The thought of adding solar panels to a multi-unit condominium building may have once seemed formidable. I want to debunk the myths associated with generating solar power on condo buildings. While a little more challenging than a single-home residence, putting solar on your condominium may be more realistic and financially advantageous than you once thought.
Typically, a multi-unit condominium building has a Homeowner Association (HOA) or condo management association that manages the appearance of the property and maintains the common areas. HOAs are typically incorporated and regulated as a non-profit corporation. HOA fees generally include common area utilities, landscaping, snow removal, exterior building maintenance, and a master insurance policy. However, HOA fees can also include major capital improvements, like the purchase of a solar electric system.
One of the largest incentives for a solar electric system is the Residential Solar Investment Tax Credit. This is a personal federal tax credit for residential installations where a taxpayer may claim a tax credit of 30% on qualified solar electric expenditures. Since HOAs are set up as non-profit organizations, you would think they would lose out on tax credit incentives. This is not the case. According to SEIA, when the condo management association “spends money on installing qualified solar property, each member of the association can claim the residential solar tax credits on his or her share of that spending.” The condo management association must be eligible as a HOA under section 528(c)(1) of the tax code and most of the units in the building must be owner occupied to qualify.
In general, this works the same for a state tax credit for solar power systems. In Massachusetts, taxpayers can receive a 15% personal tax credit, up to $1,000, on eligible solar expenditures to the owner or tenant of a residential property. Massachusetts state regulations state that “an individual… who is a member of a condominium association with respect to a condominium which he or she owns, may claim a proportionate share of the renewable energy source expenditure of such condominium association or cooperative housing corporation. A cooperative housing or condominium unit will be treated as a “principal residence” for purposes of the $1000 credit limitation.”
Tax credits are only one of many solar incentives that condo management associations and HOAs can leverage. Coupled with rebates and Solar Renewable Energy Credits (SRECs), it has never been a better time to make an investment in solar power. We are currently working with several condominiums in the metropolitan Boston area and the economics of purchasing a system are excellent. In the past, HOAs thought the only way they could benefit from solar power is a leased system. If condominiums unit owners can purchase a solar energy system, the payback on their investment is even better.
Brightstar Solar is a licensed Massachusetts solar installer who has experience working with condominiums and property managers. We can work with your condo association to maximize incentives, navigate the installation process, and manage the rebate and permitting paperwork. Please contact us for a complimentary solar evaluation of your condominium and financial breakdown of a solar investment for individual unit owners.