A solar appraisal is a professional assessment that determines the added home value created by an installed photovoltaic system, using standardized methods to document energy production capacity and financial benefits. These appraisals support financing decisions, property sales, and tax assessments.
Appraisal Methodology
Certified solar appraisers evaluate system specifications, installation quality, age, warranty coverage, and local electricity rates to calculate value additions. The income approach multiplies annual electricity savings by a capitalization rate (typically 7% to 10%) to determine property value increase. A system saving $1,200 annually at 8% capitalization adds approximately $15,000 to property value. Most appraisals cost $400 to $800 and take 5 to 10 business days.
Applications
Solar appraisals are essential for mortgage refinancing, home equity loans, and property sales transactions. They provide documentation for property tax assessments and casualty insurance claims. Lenders increasingly require appraisals before financing purchases of solar-equipped properties. Quality appraisals help buyers and sellers negotiate fair pricing that reflects genuine energy production value.