After 5 years in court, Home owner wins solar panel battle.

I'm shocked, this guy installed solar on his home in Feb of 2018, Now 5 years latter he actually won! Everyone expected the NC supreme court to just rubber stamp the lower courts ruling against the Home owner, but instead the high court reversed the case. Wonder how long the HOA will take to return the $52,000 in fines that were dished out? probably more $50/days for 5 years is $73K. My HOA had previously denied solar panels on front of my house, might get some fnow because they look so pretty. Article is below.

North Carolina Supreme Court Issues Important Solar Panel Case

In a case of wide-reaching impact, the North Carolina Supreme Court on Friday, June 17, 2022, issued its decision in Belmont Association, Inc. v. Farwig. An earlier blog discussed the factual background and decision from the Court of Appeals in detail.

By way of brief summary, the homeowners in this case installed solar panels on the front facing façade of their roof without approval and the homeowners association commenced fines. Nothing in the declaration explicitly regulated solar collectors, but the association, pursuant to its general authority over architectural matters and aesthetics, refused to allow their installation on the front roof.

The trial court ruled in favor of the association. The homeowners appealed. The NC Court of Appeals affirmed the trial court’s judgment and held that the statute allowed the association to deny solar panels in this case because the installation on the front roof was visible by a person on the ground. The Court of Appeals decision contained a dissent, giving the homeowners an automatic right of appeal to the North Carolina Supreme Court. Many assumed that the Supreme Court would uphold the Court of Appeals decision, but in a surprise ruling it sided with the homeowners, reversed and remanded the case to the trial court for it to enter summary judgment for the homeowners.

The Supreme Court’s analysis focused on statutory construction. The Court held that restrictions that effectively prohibit solar installations are invalid. The Court held that there are two exceptions.

The first exception appears in the statute itself and allows an association to prohibit solar installations in three general areas: on the façade of the home, on front roof surfaces, and in the front yard. Despite this language, the Court held that because there was no specific prohibition against solar installations in the declaration, the Association could not take advantage of this exception.

The second exception is even more difficult to quantify. It allows an Association to prohibit a solar installation if that prohibition does not “have the effect of preventing the reasonable use of a solar collector.” Here, the Court held that the association’s decision to deny the solar panels on the front roof did have the effect of preventing the reasonable use of a solar collector and granted summary judgment in the homeowners’ favor.

It is clear that the Supreme Court struggled with this decision because three justices not only disagreed with the majority’s decision but authored two separate dissenting opinions explaining their disagreement with the majority. However, the decision of the majority stands and will guide community associations going forward. What does this mean for your community?

For North Carolina communities not subject to N.C.G.S. 22B-20, the association can continue to regulate solar panels pursuant to its general architectural review authority. These communities can exercise their architectural authority to allow, prohibit, or allow with limitations on placement.
For North Carolina associations that are subject to the statute, authority to regulate solar panels has changed. If the Declaration specifically addressees restrictions on solar collectors, the association can prohibit solar collectors in the areas outlined in the statute. If, however, the declaration only contains general architectural oversight authority, then the association cannot prohibit solar collectors from being installed on the front facing facades of homes if that regulation would prevent the reasonable use of a solar collector. What does this mean? In most cases, it will likely come down to whether the association’s rule reduces the efficiency or usefulness of the solar panels. A homeowner likely can be asked to verify this reduction in efficiency. We do not yet have any clear direction on how much of a reduction in efficiency is reasonable. Is it 10%? 20%? Other states have statutes that outline what that reduction may be, but there is no guidance at this point.
This decision from the Supreme Court is brand new and we are still considering how it will impact specific communities in North Carolina. If you have questions about how this decision may impact your community, please feel free to contact any of our experienced community association attorneys.

Yep I wonder about that too. Since they won does the HOA have to pay any of their legal fees? The HOA I assume has to return the $52K in fines? If the fines never stopped its actually about $60K in fines. The solar company that installed the panels agreed to pay the fines if he lost so he did have some financial back up. Not sure if solar panel company will also pay his legal fees, but they should.

