No, Solar Will Not Hurt Property Values

January 14, 2023

American Society of Farm Managers and Rural Appraisers:

In recent years, publicity surrounding solar farms has gained the attention of property owners and appraisers. As with any large-scale development, the change represented by utility-scale solar can be cause for concern. Naysayers express worries involving impacts to viewshed, drainage problems, the idea of replacing productive agricultural lands with an industrial use, and more. Much of this worry comes back to one thing: the potential impact on property values. 

recently completed study from the University of Rhode Island looked at 400,000 transactions in New England over the course of 15 years, finding that suburban residential property values suffered negative impacts when nearby solar farms replaced resources perceived as scarce, such as green space. On the other hand, this same study found no associated impact on property values for solar farms located in rural areas. 

Meanwhile, a survey by the University of Texas at Austin asked 37 appraisers a series of questions about property value impacts based upon proximity to utility-scale solar projects. On average, the surveyed appraisers believed that there was a negative relationship between solar farms and nearby property values, though the appraisers with strong negative opinions also answered “No” when asked whether they had prior experience assessing property located near large solar installations. Dr. Varun Rai, who led the study, stated that the results “suggest that experience assessing near a solar installation is associated with a much less negative estimate of impact.” He also noted that “the median and mode of all estimates of impact was zero, suggesting negative estimates from a few respondents were pulling down the mean.” 

Patricia McGarr, who serves as the National Director of CohnReznick Advisory’s Valuation Practice, has conducted a number of property value impact studies involving solar, and spoke on the subject at the ASFMRA Illinois Chapter’s Annual Meeting in 2019. McGarr’s studies found no consistent negative impact on residential property value that could be attributed to nearby solar farms. She also asserted that township and county assessors have tremendous amounts of data that point in the same direction. 

McGarr referenced the 1,000-acre “North Star” solar project located in Chisago County, Minnesota. There, the county assessor found no adverse impact on nearby property values, noting, “It seems conclusive valuation hasn’t suffered.” 

McGarr has attended many public hearings on proposed solar developments and listened to residents taking issue with the idea of putting good farm land out of production and potential impacts to viewsheds and drainage tiles. “Owners of transitional ag lands, or lands that are in the path of development, are concerned about any changes that could have future impacts on sale values,” she explained. 

But McGarr believes solar developers are addressing these issues. It’s now common practice for developers to include vegetative screening as a visual buffer between solar farms and adjacent properties to account for aesthetic concerns. In regards to drainage, developers are “conducting drainage tile studies and being vigilant […] so that they don’t reroute the drainage.” 

“Solar is an interim use,” McGarr added. “There are no contaminants and the land sits fallow, allowing the soil quality to improve. It’s not like you’re paving things over.” 

Donald Fisher, ARA, served six years as Chair of the ASFMRA’s National Appraisal Review Committee and 19 years as Chair of the Editorial Committee. Donald is the Executive Vice President of CNY Pomeroy Appraisers, and has done several market studies examining the impact of solar on surrounding residential values. 

“Most of the locations were in either suburban or rural areas, and all of those studies found either a neutral impact or, ironically, a positive impact, where values on properties after the installation of solar farms went up higher than time trends,” he explained. 

CohnReznick is a top ten accounting firm that has done considerable work studying impacts of solar farms on local property values.

Property Value Impact Study, Prepared by CohnReznick LLP Valuation Advisory Services:

The Lapeer solar project was developed in two phases: the Demille Solar installation and the Turrill Solar installation. For purposes of our study, taken together, both installations are considered one solar farm.

As a part of our research, we interviewed three local real estate brokers that sold homes adjacent to the Lapeer Solar farm. According the brokers, there was no impact on the home prices or marketability due to the homes’ proximity to the solar arrays.

Renee Voss of Coldwell Banker, selling broker of the raised ranch at 1138 Don Wayne Drive (Adjoining Property 7), which is adjacent to the Demille solar farm at the southeast corner, noted that there was no impact on this sale from the solar farm located to the rear. The home, which has a pool in the backyard, sold quickly with multiple offers, Voss stated.

Josh Holbrook, the selling broker of 1408 Turrill Road (known as Adjoining Property 16), located just south of the Demille Solar Farm, said the solar farm had no impact on the sale and that the community takes pride in the solar farm.

