Cold weather + low-e windows + close neighbors with vinyl siding = melted vinyl siding, sometimes. Dig.
The photo above, taken by Boston home inspector Donald Lovering, shows a home with badly melted vinyl siding, along with several concentrated reflections from the neighboring windows. I've seen the same thing happen many times here in Minnesota, but this is the best photo I've ever seen of this condition, because it shows what's happening so clearly.
Double-pane windows can slightly deform during cold weather, pulling the middle of the glass inward. It's not enough to be noticeable, at least when looking at the window, but sunlight reflected from these deformed windows can be concentrated enough to cause a magnifying glass effect. If the windows have a low-e coating, this equates to a lot of reflected light in one place, as shown quite nicely in the image above. When this happens just right (or wrong), and a neighboring house with vinyl siding is in exactly the right pathway of that reflected light, the reflected light can create enough heat to melt and deform vinyl siding.
The Vinyl Siding Institute has put together an excellent video explaining how this all works, as well as why it's not the vinyl siding's fault.
I have to agree with the vinyl siding manufacturers; this is an unnatural occurrence, and this will happen to vinyl siding any time it's subjected to this kind of heat. According to Kurt M. Mitchell, Attorney at Law with Hellmuth & Johnson, PLLC, there is no legal precedence for assigning blame when it comes to melted vinyl siding, most likely because this creates no safety hazard, no performance issues, and the cost of the damaged material is typically quite minimal. It's primarily a cosmetic issue.
If you have melted siding as a result of your neighbor's windows, my advice is to be nice to your neighbors, butter them up with some delicious food and / or drinks, and offer to buy them window screens to install over the offending windows. That, or you could go the opposite route and take Marko Vovk's advice.
For more information on melted vinyl siding from the National Association of Home Builders, click here: Sunlight Reflected from Double-Paned Low-E Windows, and Damage to Vinyl Siding and Other Materials.
Author: Reuben Saltzman, Structure Tech Home Inspections