I like the idea of solar panels too, but I wish this homeowner had gone yo the board from the beginning to ask permission. They may have still said no, but that may have started a conversation where tge homeowner and company could educate the board and community on their advantages and addressed any concerns. Perhaps this could have been squashed five years ago and everyone would have saved time and money

When this has come up in my state, the usual objection was some gobbdygook about property values - I say that because solar panels are coming into wider use and no one can say for sure that a hone sale went down the tubes because the potential buyers didn't like that the house down the street had them. That's probably why our state passed a law last year that says the HOA can't ban them, but can establish reasonable rules on their placement.

Well, I would hope this HOA had some sort of appeals process - the initial no doesn't have to be the end. Instead people get mad and sue- sometimes that is necessary, but I prefer to try the process first because if I do go to court, I want to win going away. Especially if the board refused to listen to reason- they might not agree, but to dismisse the matter out of hand just because "we are the board and therefore we are" is being hard-headed

Not everyone is educated on this stuff, which is why homeowners who want them can start by making sure the board understands how panels work. It may be some people will have to make other arrangements if their lot doesn't face south ir there's already something there that can't be moved.

My HOA before jumping to conclusions that a HOA would deny any "green energy" options most likely would have allowed it. However, it would have involved rewriting the CC&R's and Bylaws to reflect the allowance of it. Plus we would have had to do more research on the matter to decide what would be the best technology and not look like an eyesore. I would not just take the Solar Panels salesman word for it. I think since it would effect ALL of the members we would want to interview various companies to approve them. Not all companies are equal.

Plus I would also like to talk to the Utilities department to make sure what they are for or against. Some set ups sell back the unused energy back to the utility department. Our local Utility may have an entire set up to install as well for that to happen. Another consideration.

The owner should have worked WITH the HOA for permission and sharing ideas. A good idea that would benefit many, should have been discussed on how best to incorporate it. Plus allow it in the documents. Technology changes especially "Green" tech. That is why many HOA's would have an issue approving some Green options as it is one of the fastest growing and changing technologies around.

All of this would have been avoided if ask permission than forgiveness in a HOA...

I wonder how much the passage of time and climate events influenced the outcome here.

It looks like it was a 5-2 decision by North Carolina's highest court. Do not quote me on this.

Four IMO rather big gun outside parties lawyered up and filed amicus curiae briefs:

(For defendants Farwig and Farwig)

Southern Environmental Law Center

"Solar Industry Businesses" (a kind of lobbying group?)

the Solicitor General of the state of North Carolina

(For the HOA)

Community Associations Institute (CAI). See CAI's brief on behalf of the HOA appears here: https://www.caionline.org/Advocacy/LegalArena/Amicus/Documents/2021/Belmont%20Association%2C%20Inc.%20v.%20Thomas%20Farwig%20Amicus%20Brief%20FINAL.pdf . In its brief, CAI took a swipe at Solar Industry Businesses, saying Solar Industry Businesses has conflicts of interest and "such should be considered in review of [SIB's] amicus curiae brief." CAI wants to talk about conflicts of interest, eh? CAI's general position was that the covenants are a contract and the lower courts interpreted the contract correctly.

I thought it came down to what authority does an architectural committee have when approving/disapproving requests.

The covenants in question did not ban solar panels - hence, could the committee ban them?

I believe that this is an issue many associations have and until it's taken to court - nobody really knows.

So allowing ONLY this homeowner and a his handful of his neighbors to install solar panels is the correct out come according to you.

The actual outcome with it going to court, which allows millions of people living in HOAs across the state to install solar is the incorrect outcome?

And to top it off, you would only allow it after it took years to change the CCR's, only certain vendors, and only certain technologies.

you really are something!

thanks for this! will have to read it.

Yes, that is a pretty good summary. Very few CCR's that Iv'e read in NC specfically address solar panels, so by default this court ruling pretty much allows solar panels everywhere.

but the sad part is HOA's will still continue to decine solar panels installs and only smart owners will be able to fight it.

Wrong. Ignore the above. One of the dissenting opinions (not the majority opinion) said this. The NC Supreme Court granted summary judgment to owners Farwig.

