Friday, April 22, 2011

Adding Solar Increases Home Values

I had been expecting this trend. Now there's data to support my speculations.

In Stewart Wadsworth's course on PV (photovoltaic) installation, he said he had seen a sequence of 3 different kinds of consumers over the course of 300+ projects. At first, it was the type that wanted to help in the environmental movement and had some extra money. Then, it was the Silicon Valley engineer type who had a fascination with the technology. But most recently it was the financial types, the ones who had done the fiscal math and discovered that installing solar panels was actually one of the best personal investments available in a troubled economy.

Solar's five to eight year return on investment was better for these customers than most anything attached to the record low Fed interest rates. Solar is much more consistent than the stock market. It might even be called boring, but investors have lost their taste for the exciting over the past couple years. Boring feels safer.

So it seems only natural that the location for much of these PV installations, the home, is seeing an increased valuation. To me, the motivation for installing solar is the same as what makes so many homeowners in the first place: Going from renting to owning has long been a pathway to financial prosperity. And although I haven't seen PV marketed as a process of switching from renting one's electricity to owning it, I think that is the fundamental appeal, at least for those more into greenbacks than green politics.

I think it will continue to be a worthy investment even as the subsidies ramp down.   The Lawrence Berkeley National Laboratory report shows about a $5.50 per watt increase in home prices, while the cost of installation was $5 per watt. And SolarBuzz now has the steadily falling retail price of installed solar around $4 per watt (including inverter). Even if a buyer's market supports less increases, this still makes solar one of the most effective ways to increase the value of a home.

And I expect that the solar homes tend to sell much quicker than the average. With an increase in price comes increased incentives for realtors to move such properties since they get bigger commissions. The banks prefer lending to a homeowner that will have more monthly cash on hand due to a smaller utility bill. And the prospective homeowners will save on utilities while appeasing any preferences towards a smaller carbon footprint.

Many market analysts are projecting a downturn in the solar market over the next few months. This is due to the European fiscal struggles that are likely to kill a lot of their solar subsidies. But I think there will be a counter-balancing trend in the US as those who would like to see their home's value rise during a tough market learn about the fiscal attractiveness of solar.

Tuesday, April 12, 2011

Structural Fab

Soon we will be making buildings more efficiently and sustainably using computer controlled manufacturing and as-needed supply strategies. This article in MIT's Technology Review discusses bringing the FabLab and RepRap processes to the construction industry.

I particularly like the biomimicry aspects of making load bearing members in a building structurally resemble bones. Now if we just add some sensors as well, our buildings could tell us when they are breaking.

I suspect this will mean the replacement of many labor intensive construction jobs, but the building industry shouldn't expect to avoid the same technology-driven disruptions that the automotive, aeronautic, electronics and even shipping industries have endured.