Available Now on Our Site: A Spanish Language Version of Our Residential Solar System Installation Agreement for California Use; More Translated Documents Coming Soon
Many states have requirements that protect consumers whose primary language is not English. Frequently, states require that legal documents are provided in the same language as a consumer’s primary language.
Under California law, a vast range of consumer contracts must be provided in translated form if they are negotiated in Spanish, Chinese, Tagalog, Vietnamese, or Korean—the five most common non-English languages spoken in California.
On December 16, 2020, the U.S. Department of Energy (DOE) announced the Solar Energy Technologies Office (SETO) Fiscal Year 2021 Systems Integration and Hardware Incubator funding program, which will provide $45 million for projects that will advance research in solar hardware and systems integration, including the creation of an consortium dedicated to developing control technologies for a modernized electric grid.
These projects will help achieve DOE's goal of improving the reliability, resilience, and domestic benefit of solar technologies on the grid. Learn more about SETO’s goals and how to apply for a funding opportunity.
Brush-Up on New Contracting Laws that Come into Play
January 1, 2021
SACRAMENTO – As we make our way into the new year, CSLB would like to highlight some construction-related laws that will go into effect January 1. Pay close attention to these changes, including an extension for seniors’ right to cancel a contract (AB 2471) and the direct authority for the registrar to take disciplinary action for tree worker safety violations (AB 2210). These updates, and the others mentioned below, may impact the way licensees conduct business.
As part of the California Public Utility Commissions consumer protection decisions, the California State License Board ("CSLB") now has the ability to review contracts submitted as part of the interconnection process in IOU territories. In July, the CSLB reviewed 153 contracts to ensure the contractors were licensed, the Home Improvement Salesperson or “HIS” (if applicable) was registered to the prime contractor and that the contracts were complying with state contract law. While all the contractors were properly licensed, the CSLB did find that over 90% of the contracts were not complying with HIS or home improvement contractor requirements.
The CSLB's findings and instructions for complying with the state law were, as follows:
- CSLB found 50 contracts where the HIS was not registered with the CSLB and another 12 where the HIS was not registered to the prime contractor.
- 141 of the contracts did not follow contract law regarding commencement and completion dates. All contracts must have an approximate start date and completion date.
- 149 of the contracts did not follow rules regarding payment schedules
Linda F. Hersey Senior Contributor*
The U.S. clean tech sector is on pace in 2020 to regain its status as the world’s largest energy storage market. California, which has surpassed a half-million jobs in the clean tech economy, leads the nation in solar installations coupled with battery storage systems.
State and federal policies that advance clean technology, declining battery prices and better technology help to drive growth, with revenues projected to grow from $2 billion this year to $12 billion by 2025.
Not only is the state encouraging major battery storage projects, such as San Diego County’s Gateway project (touted as the largest of its kind in the world), California is “on the verge of a breakthrough in sales” of residential energy storage units, according to Bloomberg News. Home energy system sales may quadruple by the end of the year, and are projected to grow at a faster clip in 2021.
Government Policies Encourage Growth
“We want to accelerate a trend you are seeing around the rest of the world,” California Gov. Gavin Newsom said on All Things Considered. “And that primarily will be through battery storage technology, which is really taking shape, which for us will be a game changer, and we think for this nation, as it relates to our transition to renewable power.”
SACRAMENTO – The Contractors State License Board (CSLB) is reminding licensed contractors that it is critically important to follow California law when it comes to contract requirements for solar projects. The installation of a residential solar system is considered home improvement and any contract for a residential solar system must follow the home improvement contract requirements in the Contractors State License Law
The amount of funding about to be injected into the cleantech industry in what President-elect Biden calls the “Clean Energy Revolution” is unprecedented. A historic investment in energy and climate research and innovation, as well as clean and resilient infrastructure and communities, begins in 2021. Given that fossil fuels still comprise nearly 80 percent of global energy use, the market growth potential for the cleantech industry is unfathomable by most.
This article was co-authored by Angela Lipanovich, Esq., Founder of Estriatus Law, PC and Jan Freiwald, PhD, Executive Director of Reef Check. Ms. Lipanovich is a cleantech attorney with decades of experience in the renewable energy industry. Dr. Freiwald specializes in marine science and runs Reef Check an international ocean conservation NGO with projects focused on climate science around the world. This article is also posted on Estriatus Law’s Legal Review blog.
As we look across the charred remains of our communities from wildfires, an opportunity unfolds. To live wiser, more prepared and resilient is possible with the right education and action. It is true that some of the causes of climate change are natural, that the earth’s weather patterns have waxed and waned over centuries and millennia. Our responsibility lies in what we can control. While some communities are rebuilding and planning for their next extreme weather event, no community is safe forever. It is only a question of when a fire, hurricane, tornado, earthquake, tsunami, sea level rise, heat wave, cold front or other weather event comes, and they are becoming more frequent.
Given that the science about humans’ contribution to climate change and its very existence is clear now, why are many so called “climate deniers” holding fast to views that climate change is not human-made and over time things will even out eventually? Do biblical stories about God creating floods and other weather events play into this thinking? In search of the answer, we asked a “climate denier” to explain her viewpoint and help us understand when her views were established. For purposes of this article, she has chosen to remain anonymous.
Excerpt from Our Interview
Question: “Do you believe that climate change is real?”
Answer: “I believe climate change is happening, but not that it is human-made. There have always been extreme weather conditions over time. I believe that eventually things will stabilize.”
Question: “Where did you get the information for forming your beliefs on climate change?”
Answer: “I don’t remember exactly. I have read articles and stories that talk about climate change not being the result of human activities. Really, I just believe that you have to trust your instincts on these types of things.”
Question: “If we showed you a report from an international group of scientists which said that climate change is real and human activities are a significant contributing factor, would that change your mind?”
