Hawaii Bar Journal (May 2013)
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from 108.7 solar rights megawatts laws and tax (“MW”) were incentives to utility pro- installed in 2012 – curement mechanisms mandat- enough to provide electricity ed by the Public Utilities Commission, to approximately 37,000 homes.4 such as the Net Energy Metering and Larger, utility scale solar PV facilities in Feed-in Tariff programs. Zoning and Hawaii now range in size up to six MW.5 permitting laws governing larger utility And in its 2012 annual survey, the Solar scale solar PV projects have also played Energy Industries Association ranked an important role. by Douglas A. Codiga Hawaii the seventh-best state in the The rapid growth of solar energy is nation for solar energy, noting that supported by foundational Hawaii cli- Solar energy – especially photo- Hawaii gets a greater percentage of elec- mate and clean energy laws and policies. voltaic, or PV – has emerged as an tricity from solar than any other state.6 Following the launch of the Hawaii important source of renewable energy in Under Hawaii law, “renewable Clean Energy Initiative (“HCEI”) in Hawaii, driven by its relative cost-effec- energy” is defined to include “energy January 2008, a landmark agreement tiveness, high levels of public accept- generated or produced using . [t]he (commonly referred to as the Energy ance, and supportive statutory and regu- sun[.]”7 This broad statutory definition Agreement) was signed by the Hawaiian latory law and policy. Although renew- encompasses different types of solar Electric Company, Inc. and the State of able energy production in Hawaii is pri- energy devices and technologies. Solar Hawaii. As well as including measures marily from wind, geothermal, and bio- water heating devices, for example, are to advance solar energy, the Energy mass, Hawaii has recently experienced commonplace rooftop fixtures that pro- Agreement established the goal of “70 rapid and unprecedented growth in solar duce hot water primarily for residential percent clean, renewable energy for elec- generation.1 Hawaii ranks first in the use. Concentrated solar power, or CSP, tricity and transportation by 2030.”9 nation with regard to installed solar uses a parabolic trough to concentrate Consistent with this HCEI goal, Act water heaters and third in the nation for sunlight onto a tube filled with a working 155, signed into law in 2009, mandates cumulative installed solar PV capacity fluid to generate electricity.8 Many that by 2030 forty percent of net elec- per capita.2 Rooftop distributed solar Hawaii solar energy laws focus on solar tricity sales by electric utility companies PV has become one of the state’s leading PV, which uses silicon panels to convert in Hawaii shall be from renewable elec- industries, accounting for almost twenty- sunlight directly to electricity. These trical energy, and energy efficiency six percent of all construction expendi- laws, which have contributed to the measures shall cause the equivalent of a tures in 2012.3 Solar projects totaling recent growth of solar energy, range thirty percent reduction in energy use10 – 4 May 2013 HAWAII BAR JOURNAL thus requiring seventy percent clean The legal protection afforded by seek to enforce the law by litigating energy (i.e., renewable energy and ener- section 196-7 is available only to single- against their associations due to time, gy efficiency) by 2030 as a matter of law. family homes and townhouses, however, expense, and similar considerations. Accordingly, Part V of Chapter 269, and not to multi-story or high-rise con- Hawaii Revised Statutes, requires each dominiums or apartments with multiple Solar Devices on Project Common electric utility to establish Renewable units. Under Hawaii law, “townhouse” Elements Portfolio Standards (“RPS”)11 of ten per- means “a series of individual houses In addition to individual rooftops, cent of its net electricity sales by having architectural unity and a com- homeowners may place solar energy December 31, 2010; fifteen percent by mon wall between each unit, provided devices on a common element (e.g., December 31, 2015; twenty-five percent that each unit extends from the ground building rooftop, parking structures, or by 2020; and forty percent by 2030.12 to the roof.”17 Condominium and apart- grounds) or limited common element Solar energy may contribute not only to ment buildings may lack individual units (e.g., individual unit lanai area) of the achievement of these RPS requirements, that extend from the ground to the roof. project upon obtaining consent of the but also to compliance with Hawaii’s In addition, the rights afforded by this association. The association must con- landmark climate change law, Act 234, law are available only to owners and not sent, however, if the unit owner agrees in which requires statewide reduction of renters of homes or townhouses. The writing to comply with the association’s greenhouse gas emissions to 1990 levels owner seeking to install the device must design specifications for the installation