Local Law Blogs

Solar Panels: A Statutorily Protected Power Substitute

By Tara A. Tighe

Faced with the burden of tough economic times, more and more homeowners are looking for ways to cut costs.  While some individuals have chosen to cut back, others have chosen to seek out economically advantageous alternatives.  In particular, the search for substitutes has become increasingly important when it comes to necessary household expenditures such as heat and electricity.  Although it has become common practice for local utility companies to power community homes, low cost alternatives such as solar panels may be the wave of the future.   Accordingly, Condominium and Homeowners Association Boards may soon find themselves faced with a new set of issues never before contemplated and an understanding of the legal obligations associated with this is essential. 
 

It is important to note that New Jersey statutory law, specifically, the Planned Real Estate Development Full Disclosure Act ("PREDFDA"), N.J.S.A. 45:22A-48.2,  lays out very specific guidelines governing the installation of solar panels in common interest communities. 
 

According to the Statute, the extent to which an Association can regulate the installation of solar panels largely depends upon the type of housing unit involved and the way 'roofs' are defined in the Association's governing documents. Overall, a prohibition against solar panels is permitted in communities where the unit roofs are considered 'common elements.' Conversely, solar panels cannot be prohibited in communities with single family homes or communities where the unit owners are responsible for the roofs.  However, the law provides that Associations which are required to allow solar panels may also adopt rules and regulations governing their installation.
 

In particular, the Statute provides that an Association can adopt rules governing the following items:

1. The qualifications, certification and insurance requirements of personnel or contractors who may install the solar collectors;
2. The location where solar collectors may be placed on roofs;
3. The concealment of solar collectors' supportive structures, fixtures and piping;
4. The color harmonization of solar collectors with the colors of structures or landscaping in the development; and
5. The aggregate size or coverage or total number of solar collectors
    

If an Association decides to promulgate rules and regulations in this regard, the extent to which it may do so is limited.  The Statute states that an Association shall not adopt or enforce any rule if compliance would increase the solar panels' installation or maintenance costs by an amount greater than 10 percent of the total cost of the initial installation, including costs of labor and equipment.  In addition, the Statute prohibits Associations from adopting or enforcing any rule which inhibits the solar panels from functioning at their intended maximum efficiency. Therefore, while an Association is given leverage to adopt certain rules and regulations, those rules and regulations must adhere to the specific guidelines expressed in the Statute. 
 

As a rule of thumb, if an Association is responsible for the roofs, it can ban solar panels.  However, if an owner is responsible for the roofs, the Association must allow solar panels, so long as the rules and regulations it has adopted are followed.  As always, it is advisable to have a professional draft or review any restrictions you intend to put into place to ensure your community's compliance with the law.

Full post as published by New Jersey Law Blog on December 20, 2010 (boomark / email).