Homeowners with HOAs looking to go solar welcome recent NC Supreme Court ruling

Homeowners looking to install rooftop solar panels notched a win June 17 when the North Carolina Supreme Court ruled homeowner associations can’t discretionarily reject residents’ panels or pass restrictions that make them ineffective.

“High percentages of homes in towns and cities across the state are located within organized property owner associations,” said Brownie Newman, chair of the Buncombe County Board of Commissioners and founder of the Asheville-based solar company Headwaters Solar.

“This (ruling) puts more of the burden on the property owner associations that might have concerns to create clear rules rather than being able to subjectively decline them on a case-by-case basis.”

This Supreme Court case dates back to 2018 when husband and wife Thomas and Rana Farwig of Raleigh spent $32,000 to install solar panels on their roof. The panels were visible from the street, and some neighbors complained about the sight. The community's HOA, Belmont Association, called the panels an “aesthetic” problem and advised they be moved to a part of the house that wasn’t visible from the road.

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But the couple asserted the panels had to face the road in order to capture enough sunlight to be effective. With the Farwigs refusing to remove the panels, the Belmont HOA sued.  

Reversing a ruling

In May 2021, the North Carolina Court of Appeals sided with the Belmont Association, arguing state law gives HOAs the right to “refuse to approve any Plans for improvements which are not, in its sole discretion, suitable or desirable for the Properties.”

But in a 4 to 3 ruling June 17, the state Supreme Court reversed this lower court decision. The justices determined Belmont’s actions went against North Carolina’s 2007 solar access law, which grants homeowners the right to "reasonable use" of solar panels, because moving the solar panels would make them ineffective.

The court clarified that an HOA could restrict solar panels so long as the limitations were spelled out in advance and didn’t make the panels ineffective.  

“This ruling provides some clarity for homeowners interested in going solar,” said Lauren Bowen, a senior attorney with the Southern Environmental Law Center,which filed an amicus brief in the case on behalf of the North Carolina Sustainable Energy Association.

Peter Ledford, the general counsel and director of policy for the Raleigh-based NCSEA, said in a June 21 press release that “this decision will reduce a significant barrier to the residential solar market in North Carolina, supporting jobs in the rooftop solar industry, and helping homeowners lower their utility bills and clean up the grid.”

Three Democratic justices and one Republican justice voted in the majority. Democratic Justice Michael Morgan and Republican Justice Phil Berger Jr. wrote dissenting opinions.

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A top solar-producing state

North Carolina Attorney General Josh Stein, who filed an amicus brief on behalf of North Carolina residents, celebrated the Supreme Court ruling on Twitter, declaring it “A big win for homeowners’ property rights and for clean energy!”

HOAs and solar are both common statewide.  

According to the research company iPropertyManagment, the state has 14,100 HOA communities with around 2.7 million residents. Almost 40% of North Carolina homeowners are part of HOAs.

And North Carolina is one of the nation’s leaders in solar production. While the state no longer generates the second-most solar energy, it still ranks in the top five, behind larger states like California and Florida.

According to the Solar Energy Industries Association, 8.2% of North Carolina's electricity comes from the sun. 

Brian Gordon is a statewide reporter with the USA Today Network in North Carolina. Feel free to email him at bgordon@gannett.com or follow him on Twitter @skyoutbriout