, installer, new construction versus retrofit, etc.). CEC does expect that as the tool is expanded in the future to be able to look at various trends such as price, location, system size, etc. The results provided by SAVE should not be misconstrued to be the actual PV systems value contribution to overall selling price of a solar home. The results are estimates only and do not take into consideration real-estate market factors that may affect the overall value of a property and/or PV installation. The value of a PV system currently is not usually included in the appraised value of solar homes. SAVE provides real-estate professionals and appraisers with a foundation to include solar as an asset of a home.


GBI: NSHP’s market research data on this topic is almost two years old. What follow-up data, if any, can be shared, and how does that data compare with what was reported in the 2009 study? When may a follow-up study be done?


Morgan: Lawrence Berkeley National Laboratory released a study in June 2011 that analyzed the effects of residential PV systems on home sales prices in California. The report can be downloaded from A two-page summary of the report’s key findings can be found at CEC compared consumer perception about solar on new home construction and solar energy in general from 2007 to 2009.


One of the key findings is [the following]: support for built-in solar electric systems for newly constructed homes has not waned among new homebuyers despite economic pressures and less focus on energy issues in the media. After hearing a statement about these systems, in the current study, 64 percent of respondents said they would “definitely” or “probably” purchase such a system. This result is little changed from both June (66 percent) and November (67 percent) 2008. That is the latest study and is available at:

GBI: What other states, if any, have made a similar online tool available? What is unique about SAVE, and, in your opinion, what are the chances of other states adopting a comparable tool?


Morgan: This is the first and only present value PV tool geared toward appraisers and real-estate professionals for estimating PV system energy savings. SAVE is tailored to California but can be expanded to meet a broader scope, including national and international [markets].

GBI: Other comments?


Morgan: In this real-estate climate, the SAVE tool becomes an asset for the industry and for consumers who may be deciding to go solar or for homeowners who may be selling their solar homes.

For more information about SAVE



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