Condominiums can reap the benefits of solar just like everyone else. Compared to a traditional installation at a single-family home or a small business, there’s more complexity to understand before deciding if solar is right for your condo building.
You and your association need to know several things to see if you can make solar go smoothly. These include how ownership of the roof is split, how the system is paid for, who files and collects the tax benefit, what the local utility regulations are, and what the best system design will be for your building. This guide will walk you through each, so you can decide on the next steps.
Roof ownership and approval
The homeowner or the business owns the entire roof and has the authority to decide singlehandedly.
Each unit typically owns a proportional share of the roof relative to their ownership of the building. Deciding on solar typically involves Board approval or a minimum vote from condo owners, the details of which you can find in your condo bylaws.
Payment and Taxes
One person or entity typically pays for and receives the tax benefits. The biggest tax benefit is called the federal Investment Tax Credit (ITC), which is a total deduction of the amount you owe, otherwise called tax liability, adding up to 30 percent of the gross cost of the solar project.
Condo owners cover costs for maintenance, repairs, and new projects like solar panels through monthly fees paid to the association. If reserve funds are not large enough to pay for a solar array, the condo may need to conduct a special assessment to determine the amount of funds needed to cover the system.
As a nonprofit, the condo must consider that it is ineligible for the ITC. Condo owners are considered legal owners of the roof, so they can file individually based on their share of the cost of the system.
Associations should keep in mind that condo owners each have a different tax liability. This is typically only a concern if individuals have little to no taxes, which is uncommon.
Traditional set up: With a few exceptions, most utilities don’t let you build a system that produces more electricity than what you expect to use annually. This is typically not a concern for homes.
Condo: If the solar array produces less than or equal to what is consumed through the common area meter, we would just connect or “pipe” it to that one meter. If the array produces over 100 percent offset and you stay connected to just one meter, you would have to sign up for a program called Community Solar. However, this can lead to extra costs and a delayed installation timeframe. An alternative is to connect to multiple meters from tenants or condo owners that have high electricity consumption. For another option, see below.
System design features
Traditional set up: A typical installation will connect to one meter.
Condo: A condo installation can connect to one or more meters.
Additional: In most circumstances, we suggest connecting to one meter. This is the most efficient way to ensure your project is installed and operating on time and without extra costs. For more details regarding the ideal configuration for your condo association, please see the chart below.
Read our Guide to Go Solar to be well informed about the steps to take to go solar.