Answer: [pause thinking] “I don’t think so . . . no it wouldn’t. I would just look for reports that say the opposite. I know they exist. Corporate money is behind the reports about saying climate change is caused by the use of fossil fuels. I wouldn’t believe those reports. I mean, California has a law, I can’t remember exactly what it requires, but it is something like no more fossil fuels are allowed. And, look at California - nothing has changes over its skies.”
Question: “Do you realize that climate change doesn’t just affect one area? Rather, it is something that impacts weather systems worldwide?”
Answer: “Yes, I understand that, but it doesn’t affect my opinion.”
Our Thoughts On How Climate Deniers Form Their Beliefs
As doctorate professionals with specialties focused on climate related issues, we sought to extract lessons from this interview to understand how climate deniers form their beliefs despite a 99.9% scientific consensus otherwise. This article summarizes our analysis of a thinking that is common now in many areas of the United States.
As fires rage across the West Coast and political tensions rise, a mounting fear underlies it all. Many people fear the elite (e.g., corporate money for the interviewee, or academia for others) and all they represent, to the extent they consider them a boon to an American sense of freedom to do what you want, when you want (e.g., your instincts). Many others fear that if a President is not elected who prioritizes stopping climate change that our planet will become uninhabitable.
Both sides are entrenched and their opinions are strengthened by what psychology refers to as “confirmation bias” that suggests that once people have formed a view, they embrace information that confirms that view while ignoring or rejecting information that casts doubt on it. Basically, people pick the data that makes them feel right because it confirms their ideas. Confirmation bias results in people failing to be able to perceive situations objectively.
Confirmation bias is what leads people to trust their own judgment on scientific issues related to climate science. The stories of disbelievers in human caused climate change come in different variations, such as the beliefs of the person we interviewed, that climate change is happening, but it is not human-made; to that God alone can control the weather, to that there have always been extreme weather conditions and over time things stabilize eventually. These themes are repeated in the media and in conversations among likeminded people. It makes people feel good to confirm their beliefs — something that can make people become prisoners of their own assumptions. This leads to distrust towards those who they see as “others” in the erudites who line the halls of higher education across the world because to accept that those others might be right is the most fearful thing they can imagine – a loss of control over what to believe, their faith and how to act according to their instincts or in their own best interest.
But, how was it possible for this confirmation bias to become so entrenched when the science is so clear? To understand the answer to this, is to understand that most people were actually taught the exact opposite of today’s understanding of climate and human impacts on the world when they were in school. Disbelievers in human caused climate change, for example, have concluded that because California’s skies are still hazy, it must all be a hoax — or that there is nothing anyone can do.
Climate Science
Climate science began in the 70s and 80s.[1] Of course, it was not taught in high school or college to Baby Boomers (now 56 to 74 years old) or even to Gen X (now 40 to 55 years old).[2] It was only about thirty years ago that climate science proved that human activities can have global climate impacts.[3] Climate science became a widespread academic field and was gradually integrated into primary and secondary education (e.g. elementary and high school) during the Millennial’s generation, born between 1980 and 1994. Even still, studies as late as 2016, show that climate change is not being taught according to the global scientific consensus in almost 2/3 of America’s school system.[4] This means that 2/3 of America’s high-schoolers are still not being taught what 99.9% of the scientists worldwide agree on.[5] Previous generations were taught that the skies and oceans are so big that humans could not possibly have any impact on them.
Literally, Baby Boomers and Gen X were taught the opposite of today’s global scientific consensus. Is it any wonder that many people from these generations do not believe that we are having an enormous, frightening impact on the skies and oceans?
The main proof that human activities are causing climate change became public knowledge in the early 1990s.[6] As a result of improving fidelity of computer models and observational work confirming the Milankovitch theory of the ice ages, a consensus position formed: greenhouse gases were deeply involved in most climate processes and human-caused emissions were bringing discernible rise in average global temperature.[7] Since the 1990s, research has expanded our understanding of causal relations, has created links with historic data and increased our ability to model climate change numerically.
Climate change is caused by factors that include oceanic processes (such as oceanic circulation), biotic processes (e.g., plants), variations in solar radiation received by Earth, plate tectonics and volcanic eruptions, and human-induced alterations of the natural world.[8] The term “climate change” includes both the global warming driven by human emissions of greenhouse gases, and the resulting large-scale shifts in weather patterns. While climate change, broadly interpreted, is a significant and lasting change in the statistical distribution of weather patterns over periods ranging from decades to millions of years, it is the current human caused contributing factors that are within our control to stop. So arguments that climate change is natural are not wrong but they are distracting from the real issue.
Who’s Responsibility Is It?
Some may argue that people are responsible for educating themselves after they finish their formal schooling. But who is justified to say that people should prioritize education over other interests? Many school systems suggest that high-schoolers have learned the essentials of life and that the pillars of knowledge they were taught when young will never change. Therefore, people assume that what they have learned in school is fact. Only in higher education are students taught that basic ideas can change and that what we learn today is only our best attempt at understanding the world. It is not the end all and, in fact, is likely to change as we conduct further research and study. Many people are simply not interested in reading scientific literature, taking continuing education or even reading non-fiction. Instead they pick-up bits of information (or miss information) that confirms their beliefs and what they have been taught when younger.
Our Conclusions
The learning curve about climate change is similar to that about smoking before everyone knew the risks. Only decades ago, at the end of school and work days, kids sat in living rooms and at kitchen tables while their parents chain smoked cigarettes to talk about their days. Now, we know that just as smoking cigarettes causes cancer, human activities can impact our weather systems. Yet, the education on human contribution to climate change is far behind that of cigarette smoking’s link to cancer. This needs to change.
Only in 2013, were Next Generation Science Standards (NGSS) introduced that explicitly include climate change in science curriculum. As of 2019, nineteen states and Washington, D.C., had adopted NGSS and twenty-one states developed similar standards that require teaching climate change in K-12 education. [9] Under NGSS, middle and high school students are expected to learn about how human activities—such as the burning of fossil fuels—contribute to global warming. They are also required to learn the various alternative technologies that produce less pollution and waste and consequently mitigate the impacts of climate change. It took more than 20 years from the first international assessment of climate change until American schools began to teach about it. As more schools across the nation adopt middle and high school curriculums on climate change such as the NGSS or those based on curriculums such as those created by Stanford’s School of Earth, Energy & Environmental Science for example, the dangers of confirmation bias in climate deniers will lessen.[10]
If federal leadership is going to be elected that prioritizes climate change, “green” industries and their institutional investors must build on and address these recent educational efforts. In this regard, fossil fuel money has been much more effective than “green” money with decades of influence campaigns directed at all levels of educational institutions.[11] This makes sense, because if you are in an industry that is blamed for climate change, such as coal, you will go to great lengths to keep your job and to deny you are part of the problem.[12]
Every step that our nation takes to teach accurate information on climate change is progress in creating the unified support needed to elect federal leadership that prioritizes climate change appropriately as one of the most important issues our nations faces. Compassion for those who learned differently must co-exist with the fear of where we are headed if climate change is not stopped. Those fortunate enough to have received high quality education and current scientific knowledge about climate change have an obligation to educate others — so that they too can be part of the solution.
Moreover, regardless of the level of education, it is the understanding that our knowledge about the world and how it works is changing that needs to be taught. The thinking in absolute truths and confirmation bias is a result of a flawed education system that failed to teach students about the constantly expanding nature of knowledge. For instance, teaching climate change is essential but if it is only taught as another “universal” fact then we are not addressing the issue remaining that people will believe what they were taught when young and not change their opinion as new information and knowledge becomes available. Without teaching that knowledge is changing and expanding and that what we learned when young might not be true as time goes on our society will not be ready for an ever faster changing world. “Green” industries have an obligation to assist in ensuring all people, no matter their background, race or age, have access to this type of education.
The investment of resources in education to ensure that good policies and leadership result at the federal level will take time to produce tangible results; but this is the long game. As Ruth Bater Ginsburg said: “Real change, enduring change, happens one step at a time.”[13] True leadership on climate change must include a compassion for why people believe what they do today along with a rethinking of how we approach science education and climate change in our school systems. It is with compassion that embraces everyone no matter who they are or what they believe that will enable us all to live in a safer future.
***
[1] “Climate science” is the scientific study of weather conditions that exist in an area over a long period, and how and why they might change. See https://www.collinsdictionary.com/dictionary/english/climate-science
[2] Baby Boomers born between 1946 and 1964 are now 56 to 74 years old. Gen X born between 1965 and 1980 are now 40 to 55 years old. See https://en.wikipedia.org/wiki/Baby_boomers
[3] A Brief History of Climate Change at https://www.bbc.com/news/science-environment-15874560
[4] Article: Climate confusion among U.S. teachers available at https://science.sciencemag.org/content/351/6274/664.full
[5] “The scientific “consensus” on climate change has gotten stronger, surging past the famous — and controversial — figure of 97% to more than 99.9%, according to a study by James L. Powell, director of the National Physical Sciences Consortium, he reviewed more than 24,000 peer-reviewed papers from nearly 70,000 authors on global warming published in 2013 and 2014. Only four reject anthropogenic climate change. See: Powell JL. Climate Scientists Virtually Unanimous: Anthropogenic Global Warming Is True. Bulletin of Science, Technology & Society. 2015;35(5-6):121-124. doi:10.1177/0270467616634958.
[6] Climate Change: The IPCC 1990 and 1992 Assessments. IPCC First Assessment Report Overview and Policymaker Summaries and 1992 IPCC Supplement. https://www.ipcc.ch/report/climate-change-the-ipcc-1990-and-1992-assessments.
[7] See e.g., https://en.wikipedia.org/wiki/History_of_climate_change_science
[8] See e.g., https://en.wikipedia.org/wiki/History_of_climate_change_science
[9] “Some States Still Lag in Teaching Climate Science” By
Ines Kagubare,
E&E News on February 8, 2019. Available at https://www.scientificamerican.com/article/some-states-still-lag-in-teaching-climate-science/
[10] Stanford’s recommended middle and highschool curriculum can be found at https://earth.stanford.edu/climate-change-ed/curriculum
[11] See., e.g., Merchants of Doubt. Naomi Oreskes & Erik Conway, May 2011.
[12] Could Greta Thunberg Inspire Appalachia And Coal Country To Embrace Change? By Ken Silvertstein. December 15, 2019 @ https://www.forbes.com/sites/kensilverstein/2019/12/15/could-greta-thunberg-inspire-appalachia-and-coal-country-to-embrace-change/#7693fce536d0.
[13] As quoted in "Notorious RBG"
On Friday, the California Public Utility Commission (CPUC) released the 2nd version of their Solar Consumer Protection Guide. Key requirements around electronic signatures are now incorporated in the guide. All California residential contracts signed on or after September 30 must use the guide.
The CPUC released their initial version of the guide in July 2019. Since that time, any residential customer installing solar on an existing home must have signed and initialed the guide before signing a contract. The CPUC initially required a “wet signature” of the guide, but thanks to the advocacy of the California Solar & Storage Association (CALSSA) and others, electronic signatures were ultimately allowed with some key requirements that will go into effect on September 30.
The largest changes to the guide are on the final two pages.
Customers must now affirm the following before signing the guide:
- They have not yet entered into a contract before signing and initialing the guide.
- The solar provider gave the customer a complete copy of the guide before collecting their initials and signatures.
- The solar provider gave a copy of the guide in Español, 中文, 한국어, Tiếng Việt, or Tagalog if they spoke to the customer in one of those languages.
- The customer was given the option to sign electronically or in handwriting.
- If the customer was solicited through a door to door sale, the default for signing and initialing the guide was through a handwritten signature but an electronic signature option was still provided.
- If the customer was solicited through a door to door sale and did not expressly request an electronic version, a paper version of the guide was provided.
