Michigan Homeowners’ Energy Policy Act Takes Effect April 1, 2025: Does Your HOA Have a Solar Energy Policy?
On July 8, 2024, the Governor signed the Homeowners’ Energy Policy Act, MCL 559.301, et seq. (“HEPA”), which becomes effective on April 1, 2025. The HEPA is intended to limit a homeowners association’s ability to restrict or prohibit an owner from installing solar panels and other energy-saving devices. In addition, the HEPA also requires each homeowners association to adopt a solar energy policy that contains a number of provisions required by the statute. This article focuses on the Act’s requirement to adopt a solar energy policy, including what the various provisions mean.
Does Your Association Need to Comply with the Homeowners’ Energy Policy Act?
As discussed in more detail in a previous article, HB 5028 Passes: A Michigan HOAs’ Guide to Solar Panels and Energy-Saving Improvements under the Homeowners’ Energy Policy Act, the HEPA uses the term “homeowners association” without any explanation of whether the statute only applies to homeowners associations or whether it also applies to other community associations such as condominium associations, cooperatives, or summer resort associations. For this article, we will focus on homeowners associations because the HEPA clearly applies to such associations. To discuss whether a condominium association, co-op, or summer resort is subject to the HEPA and the requirement to adopt a solar energy policy, please contact a community association attorney.
Additionally, Section 13 of the HEPA, MCL 559.313, states in part that the statute does not apply to the installation of solar panels on a shared roof. A shared roof is “a roof that serves more than 1 home or unit, including, but not limited to, a contiguous roof that serves adjacent homes or units.” MCL 559.303(g). The majority of homeowner associations are single-family homes, meaning it is unlikely that the shared roof exception would apply.
The Written Solar Energy Policy
Under Section 9 of the HEPA, MCL 559.309, each homeowners association is required to adopt a written solar energy policy statement within one (1) year after the effective date of the statute. The effective date of the Homeowners’ Energy Policy Act is ninety (90) days after when the Michigan Legislature adjourned the 2024 session sine die, or April 1, 2025. Accordingly, the clock is ticking for Michigan HOAs to adopt a written solar energy policy by the deadline of April 1, 2026. MCL 559.309 further identifies the provisions that the written solar energy policy must include and what the policy may not include.
What Must Be Included in the Written Solar Energy Policy?
Section 9(1)(a) and (f) of the HEPA identifies a number of statements that must be included in the written solar energy policy:
(a) The policy must include the standards established under this act to be enforced by the homeowners’ association.
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(f) The policy must include the following statements:
(i) That the approval of an adjacent home or unit owner is not required to approve a member’s application to install a solar energy system on the member’s home or unit.
(ii) That the homeowners’ association will not do any of the following:
(A) Inquire into a member’s energy usage.
(B) Impose conditions that impair the operation of a solar energy system.
(C) Impose conditions that negatively impact any component industry standard warranty.
(D) Require postinstallation reporting.
(E) Require a fee for submitting an application to isntall a solar energy system above that which it assesses for other applications related to a change to the property.
(F) Prohibit a member from resubmitting a written application to install a solar energy system after a written application submitted after the effective date of this act was denied by the homeowners’ association.
(iii) That the homeowners’ association will not deny a member’s application to install a solar energy system because of the identity of the entity that owns the solar energy system or financing method chosen by the member.
(iv) That a homeowners’ association may deny an application to install a solar energy system or require the removal of a solar energy system if 1 or more of the following apply:
(A) A court has found that the installation of the solar energy system violates a law.
(B) The installed solar energy system does not substantially conform with the member’s application to install the solar energy system as approved by the homeowners’ association.
(C) The homeowners’ association has determined that the solar energy system will be installed on the roof of a home or unit of the member requesting installation and 1 or more of the following apply:
(I) The solar energy system will extend above or beyond the roof of that home or unit by more than 6 inches.
(II) The solar energy system does not conform to the slope of the roof and has a top edge that is not parallel to the roof line.
(III) The solar energy system has a frame, support bracket, or visible conduit or wiring that is not silver, bronze, or black tone that are commonly available in the marketplace.
(D) The homeowners’ association has determined that both of the following apply:
(I) The solar energy system will be installed in a fenced yard or patio rather than on the roof of a home or unit.
(II) The solar energy system will be taller than the fence line.
(v) That a member shall comply with state and local building codes and permit requirements in the replacement, maintenance, installation, or operation of an energy-saving improvement or modification or the installation of a solar energy system.
(vi) That both of the following apply:
(A) A member who wants to install a solar energy system in the member’s home or unit shall comply with the application requirements under section 11(1).
(B) A member may resubmit a written application to install a solar energy system in accordance with section 11(4).
What Cannot Be Included in the Written Solar Energy Policy?
In addition to the mandatory provisions identified in Section 9(1)(f) of the Homeowners’ Energy Policy Act, there are also a number of provisions that cannot be included in the written policy. These include:
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- The policy may not prohibit elements of the solar energy system from being installed on a roof face. MCL 559.309(1)(b).
- The policy may not require that a specific technology be used for the installation of the solar panels, such as requiring solar shingles rather than traditional solar panels. MCL 559.309(1)(c).
