Advisory Opinion, AD OP 22-06
ISSUE: Whether companies and/or individuals need a residential home builders license to install solar panels on residential structures within the state of Alabama.
OPINION: For the installation of solar panels on a residential structure where the cost of the undertaking exceeds $10,000, or $2,500 when the panels are installed on the residential roof, an unlimited license issued by the Board is required.
The Board previously opined “the installation/attachment of a solar panel alone, when the structural integrity of the residence is not effected, does not require that a contractor hold a homebuilders license. The installation/attachment of a solar panel alone and which does not in any way involve the structural integrity of a residence on which the work is being performed would be considered a specialty function activity within the industry. The specialty function activity is able to be performed by a contractor alone and does not require the hiring of other subcontractors to perform any work. The Board does not consider the specialty function activity of the installation/attachment of a solar panel alone as falling within the meaning of a residential homebuilder as defined in Ala. Code § 34-14A-2(10) (1975),” See AD OP 08-049.
However, in 2011, the Board clarified that advisory opinion in light of Alabama appellate court interpretation of the Board’s governing statute, Ala. Code (1975) § 34-14A-1, et seq. That interpretation surmised that anyone performing repair, improvement, or re-improvement on a residence, the cost of which exceeds $10,000, a residential home builders license is required regardless of whether the structural integrity of the residence is affected and regardless of whether more than one trade is involved.
Further, the Board’s governing statute and regulations have changed since it last issued an advisory opinion to the posed question(s).
The home builders licensure law is codified at Ala. Code 1975 § 34-14A-1, et seq., (the “Act”). The Act defines a residential homebuilder as:
A person who constructs a residence or structure for sale or who, for a fixed price, commission, fee, or wage, undertakes or offers to undertake the construction or superintending of the construction, or who manages, supervises, assists, or provides consultation to a homeowner regarding the construction or superintending of the construction, of any residence or structure which is not over three floors in height and that does not have more than four residential units, or the repair, improvement, or reimprovement thereof, to be used by another as a residence when the cost of the undertaking exceeds ten thousand dollars ($10,000). Notwithstanding the foregoing, the term includes a residential roofer when the cost of the undertaking exceeds two thousand five hundred dollars ($2,500). Nothing herein shall prevent any person from performing these acts on his or her own residence or on his or her other real estate holdings. Anyone who engages or offers to engage in any acts described in this subdivision, through advertising or otherwise, shall be deemed to have engaged in the business of residential home building.” Ala. Code § 34-14A-2(12).
A residence is defined as “A single unit providing complete independent residential living facilities for one or more persons, including permanent provisions for living, sleeping, eating, cooking, and sanitation” Ala. Code § 34-14A-2(11).
A structure is defined as “A residence on a single lot, including a site-built home, a condominium, a duplex or multi-unit residential building consisting of not more than four residential units or any improvement thereto” Ala. Code § 34-14A-2(14).
An improvement is defined as “Any site-built addition or enhancement attached to or detached from a residence or structure for use and enjoyment by the homeowner” Ala. Code § 34-14A-2(5).
The term repair, improvement, or reimprovement is defined in part as “engaging in the business of residential home building by contracting directly with a homeowner to perform construction on a residence or structure, when the cost of the undertaking exceeds $10,000, and when the construction does not affect the structural integrity of a residence or structure, or does not involve more than one trade. ….” Ala. Admin. Code r. 465-X-1-.01(9) (emphasis added).
The term “residential roofing” as used in these rules shall mean installing products or repairing surfaces on the external upper covering of a residence or structure that seals, waterproofs, or weatherproofs the residence or the structure, when the cost of the undertaking exceeds $2,500. Ala. Admin. Code r. 465-X-1-.01(10).
Pursuant to Section 5 of the Act, the Board may issue more than one type of license and may issue licenses that vary in scope of work authorized, licenses without limitation and with limitation.
The Board currently issues (1) licenses without limitation (unlimited license), meaning the license holder may engage in the business of residential home building, regardless of the scope of construction; (2) licenses with limitation (limited license), meaning the license holder may engage in the business of residential home building as limited by the definition of repair, improvement and reimprovement referenced above; and (3) roofers license (limited to roofing). Ala. Admin. Code r. 465-X-3-.04(2)(b).
Recently, the Board has informally advised person(s) that an unlimited license would be required for the installation of residential solar panels. The informal analysis was based upon person(s) informing the Board that (1) the cost of the undertaking exceeds $10,000; (2) the process involves the installation, and/or attachment of the solar panels to the residence, and as such, meets the definition of an improvement. In most if not all instances, the installation and/or attachment of the solar panels have been upon the residential roof and falling within the definition of residential roofing; (3) the process has involved full connection and/or preparation for full connection of the solar panel(s) system to that of the residential electrical system for live connectivity; and (4) installation of the solar panels upon the residential roof may impact structural integrity of the roofing system.
Applying the law and regulations to your question, “whether companies and/or individuals need a residential home builders license to install solar panels on residential structures within the state of Alabama,” the Board opines that where the cost of the undertaking for the installation exceeds $10,000, a company or individual is required to have a license issued by the Board to install solar panels upon a residence. The installation most often involves more than one specific trade being performed and/or supervised, (electrical, residential roofing) and/or structural integrity during the installation of the solar panels upon the residential roof. Therefore, the Board further opines that a company or individual needs an unlimited license issued by the Board to install solar panels upon a residence. It should also be noted that where the installation of solar panels is upon the existing roof, the cost of the undertaking is $2,500 triggering the Board’s jurisdiction for license. Regardless of the economic threshold, it is the opinion of the Board that an unlimited license is required for the installation of solar panels upon a residence.
This advisory opinion constitutes the Board’s interpretation of the law and regulations as applied to the facts contained in the request, as well as contemplating facts presented in numerous and previous informal requests. It is not binding on a court of law. The Board strongly encourages you to review this advisory opinion with the county legal counsel, and to include the county attorney in the decision-making process regarding residential solar panel installations.
Advisory opinions may be revoked or modified by the Board at any time; however, any such revocation or modification shall not be applied retroactively unless the person making such a request misstated or omitted facts material to the advisory opinion, or the advisory opinion was issued with respect to a matter where residential construction had already commenced.