AN ACT to clarify the law governing deed restrictions on solar collectors and to allow for certain third‑party sales of renewable energy.

The General Assembly of North Carolina enacts:

Part i. Solar power deed restrictions

SECTION 1.1.  G.S. 22B‑20 reads as rewritten:

§ 22B‑20.  Deed restrictions and other agreements prohibiting solar collectors.

(a)        The intent of the General Assembly is to protect the public health, safety, and welfare by encouraging the development and use of solar resources and by prohibiting deed restrictions, covenants, and other similar agreements that could have the ultimate effect of driving the costs of owning and maintaining a residence beyond the financial means of most owners.

(b)        Except as provided in subsection (d) of this section, any Any deed restriction, covenant, or similar binding agreement that runs with the land that would prohibit, or have the effect of prohibiting, the installation of a solar collector that gathers solar radiation as a substitute for traditional energy for water heating, active space heating and cooling, passive heating, or generating electricity for a residential property on land subject to the deed restriction, covenant, or agreement is void and unenforceable. As used in this section, the term residential property means property where the predominant use is for residential purposes. The term residential property does not include any condominium created under Chapter 47A or 47C of the General Statutes located in a multi‑story building containing units having horizontal boundaries described in the declaration. As used in this section, the term declaration has the same meaning as in G.S. 47A‑3 or G.S. 47C‑1‑103, depending on the chapter of the General Statutes under which the condominium was created.

(c)        This section does not prohibit a deed restriction, covenant, or similar binding agreement that runs with the land that would regulate the location or screening of solar collectors as described in subsection (b) of this section, provided the deed restriction, covenant, or similar binding agreement does not have the effect of preventing the reasonable use reducing the operating efficiency of a solar collector for a residential property. If an owners' association is responsible for exterior maintenance of a structure containing individual residences, a deed restriction, covenant, or similar binding agreement that runs with the land may provide that (i) the title owner of the residence shall be responsible for all damages caused by the installation, existence, or removal of solar collectors; (ii) the title owner of the residence shall hold harmless and indemnify the owners' association for any damages caused by the installation, existence, or removal of solar collectors; and (iii) the owners' association shall not be responsible for maintenance, repair, replacement, or removal of solar collectors unless expressly agreed in a written agreement that is recorded in the office of the register of deeds in the county or counties in which the property is situated. As used in this section, owners' association has the same meaning as in G.S. 47F‑1‑103. As used in this section, the term reducing the operating efficiency of a solar collector means the regulation of the location or screening of the solar collector would decrease the efficiency or performance of the solar collector by more than ten percent (10%) of the amount that was originally specified for the solar collector.

(d)       This section does not prohibit a deed restriction, covenant, or similar binding agreement that runs with the land that would prohibit the location of solar collectors as described in subsection (b) of this section that are visible by a person on the ground:

(1)        On the facade of a structure that faces areas open to common or public access;

(2)        On a roof surface that slopes downward toward the same areas open to common or public access that the façade of the structure faces; or

(3)        Within the area set off by a line running across the façade of the structure extending to the property boundaries on either side of the façade, and those areas of common or public access faced by the structure.

(e)        In any civil action arising under this section, the court may award costs and reasonable attorneys' fees to the prevailing party.

SECTION 1.2.  This Part is effective when it becomes law and applies to deed restrictions, covenants, or similar binding agreements that run with the land recorded on or after that date.

part ii. third‑party sales

SECTION 2.1.  G.S. 62‑3(23) reads as rewritten:

§ 62‑3.  Definitions.

As used in this Chapter, unless the context otherwise requires, the term:

…

(23)     a.         Public utility means a person, whether organized under the laws of this State or under the laws of any other state or country, now or hereafter owning or operating in this State equipment or facilities for:

1.         Producing, generating, transmitting, delivering or furnishing electricity, piped gas, steam or any other like agency for the production of light, heat or power to or for the public for compensation; provided, however, that the term public utility shall not include persons who construct or operate an electric generating facility, the primary purpose of which facility is either for (i) a person's own use and not for the primary purpose of producing electricity, heat, or steam for sale to or for the public for compensation or compensation, (ii) a person who constructs or operates an eligible solar energy facility on the site of a customer's property and leases such facility to that customer, as provided by and subject to the limitations of Article 6B of this Chapter;Chapter, or (iii) a person who constructs or operates a renewable energy facility on the site of a customer's property and sells the electricity produced by such facility to that customer, as provided by and subject to the limitations of G.S. 62‑353;

….

SECTION 2.2.  Article 17 of Chapter 62 of the General Statutes is amended by adding a new section to read:

§ 62‑353.  Third‑party sales of electricity from on‑site renewable energy facilities.

(a)        The sale of electricity to a customer from a renewable energy facility, as defined in G.S. 62‑133.8, owned and operated by a third party and located on the customer's property where such electricity will be consumed, shall not subject the third‑party owner or operator of the on‑site generating equipment to any restrictions on such sales under G.S. 62‑110.2 or to regulation as a public utility under this Chapter so long as (i) the facility is sized to supply no more than one hundred twenty‑five percent (125%) of the average annual consumption of electricity by the customer at that site and (ii) the third‑party owner reports to the Utilities Commission the proposed construction of such a facility prior to the beginning of construction.

(b)        For purposes of this section, the customer's site includes all contiguous property owned or leased by the customer, without regard to easements, public thoroughfares, transportation or utility rights‑of‑way, or other similar interruptions that may divide parcels of property under common ownership.

(c)        For purposes of net metering as regulated by the Commission, renewable energy facilities owned or operated by a third party under this section shall be eligible to participate in net metering arrangements with applicable public utilities.

(d)       The Commission may approve a new schedule of fees or credits for customers who choose to use distributed energy resources, whether through ownership, lease, or through power purchase agreement, with a utility or nonutility provider. Such fees and credits shall be nondiscriminatory and applied only after an investigation of the costs and benefits of customer‑sited generation.

SECTION 2.3.  G.S. 62‑300(a) is amended by adding a new subdivision to read:

(18)    Twenty‑five dollars ($25.00) for each report of proposed construction filed by a person who constructs or operates a renewable energy facility on the site of a customer's property and sells the electricity produced by such facility to such customer, as provided by and subject to the limitations of G.S. 62‑353.

SECTION 2.4.  This Part becomes effective July 1, 2023.

part iii. effective date

SECTION 3.1.  Except as otherwise provided, this act is effective when it becomes law.