The solar provider must now also affirm in what language the sales presentation was principally conducted and list their CSLB license number and classification on the final page (in addition to page four as previously required). If a Home Improvement Salesperson is collecting the guide, they must now list their registration number on page four.
As part of the interconnection process beginning on September 30, there will be a few more fields contractors must complete. Contractors are now required to include the PACE administrator license number whenever a system is financed via PACE. For all financed systems using a non-PACE financial entity, contractors will be required to give the name of that financier. If there is no financier to name,
contractors may simply write “cash” in the field.
It is now explicitly written in the guide that the CPUC recommends solar providers provide the guide at first contact with a customer.
The California Energy Commission (CEC) today clarified that statewide orders in response to COVID-19 identifying essential electricity industry workers includes solar photovoltaic and energy storage installers.
The ongoing health and safety of all Californians is of upmost importance to the State of California and the (CEC). Consistent with Governor Gavin Newsom’s Executive Order to combat the COVID-19 Pandemic (
N-33-20, dated March 19, 2020), the CEC advises all of its partners and stakeholders to abide by its directives.
Under this order, the California Department of Public Health’s (CDPH) State Public Health Officer has ordered, “all individuals living in the State of California to stay home or at their place of residence except as needed to maintain continuity of operations of the federal critical infrastructure sectors, as outlined here. In addition, and in consultation with the Director of the Governor's Office of Emergency Services, I may designate additional sectors as critical in order to protect the health and well-being of all Californians.”
The State Public Health Officer has designated
essential critical infrastructure workers needed at this time to support critical sectors, including the construction and energy sectors, as detailed
here. This list of essential workers is updated as needed. The list of identified essential workers for the electricity industry includes “workers who maintain, ensure, or restore the generation, transmission, and distribution of electric power…” This list includes workers whose efforts are needed to supply electricity to households and businesses, and essential workers such as electricians who provide services that are necessary to maintaining the essential operation of construction sites and construction projects (including those that support such projects to ensure the ongoing availability of electricity).
Installation and maintenance of photovoltaics (PV) and energy storage projects have the added importance of supporting the resilience and continued operations of critical equipment and infrastructure across the state that requires uninterrupted power. This may include medical equipment and other devices necessary to ensure ongoing health and safety in consideration of potential grid outages and/or public safety power shutoffs that may occur in the future.
All essential workers are instructed to follow the
public health guidelines issued by CDPH and local public health officials, including social distancing and staying home when sick to protect those they serve, their coworkers, and themselves.
As efforts to control the spread of the virus continue, state and local officials are regularly updating their directives and guidance. Consistent with their authority, some local jurisdictions have placed additional restrictions beyond those put in place by Governor Newsom and CDPH.
To ensure essential services are provided, the CEC supports local enforcement agencies continuing to permit building construction and energy projects, including PV and battery storage installations for both newly constructed and existing buildings. Please contact your local enforcement agency to verify which permitting services are available in your area.
For more information and assistance, the CEC’s
Energy Standards Hotline is responding to emails daily, Monday through Friday. Please leave a voice message to receive a telephone response. Your understanding, cooperation, and patience in these challenging times is appreciated.
Over the weekend, the federal Cypersecurity and Infrastructure Security Agency issued an updated “Coronavirus Guidance for America” memo to further clarify essential critical infrastructure workers during COVID-19. The guidance specifically identifies renewable energy workers as essential.
Among other things, the memo states, as follows:
“Workers supporting the energy sector through renewable energy infrastructure (including, but not limited to wind, solar, biomass, hydrogen, ocean, geothermal, and/or hydroelectric), including those supporting construction, manufacturing, transportation, permitting, operation/maintenance, monitoring, and logistics. . .
Manufacturing and distribution of equipment, supplies, and parts necessary to maintain production, maintenance, restoration, and service at energy sector facilities (across all energy sector segments). . .
Workers at renewable energy infrastructure (including, but not limited to wind, solar, biomass, hydrogen, geothermal, and/or hydroelectric), including those supporting construction, manufacturing, transportation, permitting, operation/maintenance, monitoring, and logistics.”
Some helpful guidance from the California Solar & Storage Association on COVID-19's impact on cleantech industry services:
COVID-19 Essential Services Memo
March 21, 2020 at 1:00pm
Based on the published guidance available as of the date and time of this memo, CALSSA concludes that the local and state orders, and the federal guidelines, allow for the continued work of the solar energy and energy storage industry under the essential services exemption provided the industry adheres to social distancing standards to the greatest extent possible.
While this document is intended to provide information related to those exemptions, it is critical that the industry use common sense and uphold a strong commitment to meeting the intent and spirit of the Shelter in Place orders. Protecting our workers, our customers, and our community is ultimately our highest priority and clearest guiding principle. This includes following CDC and OSHA social distancing recommendations, some of which are highlighted in this memo. As California faces another electricity crisis in the near future with fire season soon upon us, we must work together to build stronger, more resilient communities and we must do so in the safest manner possible.
As we all know, the governmental response to the COVID-19 crisis is changing by the hour. CALSSA will do its best to stay on top of this dynamic situation and to post updated information as the situation develops on our COVID-19 resources page. We encourage our members to track and follow the updated guidance provided by local governments in your service areas.
STATE GUIDANCE ON ESSENTIAL SERVICES
On March 19, 2020, the State of California issued a statewide Shelter In Place order stating (1):
"The California State Public Health Officer and Director of the California Department of Public Health is ordering all individuals living in the State of California to stay home or at their place of residence, except as needed to maintain continuity of operation of the federal critical infrastructure sectors, critical government services, schools, childcare, and construction, including housing construction." (2) (emphasis added)
On March 20, 2020, the State of California added to their COVID-19 webpage a “list of Essential Critical Infrastructure Workers (pdf). This document tracks with the federal guidance documents cited in the statewide order from the previous day.
(1) Order of the State Public Health Officer, March 19, 2020 found at https://www.cdph.ca.gov/Programs/CID/DCDC/CDPH%20Document%20Library/COVID19/Health%20Order%203.19.2020.pdf and Executive Order N-33-20 found at https://covid19.ca.gov/img/ExecutiveOrder-N-33-20.pdf.
