Buying a Home with An Alternative Energy System

HomeReal Estate

  • Author Darrell Self
  • Published May 17, 2011
  • Word count 859

Home buyers have always been interested in details like number of bedrooms and baths. Increasingly, however, environmentally conscious consumers want to know the "green" profile of the property they are considering. And it's not just concern for the planet. "Green" properties cost 30 to 60 percent less to operate. Additionally, with each passing year, more homes with existing alternative energy systems will be coming up for sale. Buyers will need to know how to factor those assets into their decision to make an offer or pass.

** Energy Considerations for Any Home **

There are some very basic "green" considerations buyers can apply to any home. Trees are the cheapest and best energy savers. A well-shaded roof can often cut 30 percent off a home's energy costs. Since heating and cooling bills total approximately 70 percent of the annual expense of running a home, this is no small consideration. In the best case scenario, trees should be on the south and west side of the home.

In general, consider the "heat island" in which the house sits. How much heat is going to get reflected off exposed concrete and asphalt from driveways, patios, and similar surfaces? Not only are homes on barren lots less attractive, they're also more expensive to heat and cool. The same is also true of homes with inadequate insulation in the attic (you want 8-10 inches minimum) and those with poorly caulked windows and doors.

** Taking Green to the Next Level **

Both home-based solar and wind energy systems are increasingly common. More and more buyers will be encountering these listings with little or no understanding of what they're looking at. First, few, if any, of these residential systems supply the home's complete energy needs. Most likely they feed electricity back into the power utility's grid via a system called net metering. In greatly over-simplified terms, you save money on your electrical bill by producing energy that you "give back" to the power company.

Using a solar system as an example (and understanding there are no market "standards" in this still developing field), an existing alternative energy system will raise the value of a home $10 to $20 per dollar saved annually on energy. So, if you save $800 a year on electricity the solar system might increase the value of the property from $8,000 to $16,000.

** Is An Alternative Energy System Worth It? **

First, you want to understand how the system works, the terms of the arrangement with the power utility, and what is involved in maintenance and upkeep. If you balk at any aspect of these details, move on. If, however, you understand why the panels are on the roof (or the turbine is in the backyard) and you can clearly track what your relationship will be with the power company, it is cheaper to buy an existing alternative energy system than to put one in yourself.

Installation costs for full systems currently range from $25,000 to $40,000. That does not include hurdles like making sure everything is good with your homeowners association, that all building codes have been met, and that the system qualifies to be tied in to the power company grid. If the home already has the system, someone else has gone through all the headaches. You just move in and start saving money immediately.

** Insist on Documentation **

If you are interested in a property with an existing alternative energy system, insist on documentation. You will want to see records from the installation that clearly detail what equipment is there and what it does. Ask for figures that show how much electricity the system generates by season -- it will vary according to angle of the sun or degree of wind available -- and exactly what that has translated to in monthly and yearly savings.

Also ask to review the agreement with the power company and find out exactly what is involved in transferring that arrangement to your account. Will new inspections be required? What is the maintenance schedule? Who do you call for repairs? Is the system covered under the existing homeowners insurance? Will your insurer cover the system? Can the system be taken off grid? (Meaning, if there is a power outage is there any provision for your home to have full or partial power?)

** The Generation and Use of Electricity is Changing **

The average cost of electricity for residential customers in Texas in 2009-2010 was roughly 12 cents per kilowatt hour. Assuming 1,500 kWh per month, that's a bill of $180. In July and August, however, it's not unusual for a home to use as much as 3000 kWh, which translates to $360. Factor into that the need for rolling blackouts in the summer of 2010 and in January 2011 when the grid was strained to capacity, and generating additional power takes on a community as well as a personal motivation.

Are homes with alternative energy systems for everyone? No. But such homes will be increasingly common and those systems will, in time, be just another factor buyers will have to weigh. Essentially, the proof is in the pudding. If the homeowner can produce documentation of the system's value in terms of electricity saved, then it is simply an additional feature to be considered before making an offer.

Are you buying or leasing a home in Dallas | Fort Worth Texas (DFW)?

Darrell Self can help you if you're searching for Plano TX homes for sale or will move to Dallas in the future. Visit DMD Realty DFW.com and browse ALL the homes for sale (and ALL the lease homes) listed in the MLS on 1 website ... no registration required.

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