Anne Pence of National Realty Centers, the selling broker for 1126 Don Wayne Drive, a single-family home adjacent to the Demille solar farm (known as Test Area Sale 9), reported that “the solar farm did not have any effect on the sale of this home. The buyers did not care one bit about the solar field in the back yard. The fact is that you know no one is going to be behind you when they develop a solar farm in your back yard. And there they put up trees to block the view. My in-laws also actually live at end of that street, even though they haven’t sold or put their house on market, they don’t mind the solar panels either. It’s not an eyesore. And another house sold on that block, a raised ranch home, and it sold with no problems.”

We analyzed seven Control Area Sales of single-family homes with similar construction and use that were not located in close proximity to the solar farm, that sold within a reasonable time frame from the median sale date of the Test Area Sales in Group 1. The Control Area Sales for Group 1 are ranch homes with three bedrooms and one and two bathrooms. We excluded sales that were bank-owned, and those between related parties.

The Control Area Sales were adjusted for market conditions using a regression analysis to identify the appropriate monthly market conditions adjustment. The result of our analysis for DTE’s Lapeer Solar Project – Group 1 is presented below.

The days on market for the three Test Area Sales had a median of 28 days on market (ranging from 5 to 48 days), while the median days on market for the Control Area sales was 72 days (ranging from 14 to 224 days), and we note no negative marketing time differential.

Additionally, we have contacted market participants such as appraisers, brokers, and developers familiar with property values around solar farms in Indiana, Illinois, Minnesota, and Michigan. Commentary from our conversations with these market participants are recorded below.

We spoke with Ken Surface, a Senior Vice President of Nexus Group. Nexus Group is a large valuation group in Indiana and has been hired by 20 counties in Indiana regarding property assessments. Mr. Surface is familiar with the solar farm sites in Harrison County (Lanesville Solar Farm) and Monroe County (Ellettsville Solar Farm) and stated he has noticed no impact on property values from proximity to these sites.

We spoke with Ken Crowley, Rockford Township Assessor in Winnebago County, Illinois, who stated that he has seen no impact on property values in his township as an effect of proximity to the Rockford Solar Farm.

We interviewed Missy Tetrick, a Commercial Valuation Analyst for the Marion County Indiana Assessor. She mentioned the Indy Solar III sites and stated that she saw no impact on land or property prices from proximity to this solar farm.

We spoke with Dorene Greiwe, Decatur County Indiana Assessor, and she stated that solar farms have only been in the county a couple of years, but she has seen no impact on land or property prices due to proximity to this solar farm.

Connie Gardner, First Deputy Assessor for Madison County Indiana, stated that there are three solar farms in her county, and she has seen no impact on land or property prices due to proximity to these solar farms.

We spoke with Tara Shaver, Director of Administration for Marion County, Indiana Assessor/Certified Assessor, and she stated that she has seen no impact on land or property prices due to proximity to solar farms.

In Otter Creek Township, in LaSalle County, Illinois, we spoke with Viki Crouch, the Township Assessor, and she said that there has been no impact on property values due to their proximity to the Grand Ridge Solar Farm.

Candace Rindahl of ReMax Results, a real estate broker with 16 years of experience in the North Branch, Minnesota area, said that she has been in most of the homes surrounding the North Star Solar Farm and personally sold two of them. She reported that the neighboring homes sold at market rates comparable to other homes in the area not influenced by the solar farm, and they sold within 45 days of offering, at the end of 2017,which was in line with the market.

Dan Squyres, Chisago County Tax Assessor, confirmed that the Chisago County Assessor’s Office completed their own study on property values adjacent to and in close vicinity to the solar farm from January 2016 to October 2017. From the study, the assessor determined the residential homes adjacent to the North Star Solar Farm were in-line with the market and were appreciating at the same rate as the market.17


One Response to “No, Solar Will Not Hurt Property Values”

  1. rhymeswithgoalie Says:

    List of potential developments:
    – big-box shopping area
    – prison
    – wastewater treatment facility
    – highway widening
    – golf course
    – clearing land for new bedroom community
    – freight warehouse
    – industrial grade agriculture (pigs, chickens)
    – highway flyover
    – landfill
    – quarry
    – wind farm
    – solar array

    Have them ranked on how they affect property value.

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