New California Requirement for Residential Solar System Contracts Posted on Jan 24, 2019
If you are a contractor installing solar for homeowners in California, don’t forget the new disclosure form that you must present to your customers. Beginning January 1, 2019, solar energy companies must provide a disclosure document substantially in the form created by the Contractor’s State License Board (“CSLB”) in collaboration with the California Public Utility Commission, which is accessible here: Solar Energy System Disclosure Document. This disclosure form must be 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. Contractors 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. PACE contractors must still comply with the current home improvement disclosure requirements of the Contractors State License Law.
This new disclosure form requirement resulted from California Assembly Bill 1070, which was passed last year in response to complaints from solar customers. The goal of the law is to make things simple and understandable to consumers. In practicality, however, not much has changed. The form does not contain anything not already in CleanTech Docs’ Residential Solar system Installation Agreements. Primarily, the new steps contractors need to take due to this law are 1) to determine whether their type of installation and customer triggers the form's requirement, and if so, include the form as the contract’s cover page; and 2) to ensure they include the correct “Total System Cost” on the form. In regard to the former, the disclosure document is required for every solar energy contract for an installation of a solar system on a residential building for systems between 1 kW-AC and 5 MW-AC and it is required for both single and multi-family residential buildings. The form is not applicable to a system that is being installed as a standard feature on new construction. In regard to the Total System Cost, the amount stated on the form must include the financing and energy cost. For cash sales, the total cost should match the sale price of system. For leases, the total cost of the lease should be included. Thus, contractors need to make sure that they include all finance charges in the Total System Cost field of the form.