North Carolina Surges to Fourth in Nation for Solar Energy
Published in Construction Executive
A July 2023 Forbes article reports that North Carolina ranks fourth in the nation for solar energy generation, according to the United States Energy Information Administration, and more than one million North Carolina homes are powered by solar energy.
With upward trends over recent years of solar rebate incentives, tax exemptions, and an increase in the state’s solar infrastructure, there are now more than 200 solar companies operating in North Carolina (NC Solar Power Facts, 2023). In fact, last year, one of the most significant incentives that became available was the Investment Tax Credit – new and existing NC homes that install solar may be eligible for a 30% tax credit, including systems installed over the next decade in tax years 2022-2032.
With all this new business taking place, it is important for roofers, contractors, electricians, construction industry professionals, and even homeowners to be aware of the licensing and permitting guidelines for the requirements of solar panel system installations in North Carolina, also known as SPVP (Solar Photovoltaic Systems).
Building Permit Required for More Than $20K; Licensed GC Required for $30K
In 2022, the Solar Panel Installation Licensing & Permitting Guidelines were published as a collaborative effort by the North Carolina Department of Insurance/Office of State Fire Marshal, North Carolina State Board of Examiners of Electrical Contractors, and the North Carolina Licensing Board for General Contractors.
North Carolina General Statutes N.C.G.S. §§87-1 and 87-1.1 define general contracting and provide an exception for licensees under Article 2 or 4 of this Chapter:
“A building permit is required for any project, including SPVP installations at a cost of $20,000 in the State of North Carolina. The North Carolina Licensing Board for General Contractors (the Board) considers SPVP Installations for residential or commercial buildings to be electrical work unless the scope of work to be performed includes structural or other improvements that are $30,000 or more and consist of work that is typically performed by licensed general contractors and regulated by the Board.”
Licensed Electrician Required
The guidance further mandates that SPVP installations of any value requires an electrical contractor license.
North Carolina General Statutes N.C.G.S. 87-43 defines electrical contracting as follows:
“Electrical contracting shall be defined as engaging or offering to engage in the business of installing, maintaining, altering, or repairing any electric work, wiring, devices, appliances, or equipment. No person, partnership, firm, or corporation shall engage, or offer to engage, in the business of electrical contracting within the State of North Carolina without having received a license in the applicable classification described in G.S. 87-43.3 from the State Board of Examiners of Electrical Contractors in compliance with the provisions of this Article, regardless of whether the offer was made, or the work was performed by a qualified individual as defined in G.S. 87-41.1.”
Permits can be issued to a licensed electrician, as the responsible party, for installation of solar panels. Pursuant to N.C.G.S. §87-1.1, a general contractor may act as a subcontractor to the licensed electrician. One important question to this regard – Do structural or other (non-electrical) improvements exceed $30,000? If no, then the licensed electrician can perform the work. If yes, then the licensed electrician MUST subcontract with a licensed general contractor to perform the structural or other improvements.
Installations valued at $60,000 or less may be contracted by an unlimited, intermediate, or limited license. Installations valued at $150,000 or less may be contracted by an unlimited or intermediate license. Installations with a project value greater than $150,000 may only be contracted by an unlimited license.
If problems persist with obtaining a permit, parties can contact the North Carolina Department of Insurance. It is also important to note that in 2019, the NC Department of Insurance issued a Guidance Paper regarding the permitting and inspection process for solar panels entitled, “Statewide Uniform Requirement of Inspection Procedures for Solar Photovoltaic Systems Installed on residential Rooftops.”
Common Legal Questions Around Solar Installations
In addition to knowing and understanding the licensing and permitting guidelines, we routinely get questions about the responsibilities of sales representations for solar.
Several construction contractor clients have been contacted by large solar outfits asking them to contract with them on a commission basis for selling and installing solar. There are several pitfalls to be aware of as these contracts can result in the contractor taking on extra and often unwanted liability for potential misrepresentations.
Another question commonly asked – If I live in an HOA and there are rules against solar panels, can I install them? Yes, according to a recent decision by the North Carolina Supreme Court.
In 2022, the Southern Environmental Law Center filed a brief with the NC Supreme Court on behalf of the North Carolina Sustainable Energy Association, supporting Raleigh homeowners’ desired installation of rooftop solar systems, despite HOA rules against.
The NC Supreme Court ruled in Belmont Association, Inc. v. Thomas Farwig and wife, Rana Farwig and Nancy Mainard that homeowners had the right to install solar panels on their home regardless of the HOA rules against the installations. The HOA still reserved the right on where the solar panels could be installed, as long as the location does not prevent reasonable use.
The ruling was favorable news to 26% of all North Carolina homeowners who live in an HOA (What the NC Supreme Court Ruling on HOAs Means for Residential Solar).
Helpful Resources
Always be aware of the value of the job you are undertaking to ensure you have the proper licensure in place. It is also important to either consult these guidelines or seek counsel with any questions pertaining to these guidelines before solar panel systems are installed.
Here are some helpful resources to visit:
- North Carolina State Building Code ( 143-138)
- NC Licensing Board for General Contractors, 919.571.4183
- NC State Board of Examiners of Electrical Contractors, 919.733.9042
- NC Department of Insurance/Office of State Fire Marshall, 919.647.0000
About Ashlee Poplin: Practicing in the Adams and Reese Charlotte office, Ashlee Poplin represents clients in construction law matters and litigation. Ashlee is recognized by clients and peers among the Best Lawyers® “Ones to Watch in Construction Law – Litigation”, and for four consecutive years (2018-2022), she has been selected among North Carolina Super Lawyers® “Rising Stars.” Ashlee is licensed in North Carolina, South Carolina and Utah.