(2) It is important to note that the 2019 Building Energy Efficiency Standards (Title 24 of the Codes of Regulations) for low-rise residential buildings include minimum requirements for solar energy systems. See California Energy Commission, “Residential Compliance Manual for the 2019 Building Energy Efficiency Standards, Title 24, Part 6, and Associated Administrative Regulations in Part 1”, page 7-1.
Cleantech Group is putting on an interesting event in Luxembourg from May 18th to 20th. Check it out here: Cleantech Forum Europe.
This will be a good chance to network with people and companies that are in the cleantech space. We like the broad range of cleantech areas covered in the session tracks, such as cleantech agriculture and food, energy and power, materials and chemicals, transportation and logistics and enabling technologies.
Send us a message at info@cleantechdocs.com, if you can fit this event into your schedule. We'd love to connect with any CleanTech Docs members who are attending.
Recently, California's Contractors State License Board (CSLB) provided an advisory to affirm California protections for solar energy consumers set forth in existing law. All companies engaged in the sale of solar to residential customers would be well advised to take note of the advisory. A summary of the advisory is provided in this blog post below.
C-46 Solar Contractor License Specialty Classification
The CSLB is the primary state agency that is charged with investigating and enforcing compliance with the Contractors’ State License Law for the protection of the public (Business and Professions Code (BPC) §§7006, 7011.4). “The purpose of the licensing law is to protect the public from incompetence and dishonesty in those who provide building and construction services. The licensing requirements provide minimal assurance that all persons offering such services in California have the requisite skill and character, understand applicable local laws and codes, and know the rudiments of administering a contracting business” (UDC-Universal Development v. CH2M Hill (2010) 181 Cal.App.4th 10, 24).
In 1983, CSLB adopted the C-46 Solar Contractor specialty classification. California Code of Regulations, title 16, section 832.46 defines the C-46 classification as follows:
- A solar contractor installs, modifies, maintains, and repairs thermal and photovoltaic solar energy systems.
- A licensee classified in this section shall not undertake or perform building or construction trades, crafts, or skills, except when required to install a thermal or photovoltaic solar energy system.
When a person undertakes work in the C-46 classification, the person is considered a “solar contractor.” Therefore, to perform work under a solar lease or sales agreement to install, modify, maintain, or repair a photovoltaic solar energy system for a home, a person is required to have a C-46 solar contractor’s license (for more information see p.19 of CSLB’s Description of Classifications). Installation of a solar energy product is a “home improvement,” which can only be done by a licensed contractor (BPC §7151).
Lead Generation, Solar Brokering, and Notice of Protections for Consumers
A licensed contractor is permitted to solicit, negotiate, execute, and sell contracts for the installation of these systems personally or through an employee who is a registered salesperson with the CSLB (BPC §§7151.2, 7152, 7154). However, it is becoming common in California for third parties who are not registered salespersons working for licensed solar contractors to generate leads for solar contractors (“lead generators”) or to sell solar contracts to consumers and assist consumers in locating a contractor (“solar brokering”).
Lead generators market solar energy systems to consumers and then sell the list of interested customers to a particular solar contractor or even to multiple contractors. Solar brokers may present themselves as independent contractors who work on system design, price, size, and product with the consumer, and then locate a contractor on the consumer’s behalf. While lead generation and solar brokering through unlicensed salespeople has become a popular method of selling solar technology, in almost all cases soliciting, selling, negotiating, or executing contracts for the installation of these systems requires the salesperson to be employed by a licensed contractor and registered with the CSLB (BPC §§7151.2, 7152, 7154). Thus, the legal scope of functions of an unlicensed lead generator or unregistered or unlicensed solar broker is limited.
While the Business and Professions Code prohibits unlicensed operators from advertising for work requiring a contractor’s license, a lead generator or solar broker may serve as a referral source for licensed contractors, provide contractor contact information to prospective customers, and set up appointments for licensed contractors or their registered home improvement salespersons (BPC §7152 (c)(5)). However, solar energy lead generators or solar brokers cannot provide quotes or offers for the sale and installation of solar photovoltaic systems. This can be done only by a licensed contractor or a registered salesperson who is an employee of a licensed contractor (BPC §§ 7152, 7154). It is a misdemeanor for any person to engage in selling home improvement goods and services without registering with the CSLB (BPC §7153).
The CSLB remains committed to ensuring that the Contractor’s State License Law is followed in the marketing and sale of clean technology home improvements to consumers, and to ensure that consumers are protected from unscrupulous marketing and sales tactics by unlicensed salespeople and installers in an ever-growing solar energy market.
In case you are also starting 2020 with the goal of making your biggest impact on stopping a climate catastrophe, here is some data on how to have the biggest potential impact.
Project Drawdown’s ranking of the 80 solutions with the greatest potential impact on the CO2 challenge, if scaled by 2050.
