It doesn’t take a crystal ball to know that one thing is certain, electricity costs will continue to rise. Historically, over the past 20 years or so, commercial tariff rates have risen 5% per year on average. We can anticipate similar increases over the next 20 years or so, at a minimum.
Given this, I think another thing is certain. Community associations, particularly in states such as California with ample sunlight and a State government which has identified alternative energy as an important public interest, will become increasingly interested in installing their own solar power projects. In response, I predict that commercial solar system installation companies will form funding partnerships, or will create their own funding entities, to establish solar lease and power purchase programs to specifically address the needs of community associations. I’m out there advocating for that, and will be happy to link here to any solar installer who does so.
I also predict that as photovoltaic (PV) systems become smaller and more efficient, multi-unit community associations such as condominium associations will want to expand their solar energy systems from supplying power for common areas to supplying power for individual units as well. There is some precedent for this. As opposed to installing a separate net meter and inverter for each individual unit, virtual net metering (which allows for allocation of credits from one solar system across multiple accounts on site) are currently available in the State of California (albeit for affordable/low income housing projects only). In 2008, the California State Senate approved a bill (SB 1460) which would have required utilities to establish virtual net metering programs for all multifamily residential projects (not just affordable housing), but it languished in the legislature. Given sufficient political will, however, this could change. Community associations will need to commit themselves to applying pressure to our state legislature if they want this to change, though.
What should board members of community associations who are interested in solar power be doing now to prepare? In my opinion, they should be giving careful consideration to their association’s architectural review guidelines and rules as they pertain to solar panel installations in their community. At a minimum, compliance of the governing documents with California’s Solar Rights Act should be confirmed. In addition, to the extent that the association’s architectural rules impose conditions or restrictions on solar power installations such as prior approval requirements, restrictions on placement of equipment, setback requirements, height restrictions, restrictions pertaining to architectural style, etc., consideration should be given to revising those rules to ensure that they will not hamper the association’s contemplated installation of its own solar system.
And, last but not least, consider consulting with an attorney like me, who has an interest in facilitating solar energy projects for community associations, and experience helping associations successfully navigate the kinds of complex contractual risk management and insurance issues such projects will entail.