Pearl Certification, a national provider of third-party certification of high-performing homes, launched the an ‘equity calculator’ to help contractors better demonstrate the value solar installations can add to a home. The Pearl Equity Calculator is 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.
“A lack of installation information on the solar system has hindered appraisers from adequately assessing the true value of residential photovoltaic (PV) systems. The Pearl Equity Calculator solves this problem, using certified data from trusted sources,” said Pearl Certification co-founder and president Robin LeBaron.
While one study has shown that solar installations add 4% on average to the resale value of a home, many homeowners are not seeing those increases when they sell their homes. Pearl’s research shows that many homeowners were unable to fully realize the return on investment of their solar panel system at the time of sale. The Pearl Equity Calculator equips homeowners, contractors and appraisers with the resources needed to accurately capture the value of a PV investment.
In conjunction with Pearl’s certification app, the calculator provides:
- A contractor proposal tool, which calculates the discounted cash flow of the solar installation
- An appraiser-ready certification report that includes a discounted cash flow schedule to help ensure the home’s solar value is calculated correctly at the time of sale.
- An online dashboard where valuation reports can be stored and later shared with homeowners, appraisers, or real estate agents.
Using its calculator, Pearl ran the numbers on the homes with certified solar systems in its database to calculate the amount of equity its network contractors have created for homeowners, based on the projected amount of power offset by the system. From today through the end of the power production warranty period, the company was excited to share the resulting total value of $93 million.
“Pearl’s Equity Calculator is a game-changer on many levels. It gives contractors a powerful tool to instill buyer confidence when asked by customers if their solar install will add value to their home. It provides appraisers a quantifiable dollar range of value (and the data to back that set of numbers up), as well as a certification package home sellers can share with their real estate agent when they decide to sell,” said Cynthia Adams, Pearl Certification co-founder and CEO.
Pearl’s equity calculator provides support for an industry-accepted valuation methodology for residential solar given the continued strong demand for PV systems and the many issues appraisers have in getting the information they need to assign contributory value.
“Homeowners are embracing solar as a way to mitigate escalating energy costs and reduce their carbon footprint. We should encourage and reward their efforts by ensuring that they receive the maximum value for their investment,” added LeBaron.
News item from Pearl Certification