Path-Q Solar

How should solar be valued when the buyer may not receive the same electricity bill savings as the seller?

Answer

Value solar using the buyer's expected usage, occupancy, utility arrangement, financing, and time horizon rather than the seller's historical savings. A buyer should discount projected benefits that depend on different consumption patterns or uncertain future bill treatment.

Key points

  • Model the buyer's load profile and likely self-consumption.
  • Separate transferable equipment value from buyer-specific operating savings.
  • Include future repairs, warranties, debt, leases, PPAs, and roof obligations.
  • Use conservative savings assumptions if the buyer's future usage is uncertain.

What it depends on

  • Buyer electricity usage and occupancy
  • System production and export treatment
  • Utility bill structure and contract obligations
  • Buyer financing and expected holding period

Risks and trade-offs

  • A high seller savings history may not apply to a lower-use buyer.
  • A buyer may pay for production that is exported at a lower value than onsite consumption.
  • Overreliance on seller bills can overstate fair value.

Information you may need

  • Buyer-specific usage expectations
  • Recent production and utility records
  • System ownership or contract documents
  • Expected repairs and remaining warranty

Your next step

What to do next

Prepare a buyer-specific cash-flow estimate using conservative usage and savings assumptions, then compare it with the requested price adjustment.

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SQ01920