Boys (and Girls) of Summer: New Residential Solar Energy System Disclosures Take Effect January 1, 2019

Flickr. James Vaughan … Shindig-Haulabaloo! CC BY-NC-SA 2.0

As we come to the end of Summer, the California Contractors State License Board advises licensees that it has finalized its Solar Energy System Disclosure Document. The Solar Energy System Disclosure Document, required under Business and Professions Code Section 7169 as amended by Assembly Bill 1070 in 2017,  requires that the disclosure language of the document be:

1. Included in all contracts providing for the installation of a “solar energy system” on a residential building;
2. Included on the front page or cover page of the contract;
3. Printed in boldface 16-point type; and
4. Written in the same language principally used in the oral sales presentation or in print or digital marketing material given to the consumer.

Note: Under Business and Professions Code Section 7169, a “solar energy system” is defined as a “solar energy device to be installed on a residential building that has the primary purpose of providing for the collection and distribution of solar energy for the generation of electricity, that produces at least one kW, and no more than five MW, alternating current rated peak electricity, and that meets or exceeds the eligibility criteria established pursuant to Section 25782 of the Public Resources Code.” However, it does not include ” a solar energy system that is installed as a standard feature on new construction.”

For solar system contracts utilizing Property Assessed Clean Energy (PACE) financing, the disclosure required under Streets and Highways Code Section 5898.17 should be used for the financing contract only,  and the Solar Energy System Disclosure Document should be used for the installation contract.

Note: Because the Solar Energy System Disclosure Document is required to be used for solar energy system installations on “residential buildings,” it appears that the Solar Energy System Disclosure Document should be used in conjunction with the statutory Home Improvement Contract required under Business and Professions Code Section 7159, which applies to residential remodeling work.

August 30, 2018                                              CSLB #18-12

New Requirement for Residential Solar Energy System Contracts to Take Effect January 1, 2019

SACRAMENTO – The Contractors State License Board (CSLB) is notifying the California construction industry that effective January 1, 2019, contractors who install residential solar energy systems will be required to comply with a new consumer notice requirement.

Assembly Bill 1070, Stats of 2017, Ch 662 established Business and Professions Code (BPC) section 7169. This new law requires the CSLB, in collaboration with the California Public Utilities Commission (PUC), to develop and make a solar energy system disclosure document available on its website by July 1, 2018.  The disclosure document must be provided to consumers prior to the completion of a sale, financing or lease of a system. CSLB posted online a proposed one-page Solar Energy System Disclosure Document on June 29, 2018 and indicated the document was pending PUC approval.

At its August 23, 2018 meeting, the PUC approved Final Resolution M-4836 to endorse PUC staff’s collaboration with CSLB to draft consumer disclosures required by AB 1070 and approved the Solar Energy System Disclosure Document posted on the CSLB’s website.

Contractors will be required to comply with this new requirement beginning January 1, 2019.

Some of the requirements of BPC section 7169 include:

• Solar energy system companies must provide the Solar Energy System Disclosure Document to consumers printed in boldface 16-point font on either the front or cover page of every solar energy contract prior to completing a sale, financing, or lease of a solar energy system to be installed on a residential building.
• The disclosure document and the contract must be written in the same language principally used in the oral sales presentation or the marketing materials provided to the consumer. English and Spanish versions of the disclosure document are available on CSLB’s website in English and Spanish. The contractor must translate the document into other languages, as necessary.
• If the sale of the solar energy system utilizes Property Assessed Clean Energy (PACE) financing, the PACE Financing Estimate and Disclosure form may be used in place of the new solar energy system disclosure document. The PACE form is available on the California Legislative Information website and State Assembly website.

PACE contractors must still comply with the current home improvement disclosure requirements of the Contractors State License Law (LINK).

BPC §7169 also contains provisions for the development of further disclosure content for residential solar energy systems contracts. To that end, CSLB hosted a meeting of stakeholders on August 24, 2018 to seek industry and consumer input on the development of further disclosure content. Please stay tuned for new Industry Bulletins regarding possible additional stakeholder meetings and possible future solar energy system contract disclosure requirements that will be implemented through the regulatory process, which will provide an additional opportunity for public comment.

CSLB hopes the requirement to include the Solar Energy System Disclosure Document in the contract for residential solar energy systems will reduce misunderstandings between contractors and consumers and help our licensees improve their relationships with customers.

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And, finally, in tribute to the waning days of Summer: