The Homeowners’ Energy Policy Act (HEPA), formally known as Public Act No. 68 of 2024, represents a groundbreaking step toward renewable energy adoption in Michigan. This new law aims to eliminate barriers often imposed by the governing documents of homeowners’ associations (“HOAs”) authorizing the HOA to limit or prohibit a homeowner’s unapproved installation of energy-saving improvements, including, but not limited to, rooftop solar panels, charging stations for electric vehicles, and energy-efficient appliances. 

HEPA was signed into law by Governor Gretchen Whitmer on July 8, 2024, and will take effect on March 19, 2025. 

Homeowners, regulatory authorities, and others who strongly support society’s faster adoption and integration of more energy-saving initiatives and technologies are hailing the HEPA as a sorely needed step forward that will prohibit HOA boards from exerting undue interference against a homeowner’s ability to make energy-saving improvements to their home.   

The “anti-HOA” crowd and those individuals who strongly support a homeowner’s right to make all decisions affecting his or her private property regardless of whether their home may be legally subject to an HOA’s enforceable restrictions are also likely to view the new law as a righteous and fair “re-balancing” of the rights of the homeowner vs. those of the HOA. 

While all these various factions may have a valid point (or two) underlying their conception of HEPA as a necessary and beneficial change for the greater good in the laws affecting Michigan HOA’s, several reasons exist why HOA board members may dread the coming of HEPA in 2025 as just the latest regulatory millstone to be hung around their COVID and inflation-weary necks by state legislators, however well-intentioned. 

Definitions of HEPA’s Key Terms 

Crucial to evaluating HEPA ‘s potential impact on HOA’s is a clear understanding of its terminology.  MCL 559.303 (3) (a) – (k) contains express definitions of several key terms used throughout the Act, including, but not limited to, the following: 

  • Common Area: “Common area” means a portion of a building, land, or amenities owned or managed by the homeowners’ association that is generally accessible to all members of the association. “Common area” includes, but is not limited to, a hallway, a stairway, an elevator, a lobby, a laundry and recreational room, a playground, a community center, a garage, a public green space, a park, or a fitness room. 
  • Energy-Saving Improvement or Modification: “Energy-saving improvement or modification” includes, but is not limited to, all of the following:  
    • A clothesline. 
    • Air source heat pumps.  
    • Ground source heat pumps.  
    • Insulation.  
    • Rain barrels.  
    • Reflective roofing.  
    • Energy efficient appliances.  
    • Solar water heaters.  
    • Electric vehicles supply equipment.  
    • Energy-efficient windows. 
    • Energy-efficient insulation materials. 
  • Electric Vehicle Supply Equipment: “Electric vehicle supply equipment” means a machine or other device located within this state that is supplied with electricity and designed or used for placing or delivering electricity into the battery storage system of a motor vehicle 
  • Member: “Member” means an owner of a home or unit that is within the jurisdiction of the homeowners’ association. 
  • Policy: “Policy” means the written solar energy policy statement described under Section 9 (1) of HEPA. 
  • Shared Roof:” Shared roof” means a roof that serves more than 1 home or unit, including, but not limited to, a contiguous roof that serves adjacent homes or units. 
  • Solar Energy System: “Solar Energy System” means a complete assembly, structure, or design of a solar collector, or a solar storage mechanism that uses solar energy for generating electricity or heating or cooling gases, solids, liquids, or other materials. Solar energy system includes the design, materials, or elements of a solar energy system and its maintenance, operation, labor components, and the necessary components, if any, of supplemental conventional energy systems designed or constructed to interface with a solar energy system. 
  • Solar Collector: “Solar Collector” means any of the following:  
    • An assembly, a structure, or a design, including passive elements, used for gathering, concentrating, or absorbing direct and indirect solar energy, or specially designed for holding a substantial amount of useful thermal energy, that transfers that energy to gas, solid, or liquid or uses that energy directly.  
    • A mechanism that absorbs solar energy and converts it into electricity. 
    • A mechanism or process used for gathering solar energy through wind or thermal gradients.  
    • A component used to transfer thermal energy to a gas, solid, or liquid or convert thermal energy into electricity.  

Breaking Down HEPA’s Protection of a Homeowner’s Installation, Replacement, Maintenance, and Operation of Energy-Saving Modifications and Improvements, and Solar Energy Systems 

The Act is intended to empower Michigan homeowners to embrace energy-saving improvements and modifications without fear of undue interference or restrictive enforcement action from their HOA or its board of directors.

HEPA’s key provisions in this regard include the following:

  1. Voids Certain Restrictive Provisions in HOA Agreements re Energy-Saving Improvements and Modifications:
    • HEPA, Section 5 (1) (a) – (b), nullifies and renders unenforceable, as contrary to public policy, provisions contained in HOA agreements that prohibit, or require HOA approval for, a member’s replacement, maintenance, installation, or operation of energy-saving improvements or modifications.
    • HEPA likewise nullifies and renders unenforceable, as contrary to public policy, provisions contained in HOA agreements that compel, or require association approval for, a member to make auxiliary changes needed for the installation of an energy-saving improvement or modification.
  2. Voids Certain Restrictive Provisions in HOA Agreements re Solar Energy Systems:
    • Under HEPA, Sec. 7, a provision in a homeowners’ association agreement or in the policy adopted by the association under HEPA, Sec. 9 (1) that prohibits or has the effect of prohibiting the installation of a solar energy system is invalid and unenforceable.
  3. Solar Energy Written Policy Mandate:
    • HEPA, Sec. 9 (1) requires that HOAs adopt a written solar energy policy statement by March 19, 2026 (one year after the Act’s effective date). This policy must align with the Act and cannot impose prohibitive conditions.
  4. Limitations on HOA Denials:
    • Under Sec. 9 (1) (f) (iv), HOAs can deny solar system installation applications from homeowners only under specific circumstances, such as when installations violate existing laws, or significantly deviate from approved plans.
  5. Member Protections:
    • The Act ensures HOAs cannot outright prohibit solar energy systems and other energy-saving improvements.

