Solar energy is one of the fastest growing sources of clean energy in the U.S., reports the US Department of Energy. There are over three million solar energy installations in the US, and one million of these were installed over the past two years. Homeowners’ Associations (HOAs) are also rising in popularity, with around 77% of completed homes that were built for sale forming part of community associations.
The benefits of living as part of a community are numerous, ranging from helping maintain property values to well-maintained common areas and amenities. What happens, however, if one neighbor decides to install solar panels on their home? Do they have the right to decide the panels’ positioning and if not, to what extent can HOAs interfere with their wishes?
A Recent Victory for Rooftop Solar Energy
In July 2022, a decision by the North Carolina Supreme Court showed the extent to which neighborly disputes surrounding the subject of solar panels have become a major bugbear. The court ruled in favor of solar companies, environmental groups, and a local resident whose rooftop solar panels had received opposition from the Homeowners’ Association his house formed part of.
The Association in question sought to rely on a 2007 law that banned North Carolina HOAs from prohibiting the “reasonable use of a solar collector” by single-family homes. The Association in question sought to prohibit the resident’s street-facing panels because of aesthetic reasons. The Supreme Court concluded that this prohibition was not possible unless there were explicit clauses in the community covenants that prohibited the placement of this type of panel.
Will HOAs Rush to Change their Governing Documents?
HOA governing documents cover various types of information, the most important and sweeping of which is the Declaration of Covenants, Conditions, and Restrictions (CC&Rs). It contains the most comprehensive information on how the HOA is to be run and if other documents contradict it, it overrides them.
CC&Rs cover a host of details, including how often you need to mow your lawn, whether you can park on the street, where you are allowed to place a satellite dish, and more. This document additionally covers solar energy. The Board has the discretion to change a few small rules (for instance, they can limit tennis court hours or prohibit a boat from being stationed in front of a home). In general, however, the subject of energy should be covered by the CC&Rs owing to its importance.
Is it Time for Legal Reform?
Following the North Carolina Supreme Court’s decision, over 14,000 HOAs in North Carolina will now have to write specific rules on street-facing solar panels. Interestingly, the matter could go beyond the jurisdiction of HOAs alone, as eco-friendly energy groups are trying to stop them from impeding the progress of solar energy. These groups have managed to get a bill through the state House that has now moved to the Senate. Groups like the NC Sustainable Energy Association are seeking to remove HOA installation restrictions and empower residents to have stronger negotiating power with their respective HOAs.
What Powers Do HOAs Have with Respect to Solar Energy?
Currently, HOAs are not permitted to flat-out deny a resident’s right to install solar energy, but they can hinder the installation of a public-facing panel with maximum sun exposure. Repositioning panels can reduce their efficiency by around 10%. During negotiations, homeowners can work with solar energy groups to provide their HOAs with specifications, information on energy savings, and renders. Past cases have shown that installations can look beautiful on appropriately colored roofs. HOAs may also find it difficult to argue with homeowners who share information with others regarding the effect that optimally installed panels can have on their homes’ resale value. Panels can raise a home’s value by around 4%.
There are many good reasons that convince HOAs, provided they are given the right information. First and foremost, solar panels provide environmental benefits, helping to fight climate change and reducing air pollution. They also decrease energy costs, enabling homeowners to make big savings. With a properly installed panel, the average home could save around $1,390.22 per year (or $115 per month). The main factors when it comes to the amount of savings homeowners can make, however, are the size of panels and their positioning. Solar panels are weather dependent, meaning they need to make the most in terms of capturing even a few hours of peak sunlight on days when it is rainy, cloudy, or snowy.
A recent by the North Carolina Supreme Court has given hope to homeowners wishing to instal public-facing solar panels. Because HOAs can simply change their rules so as to prohibit this type of panel, however, legal reform is being pursued by clean energy companies. Forward-facing panels can be given an aesthetic lift through the use of specific colors and textures in roofing. Finding this type of solution is definitely worthwhile, considering the loss of efficiency that can occur when panels are not optimally placed.