Date:April 19, 2016
To:Silicon Valley Leadership Group EnergyCommittee
From:Tim McRae, Sr. Energy Director; Ria Varghese, Energy & Environment Coordinator
RE:AB 2699(Gonzalez, Weber) –Contractors’ State License Board: solar energy systems companies
Issue
This bill would require a solar company selling, financing, or leasing a solar energy system, to provide each customer with a “solar energy system disclosure document”, informing customers of the risks and rewards of solar energy system ownership and warranty issues prior to the sale, finance or lease of a solar energy system.
Recommendation
Energy Policy Committee voted to Oppose an earlier version of this bill; the amended version of the bill is less onerous and as such Staff recommends sending a Letter of Concern.
Summary
This bill would require the Contractors’ State License Board (CSLB), on or before July 1, 2017, to develop and make available on its Internet web site, a “solar energy system disclosure document” which a solar energy systems company must provide each customer prior to completion of a sale, financing, or lease of a solar energy system. This document shouldinclude all of the following information:
a)The amounts and sources of financing obtained.
b)The total cost and payments for the system, including financing costs.
c)The calculations used by the home improvement salesperson to determine how many panels the homeowner needs to install.
d)The calculations used by the home improvement salesperson to determine how much energy the panels will generate.
e)Any additional monthly fees the homeowner’s electric company may bill, any turn-on charges, and any fees added for the use of an Internet monitoring system of the panels or inverters.
f)The terms and conditions of any guaranteed rebate.
g)The final contract price, without the inclusion of possible rebates.
h)The solar energy system company’s contractor license number.
i)The impacts of solar energy system installations not performed to code.
j)Types of solar energy system malfunctions.
k)Information about the difference between a solar energy system lease and a solar energy system purchase.
l)Information on how and to whom consumers may provide complaints.
Existing law requires a home improvement contract to contain, as specified, a notice stating that the owner or tenant has the right to require the contractor to have a performance and payment bond.This bill would require the board to establish through regulation requirements for a contractor to maintain a blanket performance and payment bond for the purpose of solar installation.
Existing law prohibits the down payment for a home improvement contract from exceeding $1,000 or 10% of the contract amount, whichever is less. Existing law exempts from this restriction a contractor who, among other things, furnishes a blanket performance and payment bond.This bill would subject a contractor for the installation of a solar energy system to the restriction despite having those performance and payment arrangements.
Analysis
Many of the provisions required by the proposed “solar energy system disclosure document” are already required by Solar Energy Industries Association (SEIA) Solar Business Code as well as state or federal law, including (b), (e), (f), (g), (h)and (l). For leases and PPAs, a Federal Leasing Act Disclosure under Reg. M is already required and currently included in customer agreements.
The top priority of the Silicon Valley Leadership Group Energy Committeeis to advocate for policies and programs that promote financing and deployment of clean energy. The bill as currently written requires information that is duplicative of current requirements that presents a low risk of chilling solar sales and therefore undermining the deployment of clean rooftop solar energy.
The earlier version of the bill had additional duplicative requirements and slanted information that had a stronger chance of chilling rooftop solar sales. The requirement regarding the performance and payment bond is new in this version and may be duplicative of warranty requirements.
The author and her staff have been working with the affected industry. As the direction of the amendments is positive, staff does not recommend a full Oppose position at this time. Rather, we recommend a “Letter of Concern” that expresses concern about duplicative requirements in the bill and highlights the unnecessary nature of the performance and payment bond requirements.
Status: Introduced on February 19, 2016 and amended on April 13. Referred to committee on Business & Professions (B&P) and Judiciary committee. Hearing at B&P committee was held on April 12 and the bill was passed as amended (15-0-1) and re-referred to the Committee on Judiciary.
Support:
California Municipal Utilities Association, Northern California Power Agency
Opposition:
None on file.