Implications for Homeowners and HOAs 

For Homeowners 

HEPA marks a significant victory for homeowners advocating for green energy adoption. By invalidating restrictive HOA agreements, the Act ensures individuals can freely install solar panels and other energy-saving technologies. These changes not only support sustainability but also offer potential cost savings to the homeowners on their energy bills. 

For HOAs 

The Act introduces several new responsibilities and compliance requirements for HOAs and their overburdened boards to fulfill, necessitating that board members and association managers alike should take an initiative-taking and efficient approach: 

  • Consult with the HOA’s Attorney in Drafting a Solar Energy Policy by the Deadline Date: HOAs and their boards must collaborate with legal professionals to create HEPA-compliant written solar energy policies.  Failure to do so greatly increases the risk that the HOA will violate the Act by adopting a policy that fails to comply with HEPA’s many requirements, or that the HOA board may attempt to enforce a policy that is legally void under the Act. 
  • Review the HOA’s Governing Documents for HEPA Compliance: Existing governing documents should be reviewed and amended as needed to avoid conflicts with HEPA’s provisions, Especially the provisions of the HOA’s governing documents applicable to the boards right to approve homeowner alterations and modifications of their dwelling and lot exteriors and those regarding electric vehicle charging stations and solar panels specifically.
  • Clear Communication to Members: Section 9 (2) mandates that the adopted policies be distributed to members, enhancing transparency. If the membership votes to amend or delete provisions contained in the governing documents to reduce the association’s potential risk of liability for HEPA violations, the association’s board (or its managing agent, or both, as applicable) should make sure that the association distributes true copies of the completed, approved amendments to the membership at the conclusion of the amendment process. Such membership distribution should be made in full compliance with all applicable law and per the specific amendment requirements and procedures set forth in the association’s governing documents, so as to reduce the possibility that dissident members or membership factions will be able to successfully challenge the legality and/or enforceability of the amendments. Again, the board’s reliance upon the expert legal guidance and recommendations of an experienced community association attorney throughout the amendment process is strongly recommended for the association to achieve an optimal and cost-effective result.

Given the legal nuances of HEPA, attorney assistance is crucial for HOAs to navigate compliance: 

  • Policy Drafting: Legal professionals can ensure policies meet Section 9 requirements, avoiding ambiguities that could lead to disputes. 
  • Bylaw Review: Attorneys can identify and rectify conflicting clauses in existing HOA agreements. 
  • Application Oversight: When reviewing and denying solar system requests, boards must adhere to strict criteria, making legal counsel invaluable for risk mitigation. 

Challenges and Opportunities 

While HEPA’s intent is to democratize access to renewable energy, its implementation poses challenges: 

  • Ambiguity Around Coverage: The lack of an explicit definition for “homeowners association” may create confusion. Boards should seek legal advice to confirm their inclusion under HEPA. 
  • Balancing Authority and Compliance: Opponents argue the Act undermines neighborhood autonomy. HOAs must strike a balance between compliance and maintaining cohesive community standards. 

However, these challenges also present opportunities. By embracing HEPA, HOAs can position themselves as forward-thinking organizations aligned with sustainability and energy resilience. 

Looking Ahead: The Path to Energy Equity 

As Michigan prepares for HEPA’s 2025 implementation, the Act sets a precedent for other states considering similar legislation. By empowering homeowners, it underscores the importance of localized action in achieving broader environmental goals. Moreover, it highlights the evolving role of HOAs in fostering—not hindering—progress. 

Final Thoughts 

Whether you are an HOA board member, or just a homeowner living in an HOA, the Homeowners’ Energy Policy Act is a transformative step for Michigan’s energy landscape. By voiding outdated restrictions and promoting renewable energy adoption by homeowners, it aligns individual rights with the collective need for a greener future.  

That said, HEPA will inevitably present new administrative and compliance-related challenges, burdens, and concerns for HOA boards and association managers alike.  No matter which side of the ideological HEPA “HOA Fence” you may sit, now is the time to prepare to respond to this historic shift in energy policy that will impact HOA’s across Michigan in 2025.   

Cited Sources: 

  1. Michigan Legislature – Public Act No. 68 of 2024 (HEPA)
  2. MCL 559.303 Definitions and Provisions
  3. MCL 559.303(3)(a)-(k)
  4. HEPA, Section 9(1)
  5. HEPA, Section 5(1)(a)-(b)
  6. HEPA, Section 7
  7. HEPA, Section 9(1)(f)(iv)
  8. HEPA, Section 9(2)