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Homeowners understand that residential solar will save them money on their electricity bills over time, but many overlook the increased value that solar adds to their home. When pitching solar to a prospective customer, make sure they understand all the reasons to invest in solar.

Reporting the Value

On average, it takes 9-12 years for homeowners to recoup the costs of their solar investment, according to U.S. News. This statistic leaves many prospective solar customers fearful that such a purchase locks them into their current mortgage and to that house for at least that length of time.

Thankfully, homeowners can refinance or sell their home before the solar installation has paid for itself without losing money on their investment. By demonstrating the value of their solar installation, homeowners can attain a 5.15% higher appraisal or sale price on average.

That’s just the average. The value that solar brings to a home varies by market. New Jersey homes, for example, can sell for 9.9% more than homes without solar-energy systems, which equates to a profit of $32,281 for the median-valued home in that state, according to CNBC.

Realistically, not all home improvement projects return a dollar-for-dollar return on the investment. A kitchen remodel, for example, deteriorates in value as it ages. Therefore, if a homeowner sells her home three years later, she should not expect to receive the same amount for the refinished kitchen as when she had it installed brand new. Solar customers sometimes fail to apply this same logic to their solar system.

Misunderstanding of valuing solar also includes those who attempt to oversimplify solar valuation by stating that 1 watt of electricity equates to $1.25 in savings. Many factors affect valuing solar, such as utility rate, size of the solar system, and the length of warranty period on the system. Valuing solar using a watt-to-dollar ratio fails to account for the many intervening variables and simply does not work.

Some real estate agents cite market studies that report the value of solar to support the increased value of a home with solar. Unfortunately, these studies do not apply to the unique solar installation of a specific home. Therefore, appraisers will ignore the inclusion of any such study, and consequently, these studies provide no value to the homeowner.

Thankfully, Pearl Certification provides research-backed methods for valuing the unique solar system of a specific home. With Pearl Certification, homeowners can clearly demonstrate the value and claim real compensation for their solar investment.

Pearl Certification Report

By supplying your customers with a Pearl Certification Report, appraisers, real estate agents, and prospective buyers cannot only see the value the solar installation brings to the house, but they also receive third-party verification of that value.

“Pearl's certification and completed appraisal addendum showed off our home's high-performing features so much so, it was like bragging!” said homeowner Kathy N. “The appraisal and the closing processes would not have gone as smoothly without Pearl as the third-party verifier of our energy-efficient features.”

The Pearl Certification Report highlights the improvements made to the home with specific installation and product information, photos, and comparison data.

The Pearl Certification Report also includes the Appraisal Institute’s Green and Energy Efficient Appraisal Addendum to communicate to appraisers and potential buyers the value that the solar installation adds to the home.

When Max P., an Arizona homeowner, sought to refinance his home, the first two appraisers failed to assign value to his solar installation, according to the American Solar Energy Society.

Before seeking a third appraiser, Max P. obtained a Pearl Certification for his home, providing third-party validation of the increased value of his home supplied by his solar installation. On his third attempt, the appraiser finally assigned value to the solar installation, raising the home’s appraised value by $30,000, compared to the previous appraisals.

Of note, this example scenario occurred in 2020. Since then, the cost of solar panel materials has increased, so if Max’s solar system was appraised again in 2022, it likely would be appraised at an even higher rate.

This Pearl Certification Report successfully protected the homeowner’s ROI by maximizing the appraisal amount through third-party documentation.

Calculating the Value

Potential customers appreciate that you can provide verification of their solar investment with a Pearl Certification Report, but that isn’t provided until after the installation. How do you persuade potential buyers to make the leap?

Pearl Network Contractors receive exclusive access to the Pearl Solar Equity Calculator, the industry’s first tool to calculate discounted cash flow using certified contractor data, NREL software to calculate solar production numbers, and an API to Freddie Mac’s 30-year mortgage rate.

The calculator accounts for the following specifications to provide a truly customized estimation specific to your potential customer:

  • The solar system is financed or owned

  • Utility company

  • Type of solar system

  • Solar system size

  • Inverter type

  • Installation date

  • Power production data

The more data entered, the more accurate the results, but for fields not entered, Pearl will automatically populate default values based on industry standards. To maximize accuracy, Pearl calculates the annual degradation rate, while accounting for an escalating utility rate.


Solar Calculation Example

Taken from a Pearl Solar Equity Calculator report, the excerpt shown here explains how even if the solar system has not paid for itself through electric bill savings, it still adds value to the home starting day one. The report estimates the solar system’s value at $26,226.23. Therefore, if the homeowner chose to sell their home the same year as the system was installed, they could sell the home for over $26,000 more than if their home lacked a solar system.

The results of the Pearl Solar Equity Calculator clearly communicate to your prospective customer the value that solar will add to their home. 

The next time you pitch solar to a prospective customer, include the results of the Pearl Solar Equity Calculator to make the value of your services undeniable.

109411 HOMES CERTIFIED
135283 HOMES SCORED

Pearl Certification is transforming the housing market. We’re making a visible difference nationwide for homeowners and the businesses that serve them.