Yeah, really (seriously). Doesn't having as much fighting as possible over what covenants say tend to benefit CAI-affiliated attorneys? The NC Supreme Court ruling does seem powerful, given the North Carolina solar rights statute and how HOA covenants typically do not explicitly address solar. Now on solar at least, I expect somewhat less fighting between boards and owners.

Though your point that HOA boards will still make the wrong choices and dig into a bad position (abetted by CAI-affiliate attorneys?) is well taken.

Sorry to screw up your thread with my mistakes above.

you are free to not click on any topic and not discuss anything you do not want to. Just like people don't have to buy a home in an HOA, you dont' have to read or reply to anything you dont' like.

Several articles state the home owner was paying lots of fines to prevent his home from getting foreclosed on. It would be interesting to find out how much the HOA wasted on litigation. $50/day fine is pretty vicious. No wonder most people dont' challenge HOA fines, because they are so high they lead to bankruptcy for many.

I'm personally disappointed by this ruling. I know that everyone is pro solar and in theory it's a great thing to produce your own energy using your roof. Especially here in Florida where we have lots of sunshine.

Panels on the front of the roof are just plain ugly. Our community was built so all the houses have the same style, but many different types and floor plans. We are still trying, 20 years later, to keep things in the same style but moving on with the times. But then you put those ugly black panels all over the front of the roof and it just looks like crap. Nobody can tell me it improves the look of the house.

That's just cosmetic and probably seems silly. But my real issue is that the solar panel industry is so unregulated. Many of the companies are scams and will tell you anything to get you to buy. They make a lot of their money on the financing - not on the actual solar panels. People sign documents that add liens and second mortgages to their homes to pay for the cost of the panels and installation. The payback on the prices is not simply a few years - it may be 20 years. Technology is changing all the time and your solar panels may be out of date many years before you have finished paying for them. It's more complicated in Florida because of the hurricanes. Sometimes installing the panels on your roof voids the roof warranty.

The solar panel sales people get homeowners hyped up with how much electricity they are going to generate and how they are going to have zero electric bills. Does that ever really happen?

Our state statutes still allow HOAs to regulate placement of panels within certain guidelines. Our community says you can't do front of the roof and can do back and one side. Until we get sued, we will follow the statute and continue to not allow the panels on the front of the house. We successfully settled a case (lots of letter from attornies, didn't get to a case filed) with homeowners who were denied placement on the front of their house and started to do it anyway. The solar company ended up buying them new roof tiles for the front of their home.

I'm all for alternative energy and if you want to invest in solar for your home then that's great. But people who live in an HOA shouldn't be allowed to do anything they want.

I suspect that solar panels may look ugly because we haven't grown up with them. If they'd been the norm since we were children, "naked" roofs may be viewed as ugly instead. And there are options instead of the panels, such as photovoltaic shingles and windows, that will probably become more effective and available as the technology matures.

In general, if I'm forced to choose between aesthetics and functionality, I go with functionality. And solar doesn't just benefit the homeowner who installs it. It also takes some load off the grid. I expect that rolling blackouts will become more and more common along with increasing frequency of extreme weather events - and they will occur just when we need energy the most. For instance, during the Christmas "bomb cyclone", people were asked to turn down their heat because of fears of the grid going down - and it even happened in the Carolinas, not just here in the Great Frozen North where we're used to such things. Having enough people with solar installations may make the difference between keeping the heat and air conditioning on and doing without. And if worse comes to worst and the grid does go down, the folks with solar panels will be helping their grid-dependent neighbors with shelter and cooked food.

In addition to allowing solar installations, HOAs and COAs are going to need to reconsider other things that are mostly for looks, such as irrigation systems, fountains and pools, and lawns. People seem to love their lawns, and CC&Rs often require homeowners to take care of theirs. But lawns need water and lots of it. People who live in states served by the Colorado River are going to have to get serious like, right now. Xeriscaping may also appear ugly to those who are used to lush, green, golf course lawns, but if you have to chose between your lawn and having enough water to drink and bath...?