|
|
|
|
|
|
| 1 |
Refrigerant Management |
Materials |
89.74 |
N/A |
$-902.77 |
| 2 |
Wind Turbines (Onshore) |
Electricity Generation |
84.60 |
$1,225.37 |
$7,425.00 |
| 3 |
Reduced Food Waste |
Food |
70.53 |
N/A |
N/A |
| 4 |
Plant-Rich Diet |
Food |
66.11 |
N/A |
N/A |
| 5 |
Tropical Forests |
Land Use |
61.23 |
N/A |
N/A |
| 6 |
Educating Girls |
Women and Girls |
51.48 |
N/A |
N/A |
| 7 |
Family Planning |
Women and Girls |
51.48 |
N/A |
N/A |
| 8 |
Solar Farms |
Electricity Generation |
36.90 |
$-80.60 |
$5,023.84 |
| 9 |
Silvopasture |
Food |
31.19 |
$41.59 |
$699.37 |
| 10 |
Rooftop Solar |
Electricity Generation |
24.60 |
$453.14 |
$3,457.63 |
| 11 |
Regenerative Agriculture |
Food |
23.15 |
$57.22 |
$1,928.10 |
| 12 |
Temperate Forests |
Land Use |
22.61 |
N/A |
N/A |
| 13 |
Peatlands |
Land Use |
21.57 |
N/A |
N/A |
| 14 |
Tropical Staple Trees |
Food |
20.19 |
$120.07 |
$626.97 |
| 15 |
Afforestation |
Land Use |
18.06 |
$29.44 |
$392.33 |
| 16 |
Conservation Agriculture |
Food |
17.35 |
$37.53 |
$2,119.07 |
| 17 |
Tree Intercropping |
Food |
17.20 |
$146.99 |
$22.10 |
| 18 |
Geothermal |
Electricity Generation |
16.60 |
$-155.48 |
$1,024.34 |
| 19 |
Managed Grazing |
Food |
16.34 |
$50.48 |
$735.27 |
| 20 |
Nuclear |
Electricity Generation |
16.09 |
$0.88 |
$1,713.40 |
| 21 |
Clean Cookstoves |
Food |
15.81 |
$72.16 |
$166.28 |
| 22 |
Wind Turbines (Offshore) |
Electricity Generation |
14.10 |
$545.30 |
$762.50 |
| 23 |
Farmland Restoration |
Food |
14.08 |
$72.24 |
$1,342.47 |
| 24 |
Improved Rice Cultivation |
Food |
11.34 |
N/A |
$519.06 |
| 25 |
Concentrated Solar |
Electricity Generation |
10.90 |
$1,319.70 |
$413.85 |
| 26 |
Electric Vehicles |
Transport |
10.80 |
$14,148.00 |
$9,726.40 |
| 27 |
District Heating |
Buildings and Cities |
9.38 |
$457.10 |
$3,543.50 |
| 28 |
Multistrata Agroforestry |
Food |
9.28 |
$26.76 |
$709.75 |
| 29 |
Wave and Tidal |
Electricity Generation |
9.20 |
$411.84 |
$-1,004.70 |
| 30 |
Methane Digesters (Large) |
Electricity Generation |
8.40 |
$201.41 |
$148.83 |
| 31 |
Insulation |
Buildings and Cities |
8.27 |
$3,655.92 |
$2,513.33 |
| 32 |
Ships |
Transport |
7.87 |
$915.93 |
$424.38 |
| 33 |
LED Lighting (Household) |
Buildings and Cities |
7.81 |
$323.52 |
$1,729.54 |
| 34 |
Biomass |
Electricity Generation |
7.50 |
$402.31 |
$519.35 |
| 35 |
Bamboo |
Land Use |
7.22 |
$23.79 |
$264.80 |
| 36 |
Alternative Cement |
Materials |
6.69 |
$-273.90 |
N/A |
| 37 |
Mass Transit |
Transport |
6.57 |
N/A |
$2,379.73 |
| 38 |
Forest Protection |
Land Use |
6.20 |
N/A |
N/A |
| 39 |
Indigenous Peoples’ Land Management |
Land Use |
6.19 |
N/A |
N/A |
| 40 |
Trucks |
Transport |
6.18 |
$543.54 |
$2,781.63 |
| 41 |
Solar Water |
Electricity Generation |
6.08 |
$2.99 |
$773.65 |
| 42 |
Heat Pumps |
Buildings and Cities |
5.20 |
$118.71 |
$1,546.66 |
| 43 |
Airplanes |
Transport |
5.05 |
$662.42 |
$3,187.80 |
| 44 |
LED Lighting (Commercial) |
Buildings and Cities |
5.04 |
$-205.05 |
$1,089.63 |
| 45 |
Building Automation |
Buildings and Cities |
4.62 |
$68.12 |
$880.55 |
| 46 |
Water Saving - Home |
Materials |
4.61 |
$72.44 |
$1,800.12 |
| 47 |
Bioplastic |
Materials |
4.30 |
$19.15 |
N/A |
| 48 |
In-Stream Hydro |
Electricity Generation |
4.00 |
$202.53 |
$568.36 |
| 49 |
Cars |
Transport |
4.00 |
$-598.69 |
$1,761.72 |
| 50 |
Cogeneration |
Electricity Generation |
3.97 |
$279.25 |
$566.93 |
| 51 |
Perennial Biomass |
Land Use |
3.33 |
$77.94 |
$541.89 |
| 52 |
Coastal Wetlands |
Land Use |
3.19 |
N/A |
N/A |
| 53 |
System of Rice Intensification |
Food |
3.13 |
N/A |
$677.83 |
| 54 |
Walkable Cities |
Buildings and Cities |
2.92 |
N/A |
$3,278.24 |
| 55 |
Household Recycling |
Materials |
2.77 |
$366.92 |
$71.13 |
| 56 |
Industrial Recycling |
Materials |
2.77 |
$366.92 |
$71.13 |
| 57 |
Smart Thermostats |
Buildings and Cities |
2.62 |
$74.16 |
$640.10 |
| 58 |
Landfill Methane |
Buildings and Cities |
2.50 |
$-1.82 |
$67.57 |
| 59 |
Bike Infrastructure |
Buildings and Cities |
2.31 |
$-2,026.97 |
$400.47 |
| 60 |
Composting |
Food |
2.28 |
$-63.72 |
$-60.82 |
| 61 |
Smart Glass |
Buildings and Cities |
2.19 |
$932.30 |
$325.10 |
| 62 |
Women Smallholders |
Women and Girls |
2.06 |
N/A |
$87.60 |
| 63 |
Telepresence |
Transport |
1.99 |
$127.72 |
$1,310.59 |
| 64 |
Methane Digesters (Small) |
Electricity Generation |
1.90 |
$15.50 |
$13.90 |
| 65 |
Nutrient Management |
Food |
1.81 |
N/A |
$102.32 |
| 66 |
High-speed Rail |
Transport |
1.52 |
$1,038.42 |
$368.10 |
| 67 |
Farmland Irrigation |
Food |
1.33 |
$216.16 |
$429.67 |
| 68 |
Waste-to-Energy |
Electricity Generation |
1.10 |
$36.00 |
$19.82 |
| 69 |
Electric Bikes |
Transport |
0.96 |
$106.75 |
$226.07 |
| 70 |
Recycled Paper |
Materials |
0.90 |
$573.48 |
N/A |
| 71 |
Water Distribution |
Buildings and Cities |
0.87 |
$137.37 |
$903.11 |
| 72 |
Biochar |
Food |
0.81 |
N/A |
N/A |
| 73 |
Green Roofs |
Buildings and Cities |
0.77 |
$1,393.29 |
$988.46 |
| 74 |
Trains |
Transport |
0.52 |
$808.64 |
$313.86 |
| 75 |
Ridesharing |
Transport |
0.32 |
N/A |
$185.56 |
| 76 |
Micro Wind |
Electricity Generation |
0.20 |
$36.12 |
$19.90 |
| 77 |
Energy Storage (Distributed) |
Electricity Generation |
N/A |
N/A |
N/A |
| 77 |
Energy Storage (Utilities) |
