Texas Solar Rights & Regulations
Homeowners
The Texas House Bill (HB) 362 has imposed limitations on homeowners associations (HOAs) and property owners associations (POAs) from outright restricting solar devices. Homeowners living in neighborhoods with HOAs must still follow the normal procedures for seeking improvements, which includes a written request or application to an appointed Architecture Review Committee or similar council.
The Texas Property Code Section 202.010 states that HOAs and POAs cannot prohibit or restrict a property owner from installing a solar energy device1. However, HOAs do have the power to restrict solar panels if certain conditions exist, such as if the solar energy devices are illegal or violate public health and safety, or if they are located on common property within the subdivision.
Local Governments
According to the Texas Health and Safety Code §388.005 ©, municipalities, political subdivisions, institutions of higher education, and state agencies within ozone nonattainment and near nonattainment counties must reduce their electrical consumption by five percent each year for seven years, beginning September 1, 20191. The expansion of solar energy generation is one means by which entities in nonattainment counties can meet their energy reduction goal.
Nonprofit Utilities
Unlike most of the Texas power market, municipal utilities (munis) and cooperatives (co-ops) are not subject to deregulation. This allows them to remain vertically integrated and eliminates the requirement for them to participate in competitive retail markets. As a result, their electricity rates are often stable and comparatively low against rates in the deregulated market. Munis and co-ops have the option to enter into competition if they wish; however, to date, only one co-op, Nueces Electric Cooperative, has chosen to do so. Despite the minimal regulatory requirements for nonprofit utilities, they should be cognizant of the interconnection and registration requirements associated with distributed generation (DG).
Electricity Transmission Interconnection Standards
The addition of every distributed generation resource to the ERCOT grid necessitates an interconnection agreement. Munis and co-ops should be mindful of additional county and city permit regulations and building codes that may impact the DG system when formulating the interconnection agreement. Utilities typically establish interconnection agreements before constructing a solar array with the distributed service provider. This agreement also takes into account the transfer of power benefits and is usually negotiated through a power sales agreement between the project owner and the utility or host.