by the year 2020.13 ensure that it is in compliance with the of the device, engages a duly licensed The purpose of this article is to pro- association’s rules concerning solar ener- contractor to install the device, and pro- vide a brief overview of selected Hawaii gy devices and register the device with vides a certificate of insurance naming solar energy laws, with a focus on impor- the association within thirty days of the association as an additional insured tant recent developments and issues, or installation. on the homeowner’s insurance policy “hot topics.” A comprehensive discus- Consistent with the foregoing, sec- within fourteen days of the association’s sion of the many detailed aspects of the tion 196-7 also requires associations to approval of the solar device.20 The various laws and policies governing solar adopt rules by December 31, 2006 con- owner – and each successive owner – energy is beyond the scope of this article. cerning the placement of solar energy shall be responsible for costs arising from Instead, selected statutes and regulatory devices. The rules are to facilitate the damage to the device or to the common proceedings are surveyed in an effort to placement of solar energy devices, and elements, limited common elements, and provide an introductory overview and accordingly must not impose conditions adjacent units;21 shall maintain insurance examination of the current critical issues or restrictions that render the solar sys- covering these obligations and name the likely to shape the growth of solar ener- tem more than twenty-five percent less association as an additional insured;22 gy in Hawaii in the years to come. efficient or increase the cost of installa- and shall remove the solar energy device tion, maintenance, and removal of the if necessary to allow the repair, mainte- Right to Install Solar Energy solar system by more than fifteen per- nance, or replacement of the common Devices on Homes and cent. Nor may the association assess or elements or limited common elements.23 Townhouses charge any fees, or require an encum- If a material or labor roof warranty Under Hawaii law, the covenants, brance on title, related to installation of exists at the time the common element bylaws, and deed restrictions of an asso- the solar energy for the placement of or limited common element roof area, ciation14 of owners of single-family any solar energy device.18 the homeowner is required to obtain homes or townhouses generally cannot The failure of associations to timely written confirmation that installation of bar the installation of solar PV systems adopt such rules, in compliance with the the device will not void the roof warran- and solar water heaters. Section 196-7, statutory requirement of December 31, ty, and the owner must provide the asso- Hawaii Revised Statutes, “Placement of 2006, has been identified as a potential ciation with a copy of the confirma- solar energy devices” (“section 196-7”), barrier to the exercise of the solar rights tion.24 provides that “no person shall be pre- available under section 196-7. During Like homeowners, the association vented by any covenant, declaration, the 2013 session of Hawaii Legislature, itself may install solar energy devices in bylaws, restriction, deed, lease, term, for example, a bill was introduced to project common areas under Hawaii provision, condition, codicil, contract, or amend section 196-7 to require the law. Section 514A-13.4, Hawaii Revised similar binding agreement, however rejection of a condominium association’s Statutes, provides that, regardless of the worded, from installing a solar energy biennial registration application, and declaration of the residential develop- device on any single-family residential loss of its tax exempt status, upon the ment project, or its bylaws, an associa- dwelling or townhouse that the person association’s failure to timely submit the tion’s board of directors shall have the owns.”15 Any contrary lease or contract required rules.19 Reliance upon section authority to install or cause the installa- provision shall be void and unenforce- 196-7 may also be reduced to the extent tion of solar energy and wind energy able.16 association members are reluctant to devices on common elements of the 6 May 2013 HAWAII BAR JOURNAL project.25 The association may also lease or license the common elements for the installation of solar energy devices and wind energy devices on the common ele- ments of the project.26 The solar or wind energy device installed on a com- mon element of the project shall not be deemed to impair or diminish the inter- est of the owners in the common ele- ments, as long as the installation “does not directly affect any non-consenting unit owner.”27 The statute defines the term “directly affect” to mean the instal- lation of the device in a manner which Your Local Bond Specialist would “specially, personally, and providing License, Notary, adversely affect an individual apartment and Bail bonds in Hawaii owner in a manner not common to the for more than 30 years.