This is a tricky situation and you're right to be concerned about clearance requirements. Here's a breakdown of how the NEC (National Electrical Code) and California Electrical Code (CEC), which is based on the NEC, likely apply, along with key considerations

Key Issues & Code References:
Working Clearance (NEC 110.26(A)): This is the primary concern. You need adequate space for a qualified electrician to safely work on the panel while it's energized. The depth of the working space depends on the voltage and conditions. In a typical residential service, you're likely dealing with 120/240V, so the depth of the working space is going to be driven by the conditions described in 110.26(A)(1). Depth

The required depth of the working space in front of the panel is specified based on the voltage to ground and the conditions of what is on the other side of that workspace:

Condition 1 (Likely)

Exposed live parts on one side and grounded parts on the other side. This would require 3 feet of depth.

Condition 2

Exposed live parts on both sides of the working space (unlikely in a normal residential scenario) would require 3.5 feet of depth.

Condition 3

If there are no exposed live parts, then 3 feet of depth.

Width (NEC 110.26(A)(2)): The working space width needs to be the wider of: 30 inches, or the width of the equipment. The panel must be installed so it can be opened at least 90 degrees. Height (NEC 110.26(A)(3)): The working space height must be the greater of: 6.5 feet high, or the height of the equipment. Dedicated Equipment Space (NEC 110.26(E)): This states there should be no foreign equipment installed in the dedicated space above or below the electrical panel. This space is reserved for electrical equipment related to that panel. Obstructions (NEC 110.26(A)(3)): The working space must be clear and unobstructed. Readily Accessible (NEC Article 100 Definition): The panel must be "Capable of being reached quickly for operation, renewal, or inspections without requiring those to whom ready access is requisite to climb over or remove obstacles or to resort to portable ladders, and so forth."Analysis of Your Situation


Shared Space

The 5 feet between the houses is shared. The key here is whether that shared space constitutes an obstruction or hinders ready access. If something is routinely stored there, making the required space unusable, that's a problem.2.

Encroachment

The fact that it's shared property doesn't automatically cut the required clearance in half. The inspector will likely consider the actual usable space. If the adjacent house's wall comes close enough to the front of your panel, obstructing the full 3 feet (or whatever required depth based on the conditions), you'll have an issue.3.

Future Changes

Even if the 5 feet is clear now, an inspector may be concerned about future changes. What if a neighbor plants a large bush, builds a fence, or stores items that block access in the future?

What to Do


Consult with the Local Building Department

This is the MOST IMPORTANT step. Contact your local building department in California and speak to an electrical inspector before you proceed with the upgrade. Explain your situation and ask for their interpretation of the code in your specific case. Get their guidance in writing if possible.2.

Consult with a Licensed Electrical Contractor

A good electrical contractor experienced in main panel upgrades in your area will be familiar with local code interpretations and can advise you on the best course of action. They may be able to suggest alternative panel locations or mounting options.3.

Consider Moving the Panel

If there's any doubt about meeting the clearance requirements, seriously consider moving the panel to a location where you have ample, unobstructed working space. This is often the easiest and most reliable solution.4.

Physical Barriers/Protection

If moving the panel isn't feasible, discuss with your contractor the possibility of installing a physical barrier (e.g., a bollard or similar) to prevent the neighbor from obstructing the required working space. This solution would need to be approved by the local inspector.5.

Documentation

Take photos and measurements of the existing space to document the situation. This will be helpful when discussing the project with the building department and your contractor.

Possible Solutions (depending on local interpretation)



Move the Panel

Best solution, but costly.

Recessed Panel

If possible, recessing the panel into the wall slightly can gain you some valuable inches.*

Neighbor Agreement (Unreliable)

While tempting, relying on an agreement with the neighbor to keep the space clear is usually not a reliable long-term solution. The building department is unlikely to accept this as a substitute for code compliance.

In Summary:

The 3-foot working clearance (or whatever applies based on the conditions described in 110.26(A)(1)) is critical for safety. Don't proceed with the main panel upgrade until you have received clear guidance from your local building department and a qualified electrical contractor on how to comply with the code in your unique situation. Ignoring these requirements can lead to failed inspections, costly rework, and, most importantly, a potentially unsafe installation. Flag for review