Electricity Generation |
N/A |
N/A |
N/A |
| 77 |
Grid Flexibility |
Electricity Generation |
N/A |
N/A |
N/A |
| 78 |
Microgrids |
Electricity Generation |
N/A |
N/A |
N/A |
| 79 |
Net Zero Buildings |
Buildings and Cities |
N/A |
N/A |
N/A |
| 80 |
Retrofitting |
Buildings and Cities |
N/A |
N/A |
N/A |
The California Contractors State License Board (CSLB) has summarized the new laws that will go into effect this January. Take note of these laws as they may change the way cleantech contractors need to do business in California.
Assembly Bill (AB) 754 requires solar contractors that excavate or put in a ground rod to call “811” prior to obtaining a permit to install a solar energy system. (Chapter 494, Statutes of 2019)
Assembly Bill (AB) 178 specifies that residential construction to repair or replace a residential building damaged or destroyed in a declared disaster must comply with any photovoltaic requirements in effect at the time the building was constructed, not at the time of repair of replacement. This bill’s provisions apply to emergencies declared before January 1, 2020 and self-repeals on January 1, 2023. (Chapter 259, Statutes of 2019)
AB 1076 requires the Department of Justice, on a monthly basis, to review the records in the statewide criminal justice databases and identify those eligible for relief by not disclosing their arrest or conviction records, as specified. This bill’s provisions do not apply to offenses requiring sex offender registration or to any pending criminal charges. The bill extends its requirements to the criminal information provided by the department to other entities for employment, licensing, or certification. (Chapter 578, Statutes of 2019)
AB 1296 empowers agencies participating in the Joint Enforcement Strike Force (JESF) on the Underground Economy to request specified information from the Employment Development Department, the California Department of Tax and Fee Administration, and the Franchise Tax Board, for the purposes of investigating tax or fee related crimes.This bill also adds the Department of Justice, the California Department of Tax and Fee Administration, and the Franchise Tax Board to JESF, and authorizes the Department of Motor Vehicles and California Highway Patrol and other agencies to serve JESF in an advisory capacity. The bill authorizes JESF representatives to exchange intelligence, data, documents, confidential information, or lead referrals and authorizes sharing such information with the Labor Enforcement Task Force. (Chapter 626, Statutes of 2019)
AB 1475 clarifies that a construction manager on Department of Transportation projects be a licensed contractor pursuant to Chapter 9 (commencing with Section 7000) of Division 3 of the Business and Professions Code. (Chapter 289, Statutes of 2019)
Senate Bill (SB) 601 authorizes specified state agencies to establish a process for a person or business either displaced or experiencing economic hardship as a result of an emergency to apply for a fee reduction or waiver required to obtain a license, renew or activate a license, or replace a physical license for display. (Chapter 854, Statutes of 2019)
SB 610 extends the Contractors State License Board sunset date from January 1, 2020, to January 1, 2024. Among other provisions, this bill requires CSLB to conduct a study on whether or not the current contractor bond amount is sufficient and report the findings to the Legislature by January 1, 2021. This bill also requires CSLB to charge C-10 (Electrician) contractors a $20 fee to enforce electrician certification requirements, and authorizes CSLB to automatically suspend a contractor’s license for an unsatisfied construction-related judgment entered against a member of the personnel of record of a licensee. (Chapter 378, Statutes of 2019)
An exciting new UL Listing standard solves the problem of long queues to get new meters for storage devices. Many utilities require storage devices have a new meter installed to ensure that solar plus storage customers are not falsely exporting power to the grid for Net Energy Metering ("NEM") credits. The new certification requirements decision ("CRD") for power control systems is a new optional component within UL 1741.
The CRD can certify two operating modes for NEM paired storage. Solar-Only Charging mode guarantees that a battery cannot charge from the grid. In No Grid Exports mode, the battery can charge from the grid but can only discharge for on-site load.
Storage certified according to this new standard becomes a NEM-eligible device verifiably 100% charged from solar without need for a separate meter. This is especially exciting in places like California where the bankrupt utility PG&E is taking 10 months and longer to process new meter requests. We expect this is just one of many advances in storage that we will see in the coming years as the storage industry continues its rapid maturation process.
JOIN LEADERS FROM SOME OF THE WORLD’S MOST INNOVATIVE COMPANIES IN ENGAGING WITH POLICYMAKERS, LAWMAKERS, TECHNOLOGISTS AND NGO’S TO EXPLORE ENVIRONMENTAL PROTECTION IN AN ERA OF TRANSFORMATIVE TECHNOLOGICAL CHANGE. THE INAUGURAL GREENTECH CONFERENCE WILL TAKE PLACE OCTOBER 2-3, 2019, IN DOWNTOWN SEATTLE.
