In some areas, Homeowners Associations (HOAs) can present significant barriers to homeowners’ ability to install solar.
Before Texas enacted protective solar access laws that limited what restrictions HOAs could place on solar installations in their neighborhoods, HOAs meant a lot of frustration. Speaking to the New York Times in 2009 when he was chief executive of Houston-based residential solar company Standard Renewable Energy, John Berger (now CEO of Sunnova Corporation), said HOA prohibitions had cost SRE over $1 million in business.In Missouri, a state without policies protecting from HOA solar restrictions, there are a number of cases in court where HOAs are butting heads with homeowners that install solar.
As a solar contractor, the extent to which HOAs impact your business is dependent on your state’s laws and the HOA bylaws in the neighborhoods you target. However, there are a number of strategies you can employ to help ensure HOA approval for your customers’ PV solar systems, regardless of where you do business.
In this article, we discuss techniques compiled from interviews with solar contractors with extensive experience working with HOAs and online research to help ensure successful outcomes on projects in HOA communities—and guide your prospective customer through the process as well.
How an HOA Can Impact Your Solar Business
HOAs are neighborhood organizations that create and enforce rules for houses or condominiums in established communities. Solar Power World states that “a major directive of the HOA is neighborhood uniformity and/or a high standard of appearance for each property.” HOAs’ concerns, and resulting rules, about solar installations tend to relate to how PV panels will affect the look of neighborhoods or property values.
These rules can impact a homeowner’s efforts to go solar. A significant proportion of American homeowners interact with an HOA: over 351,000 HOAs in the U.S. regulate about 40 million households or 53% of owner-occupied households. Therefore, there is a good chance that your prospect needs to work with one. However, about half of U.S. states have laws preventing HOAs from denying solar for aesthetic reasons, so the impact on your business is partially dependent on where you operate.
Getting Solar Approval from an HOA
It is helpful to understand the typical process for getting approval for a solar installation from an HOA so that you are better able to guide your customer through it. Usually, a customer requests an application from their HOA or gives the contractor permission to do so. While there are some customers who choose to fill out the application and send it in themselves, others prefer that the contractor do this.
Mike Busby, Co-Founder & President of Victory Solar, a leading residential and commercial installer in Texas, spoke with Aurora about his company’s extensive experience working with HOAs. He states that his company does all the HOA paperwork on the homeowner’s behalf, only getting the homeowner involved if they have to.
Bobby Custard, Solar Consultant for Pur Solar & Electrical, an Arizona-based contractor with over 40 years of electrical contracting experience, also shared his insights about interacting with HOAs. He says that after Pur Solar has given the customer everything they need to review and sign, the company notifies the HOA when they begin the permitting process. They send the HOA a copy of the plans, the proposal, and images of what the project will look like.
If the application is approved by the HOA, you can move forward with the installation. If not, you should understand the applicable laws in your state in case you are able to help your customer appeal the decision.
There are a number of best practices to keep in mind that may help make the process of getting HOA solar approval as easy as possible and increase the likelihood of a successful outcome.
1. Know Your State’s Laws
“Solar access” laws that protect homeowners’ rights during the HOA solar approval process have been adopted by many states, including California, Utah, and Florida. Given that you may be the one educating your customers about their rights in this respect, it is important to know your state’s existing laws, whether provide protections from HOA solar restrictions, and what forms they take.
Solar access laws prevent HOAs from prohibiting solar panel installations or having contracts that restrict homeowners from installing them. However, HOAs can usually make certain requests about a system, as long as they don’t make the proposed solar system less effective or more expensive. Often HOAs are allowed to place certain restrictions on systems, like retaining the right to influence design elements of a rooftop solar array, such as requiring that all electrical wiring be placed out of sight.
California has had The Solar Rights Act since 1978, which has helped encourage the growth of solar in the state and is the basis for many other states’ protective laws. It includes protections that limit HOA ability to pass prohibitive laws but allows an HOA to impose “reasonable restrictions” on solar energy systems. These restrictions are currently limited to ones that don’t increase the cost of a proposed system by more than $1,000 or decrease its potential performance by more than 10%.
Under this law, a homeowner does have some responsibility to their neighbors when they seek to go solar. For example, in multifamily dwellings with common roof areas an applicant must notify each owner in the building about a proposal. Additionally, they might also be required to have homeowner liability coverage and provide proof of this to their HOA annually.
Arizona has solar access laws that are similar to those of California but with less stringency and specificity about what an HOA can and cannot do. For example, the “reasonableness” of HOA solar installation restrictions is decided on a case-by-case in the courts.