So I think it's a good thing if community associations are forced to reconsider some of their covenants and restrictions, and decide if they make sense in our current reality or if they're a remnant from a "reality" that maybe never existed and was mostly wishful thinking.

I do agree the solar sales industry is full of liars and scammers, more so than other in home sales jobs, but not by much and most other in home salesmen don't have you sign a 20 to 30 year predatory loan where it's claimed to be a low 2% interest, but doesnt' tell you there are loan origination fees that make the effective apr more like 10%.

That works both ways – some people forget or choose to ignore they’re in a HOA, which means there are regulations they’re legally obligated to follow. I agree some HOA boards do whatever, but they don’t fall out of the sky – HOA boards are made up of HOMEOWNERS. If you don’t like their approach, you can run against them – and yes, I know that’s easier said than done in some communities because some boards are power-hungry and will push back and/or everyone else says “meh” and does nothing. When HOA boards “break the law”, maybe the reason for that is that the other homeowners didn’t give a damn and let it happen – until they had to. Thousands of dollars in legal bills or a special assessment to pay for years of underfunding reservices in the name of keeping assessments “low” will do that.

In the meantime, why is it so bloody difficult for some people to read the documents and ask a few questions before doing whatever because “it’s MY HOUSE?” It’s just like my mother said – the best way to keep some people ignorant is by writing down the information and handing it to them because they’ll never read it. This has been a good conversation because I learned some things about solar panels that I wasn’t aware of, and I suspect others feel the same. Now they’ll have a general idea of how they might respond if this comes up in their community – by doing a little research, they might head off years of lawsuits, thereby funding the attorney's college fund for their kids and grandkids (or retirement).

This is not to say I’m automatically on the board’s side, but really, what in the hell did the homeowner think would happen if he went ahead and started installing the panels without permission? People also forget that what flies in Florida, or Texas, or California or wherever you live doesn’t necessarily apply all over the USA. Some states are further ahead on this issue than others, which is why it would be nice for people to slow down and think a moment.

I mentioned earlier that our state passed a law last year on this issue – here, a homeowner (or however many are interested) must submit a petition to allow panels IF the bylaws specifically prohibit or restrict them, or the board denied the request. They also have to provide detailed information about the project – the home’s location, color of the system, where the panels will be located on the roof, screening, etc. There are also parameters that have to be met regarding safety, being flush with the roof, warranties, etc. The homeowner has to get the lesser of 65% of his/her neighbors or whatever’s required in the bylaws to pull this off and then the board MUST sign off on the project.

I like what one expert said from an article on the subject – it doesn’t take authority away from the board, but residents do have an option to pursue – the majority of the people living in the community have to support the project. If the homeowner really wants this, he/she can do the work to make it happen.

I too looked at the Florida statute and am thinking the same thing. It seems a fact that these statutes, in whatever state, were written to make it hard for boards to say no to solar. I think boards need to get into the mindset that the appearance of the installation largely has to be set aside.

flush panels dont' make them any safer, they make them hotter which decreases performance. gettting 2/3rd of owners to change CCR is a pretty common percentage so I dont really understand why the Indiana legislature even made up the law, seems like it doesnt do much.

From the OP:

The second exception is even more difficult to quantify. It allows an Association to prohibit a solar installation if that
prohibition does not “have the effect of preventing the reasonable use of a solar collector.” Here, the Court held that the association’s decision to deny the solar panels on the front roof did have the effect of preventing the reasonable use of a solar collector and granted summary judgment in the homeowners’ favor.

This is how I understand it. While an HOA can control location they cannot say no to any and every location especially when the best location is on the front of a home.

States vary widely about solar and HOAs. In CA, the law even permits solar on condo common area roofs with many caveats. Our HOA attorney and, I should think most in states that permit them, already have a template and sample ARC Guidelines, etc.

Anyone here who is interested needs to learn about their own state and municipality.

(My spouse & I installed solar panels on our detached home's roof in about 1975 for hot water including our redwood hot tub. Of course, it was redwood--this is in Santa Cruz CA & the panels still function)