- The standards identified in the policy cannot result in a more than 10% reduction in the production of electricity or increase the total cost of installation of the solar system by more than $1,000.00. MCL 559.309(1)(d).
- The policy cannot include a provision that contradicts the Homeowners’ Energy Policy Act. MCL 559.309(1)(e).
What Purpose Does the Written Solar Energy Policy Serve?
There will certainly be a number of homeowners associations that adopt a solar energy policy because of the statutory requirement and think nothing more of it. However, the policy does serve an important purpose. Solar panels are becoming more prevalent with decreasing costs, increasing efficiency, and tax credits. With the HEPA preventing HOAs from banning solar panels, an association’s written policy is a helpful guide for owners to submit a proper request to install a solar panel and for the association’s board of directors or architectural review committee to review and approve or disapprove the request.
With a written solar energy policy that complies with the HEPA, an owner should understand that they are still required to submit a written request to the association to install a solar panel. As required by Section 11(1), MCL 559.311(1), a homeowner’s application must include (1) their name, (2) the street address where the solar panel will be installed, (3) the name and contact information of the installer of the solar panel, (4) an image of the solar panel layout on the home, and (5) a description of the solar panel system.
After receipt of the homeowner’s written application, the association can use the written solar energy policy to review the application. Specifically, the association can verify whether the solar energy system (1) extends above or beyond the roof by more than six inches, (2) does not conform to the slope of the roof and has a top edge that is not parallel to the roof line, or (3) the solar energy system has a frame, support bracket, or visible conduit or wiring that is not silver, bronze, or black tone commonly available in the marketplace. If the homeowners association, during its review of the application, determines that any of these three elements are present, then the association is permitted to deny the application. For a homeowner’s application to install a solar panel in a fenced yard, the association is permitted to deny the application if the solar panels will extend above the fence line.
The written policy will also help the homeowners association avoid pitfalls in the application review process. For example, the association cannot require the homeowner to obtain their neighbors’ approval or require a fee above what is customarily charged (if any) for modification requests. Further, the association would be aware that it cannot impose conditions on the installation of the solar panels that impair the operation of the solar panels or negatively impact any of the solar panel’s component’s standard warranty. If an owner submitted a request to install a solar panel that was previously denied by the association, then the association must allow the owner to resubmit a new application for review.
Having and following a written solar energy policy can save owners and homeowners associations time, money, and headaches by ensuring that owners’ written applications contain the required information, the homeowners association properly reviews the written application, and the solar panels are installed in conformity with the HEPA.
We Drafted a Written Solar Energy Policy. Now What?
The governing documents for most homeowners associations require that new rules, regulations, and policies be provided to owners before they become effective. The HEPA contains a similar requirement, albeit with a deadline: After an association adopts a written solar energy policy, it is required to “[m]ake a copy of the policy available to a member within 30 days after the adoption of the policy, or on request.” MCL 559.309(2)(a). Additionally, homeowners associations with a community website must post a copy of the written policy on the website: “If the homeowners’ association maintains an internet website, post a copy of the policy on its website.” MCL 559.309(2)(b).
Are There Penalties for Not Adopting a Written Solar Energy Policy?
A homeowners association may face a number of potential penalties if it does not adopt a written solar energy policy by April 1, 2026. First, a homeowner has a right under Section 15, MCL 559.315, to bring a lawsuit against a homeowners association for a violation of the HEPA and, if successful, recover their attorney fees and costs from the association. Because a homeowners association must adopt a written solar energy policy, its failure to do so by April 1, 2026, could permit a homeowner to file a lawsuit to force the association to adopt the policy and recover their attorney fees and costs.
In addition to the potential for a lawsuit, an owner may install solar panels without needing to seek approval if the written solar energy policy is not adopted by April 1, 2026. Under MCL 559.311(2): “If a homeowners’ association fails to adopt the policy within the time period specified under section 9(1) . . ., a member may proceed with the installation of the solar energy system.” To avoid this situation, a homeowners association should adopt the written policy by April 1, 2026.
Conclusion
The Homeowners’ Energy Policy Act is unlikely to be well-received by many homeowners associations because it imposes an onerous regulatory scheme and takes away the association’s architectural authority and discretion with respect to solar panels. Unless the HEPA is amended or repealed by the Legislature in the future or limited by the courts, homeowners associations in Michigan should nonetheless comply with the HEPA and adopt a written solar energy policy to avoid potential liability. Because of the numerous requirements that must be included in the written policy, homeowners associations should contact an experienced community association attorney to draft or review the written policy.
Michael T. Pereira, Esq., is an Attorney with Hirzel Law, PLC and focuses his practice on general counsel matters and document amendments. Mr. Pereira graduated from the University of Detroit Mercy School of Law in 2018, where he graduated magna cum laude and second in his class. Following graduation from Detroit Mercy, Mr. Pereira spent nearly three years with the Michigan Court of Appeals as a research attorney and as a law clerk to Judge Patrick M. Meter and Judge Anica Letica. Best Lawyers: “Ones to Watch” recognized Mr. Pereira in 2024 for professional excellence in real estate law. He may be reached at (248) 478-1800 or mpereira@hirzellaw.com.
