With climate change at the
forefront of many local and national discussions, some cities and states are
If buyers come to expect (and
possibly even prefer) condos with solar power, older associations may feel
pressure to consider installing PV systems in order to protect their property
values in a competitive market.
While not necessarily one of the
current leaders in renewable energy usage, Massachusetts certainly is doing
better than some states. In fact, over the summer, a bill was passed by the
Massachusetts Senate, but has yet to pass in the House, which would remove the
state’s caps on net metering and set a 100% renewable energy mandate, among
other things. Given the state’s apparent commitment to addressing climate
change, it is conceivable that Massachusetts could pass a law similar to the
California solar requirement in the near future.
If Massachusetts were to follow
Californian’s lead and enact a solar mandate, new developments could have to
absorb the added construction costs of PV system installation. Presumably, such
costs could be passed along to buyers, but if solar power becomes the norm and
not simply a novelty seen only in so-called “green buildings,” one must
consider whether developers will actually see a return on their investment; PV
systems could eventually become expected, particularly in smaller buildings,
and therefore not something for which buyers are willing to pay a premium. To
avoid the higher cost of a unit with solar power, some buyers may opt to
purchase units in exempted condominiums, such as larger new construction
buildings or existing condos that might be grandfathered in under a new
mandate. On the other hand, the cost of PV systems has declined in recent years
due to industry advances, so the cost to developers may become relatively
minimal.
Even if a Massachusetts solar
panel requirement were to apply only to new construction, such legislation also
has the potential to impact existing condominiums. If buyers come to expect
(and possibly even prefer) condos with solar power, older associations may feel
pressure to consider installing PV systems in order to protect their property
values in a competitive market. Additionally, even without a Massachusetts
version of the California law, given the rise in the number of eco-conscious
green buildings in and around the Greater Boston Area, some associations may
find it beneficial to install environmentally friendly features like solar
panels sooner rather than later.
However, installing a PV system
in an existing condominium controlled by the association of unit owners is
quite different from—and considerably more complicated than— doing so in a new
build that is still under developer control. As such, below are some of the
factors an association should address when considering whether to install solar
panels:
1. Is the building’s roof
suitable for solar panels?
- A PV system requires sunlight.
Contact a solar contractor to conduct an onsite assessment to evaluate whether
the position of your condominium’s roof receives enough sunlight for solar
power.
- Determine the age and condition
of the roof. PV systems often come with warranties lasting as long as 25 years.
If the roof will need to be replaced before the PV system, it may be prudent to
(a) consider replacing the roof prior to installing solar; (b) factor in the
additional cost of eventual removal and reinstallation of the PV system; or (c)
wait to install solar panels until it is possible to also replace the roof at
the same time.
2. Are there technical challenges
to installing a PV system?
- Often at no cost, a solar
contractor can assess the feasibility of installing a PV system and identify
potential technical barriers, including: (a) whether there is sufficient roof
space and structural support for the system; (b) zoning requirements that could
restrict a PV system; and (c) issues with connecting to the utility grid.
3. Is there sufficient trustee
and unit owner support for a PV system?
- As an improvement under the
Massachusetts Condominium Act, converting to a PV solar system will require a
vote and association approval, as set forth in the condo’s governing documents,
and M.G.L. c. 183A § 18.
- Before putting it to formal
vote, somewhat early in the planning stages, it may be useful to communicate
with members of the association to assess the level of interest in going solar.
Share the information you already have and identify the information that will
be obtained before a proposal will be submitted to the association.
4. What are the different models
of PV systems?
- The association can purchase,
install, and maintain its own, on-site solar power system.
- Alternatively, an association
could consider a third-party model, such as a solar lease or a power purchase
agreement (PPA). Under a solar lease, the condominium makes scheduled,
pre-determined rental payments to a solar leasing company which installs and
owns the PV system located on the condominium property. Under a PPA, a project
developer installs, owns, and operates the PV system on the condominium
property, and the condominium agrees to purchase the power generated by the
system at a set per-kilowatt-hour cost, which is typically competitive with the
condominium’s electric utility rate.
- Another option is
community-shared solar (also referred to as community solar, solar farms, or
solar gardens). Community solar utilizes a large, off-site, solar farm to
supply energy to multiple parties while reducing energy costs. It can be an
option where shading and or structural issues render on-site PV solar
impossible.
5. How will the association fund
the PV system project?
- Depending on the size of the
condominium and who will benefit from the PV system, the association may be
able to fund the project through reserves and/or special assessments.
- Where the association lacks
sufficient reserve funds, or it does not want to levy special assessments
against unit owners, consider applying for a condominium association loan,
including a solar-specific loan, which is available to condominiums.
- The condominium’s governing
documents will set forth the required voting and approval procedures, which
will depend on the type and scope of the project.
There are multiple factors for
condominiums to consider when navigating the conversion to solar power, and
this article barely scratches the surface. As a result, it is important that
associations seek professional advice, particularly with regard to approval
requirements, easements, and contracts with a solar contractor, lender, leasing
company, and/or solar project developer.
Originally
posted November 30, 2018 on tlawmtm.com: https://www.lawmtm.com/solar-panels-condominium-law.html
Janelle received her J.D. from Northeastern University School of Law where
she was Editor-in-Chief of the Northeastern University Law Review and a
teaching assistant for the property law and legal research and writing
programs. During law school and prior to joining Moriarty Troyer
& Malloy LLC, Janelle
was a federal judicial intern for the Honorable Denise J. Casper, U.S. District
Court, District of Massachusetts.
Should you have any questions
regarding this article, please do not hesitate to contact Janelle Dempsey at
617-934-4550 or via email at
jdempsey@lawmtm.com.