However, Custard explains that protective Arizona laws have made the HOA approval process very easy for Pur Solar & Electrical. 60-80% of Pur Solar’s installations involve HOAs, and they have never been rejected. He states that even when his company installed several systems near upscale private golf courses, they were able to install the panels facing the fairway for one and facing the putting green for another.
The actual provisions of solar access laws vary widely by state and comprehensive information about state and local rules is available at the Database of State Incentives for Renewables and Efficiency (DSIRE).
2. Be Your Customer’s Guide Through the HOA Approval Process
Functioning as your prospect’s expert on how to navigate their HOA’s solar stipulations and state laws from the beginning of the sales process can go a long way towards winning the deal. Find out the HOA’s rules about PV panel installation early, particularly any rules they may have regarding design and placement. These can impact aspects of the installation process, such as system price, even if your state has solar access laws.
Gauge your prospect’s level of familiarity with this topic and make sure they are aware of their HOA’s rules as well as their state’s laws. “Many homeowners are not aware of their rights,” says Custard.
He states that a homeowner may have just bought their house or might be new to the area; “they may have just gotten their HOA rule book, and they’re trying to figure out what direction they can put their car or what their yard has to look like. So they’re a little bit overwhelmed and gun shy.” Victory Solar’s Busby adds that while some people know how the approval process works or are even on their HOA board, others are completely unaware of how it works.
Custard explains that prospects are often concerned about what their HOA will say regarding installing solar. Therefore, his team makes sure to show the homeowner information about Arizona’s HOA solar laws via emails or printed articles. As a result “the prospect feels much more comfortable moving forward knowing that if they put down a deposit and get the ball rolling with solar, the HOA isn’t going to be throwing speed bumps in the path.”
3. Have a Streamlined HOA Application Process
It helps to show your prospects that you and your team are aware of how to achieve an expedited approval process. For example, there are ways you can reassure a prospect’s HOA and address their concerns. This can be done by demonstrating how PV panels can increase property values and providing examples of successful installations you have done for similar neighborhoods and home types.
Busby notes that Victory Solar has a streamlined process in place to ensure HOA solar approval given that they deal with HOAs on about 90% of their projects. He told us, “we probably submit too much paperwork but have a 100% approval rate. The paperwork has got to be very detailed and ironclad. An HOA can rarely oppose that.”
Busby also asserts that an important part of a smooth HOA solar approval process is having an operations team that gets paperwork together efficiently. He states, “you have to make the right hires within the operations group of your organization because they’re just as important as your roof crew. If they’re fast on the paperwork approval it flows down through every part of the operations side. As a result, we’re very quick. We install systems within 30 to 40 days while the industry average is 150 days.”
Be Prepared to be Creative and Flexible
HOA rules may require that you adjust your approach and think outside the box, even in a state with solar access laws. Victory Solar was able to secure approval for a client with a Spanish tile roof whose HOA had already rejected ground mount system proposals from three different contractors. They did this by suggesting a ballasted ground mount system with a black mesh fence screen to obscure the system from view. It included removing the grass and putting in white rock for a flat roof commercial system on the ground and ensuring the system was below the fence line.
Busby also describes one customer in an affluent neighborhood where the HOA wanted the solar system to be installed out of view. Noticing that the customer had an old unused concrete tennis court and, Victory suggested the customer repurpose the court as a solar pad for a ballasted ground mount solar system.
You may also consider adjusting the equipment you use. Custard talks about the benefits of using solid black panels: “HOAs very much prefer a solid black panel with a black screen instead of a white paper backing with a silver frame. When we use these kinds of panels they are more receptive to the installation and are less likely to come back with any questions, even in places that have really specific, stringent rules.”
4. Educate Solar Prospects and HOAs
In an effort to improve the HOA approval process and help ensure solar’s growth, you may look for opportunities to provide educational information to both prospects and HOAs. Laura Ann Arnold of the Indiana Distributed Energy Alliance, a state that currently has a host of solar related HOA challenges, says that “the solar industry as a whole needs to stay vigilant on HOA solar issues and work to educate the public as more people want to go solar.”
This may mean providing homeowners with information about HOA prohibitions and restrictions regarding solar in order to encourage them to ask questions before they buy a home. It may also mean seeking ways to educate HOA boards about removing outdated strictures or easing overly prohibitive rules. Arnold describes how some boards don’t understand the impact of certain rules like limiting solar to the back of the house or away from the street when it faces north. “There is a lack of understanding about the technology and the economics,” she declares.
Employing best practices when working with a customer and their Homeowner’s Association can help you offer the best customer service and increase the likelihood of closing the sale. A key part of this can be coming from a position of cooperation and consensus, which can lead to an expedited approval process. As Custard explains, “as long as you’re civil with an HOA so that you don’t end up on their radar as a ‘problem person,’ they’re much more likely to help instead of hinder the process.”