The next fifty years of environmental protection will not look like the first fifty –it will be driven by technology as much as by regulation. Technology is radically reshaping how things are powered, made, and moved. It is allowing us to observe environmental conditions in real time, and to adjust how we produce goods and services to reduce waste and pollution. Technology is not a panacea, but it is an instrument of rapid change, in the world we live in, and in the world of environmental law and protection. This two day conference will explore innovative and transformative technologies – drones, artificial intelligence, sensors, bioengineering and biotechnology among others – and the unique opportunities – and challenges – they present to protecting the environment. It is the start of a conversation with a diverse group of stakeholders, and will include demonstrations, discussion and dialogue.
Register to Attend
Today, the California Public Utilities Commission (CPUC) issued its California Solar Consumer Protection Guide – a must read for anyone considering installing solar.
On August 30, 2019, the guide will also be available in Chinese, Korean, Spanish, Tagalog, and Vietnamese. It will also be released in audio format.
Beginning September 30, 2019, solar providers in the service areas of Pacific Gas and Electric Company, Southern California Edison (SCE), and San Diego Gas & Electric are required to collect customer initials and a signature on the guide.
Solar providers submitting applications to interconnect residential solar customers in the service areas of Pacific Gas and Electric Company (PG&E), Southern California Edison (SCE), and San Diego Gas & Electric (SDG&E) are required to collect customer initials on the first four pages and a signature on the last page of the Guide starting on September 30, 2019. The signed pages must be included, along with the final contract and any required CSLB disclosure forms, with the interconnection application. Additionally, the CPUC requires that the customer be given sufficient time to read the Guide.
Get the guide and more info at: www.cpuc.ca.gov/solarguide
The Clean Energy Business Network through its parent organization, the Business Council for Sustainable Energy, invites all cleantech businesses to sign-on to a broad energy industry letter to the Office of the United States Trade Representative (USTR) to express concern regarding the negative impacts to U.S. industry by the escalating tariffs with China as a result of the Section 301, and in particular the latest round of proposed tariffs.
Do homeowners get more cost benefit from purchasing energy efficiency retrofits or solar energy generation systems? According to a white paper titled “Reducing Home Energy Costs by Combining Solar and Energy Efficiency”1 after “low hanging fruit” upgrades such as LED lighting and air leak repairs, rooftop solar is the next best economic thing for homeowners to do everywhere except for on old buildings in cold climates. But, should the policies that promote energy efficiency retrofits and solar energy generation systems be structured based on consumer economic benefits? And, if so, what solutions will encourage investments by homeowners that make good economic sense for their particular situation?
The answers to these questions are important not only for structuring energy policies that work, but also for all companies working in cleantech as numerous surveys validate that homeowners’ first goal is to save money when making efficiency and solar improvements. Also, it is very confusing for homeowners to sort out the various energy savings claims from contractors, retailers and manufacturers of these products and services.
The emerging solar plus storage market is expected to grow exponentially over the next decade. Last year, California’s most active state solar trade association changed its name from the California Solar Energy Industry Association to the California Solar and Storage Association. Across the nation, battery storage systems are becoming an integral part of the solar energy system design. As a result, sellers of solar plus storage systems must not only stay up to date on the latest industry trends related to solar plus storage, but also the evolving legal considerations of selling solar plus storage systems.
For installers of solar plus storage systems, the standard Solar Installation Agreements for residential and commercial solar energy systems can typically be used with some key modifications. In addition to including sections that cover the battery storage component and a modified scope of work for the installation and design, Solar Plus Storage Installation Agreements should include specific sections covering the contractor’s estimation of the savings potential of the battery.
Every moment of our lives on this precious Earth is a gift. But, we are all in this experience together. There is no escaping that one person’s decisions will affect the whole, and the collective’s impact will affect each individual. This past year since last Earth Day, the globe saw some of the most extreme weather events and human catastrophes we’ve known in the form of wildfires, hurricanes, floods, and other extreme weather events. The world's scientific community has unanimously concluded that we have about 12 years left to limit devastating global warming.
There could never be so true a time to tell people that their own actions matter. There is power in the people.
An important bill just cleared its first major hurdle to becoming law in the State of California. The Solar Bill of Rights (SB 288), a bipartisan bill co-authored by State Senators Weiner (D) and Nielsen (R), was the brainchild of a fairly new non-profit in California called the Solar Rights Alliance. The Solar Rights Alliance (“SRA”) was modeled after the National Rifle Association (“NRA”) with the goal of putting the power to go solar in the hands of the consumers.
Each state has a different set of laws governing the licensing of contractors. Developers must navigate these laws to avoid liability under state law. For instance, in California, only licensed contractors can enter into contracts involving construction activities. In California the licensed contractor must "own" any contract with a property owner (“Owner”) to the extent that the contract includes construction activities, including renewable energy property improvements. (See Cal. Bus. & Prof. Code Section 7026) This rule also applies to using subcontractors. As a result, Developers of renewable energy projects in California cannot subcontract through licensed contractors to avoid the requirement that the licensed contractor must be the one entering into all contracts with the Owner for any labor, equipment, and materials on the renewable energy project.
Tax-exempt entities (such as non-profits, schools, and municipalities) frequently ask what financing options they have when purchasing solar systems given their inability to use the available tax incentives (ITC) and accelerated depreciation (MACRS). It is important to thoroughly explore each of their options before choosing the financing model so that an option with the most favorable economics, risks and deal terms is chosen. Legal and tax advice should be sought early in the process to understand all of the options available to them.
Many companies find it to be advantageous to pay outside sales employees purely on commission. In order to ensure outside sales employees are financially stable, many companies use a recoverable draw against commission system.
Outside sales employees, who spend more than half their time away from the office engaged in selling activities, may be paid on a draw against commission basis because the minimum wage law does not apply to outside salespersons.
Sometimes contractors desire to take on projects when it is impossible to get an accurate estimate of the total project cost, the schedule cannot be defined or changes are likely to be requested during construction. In these situations, figuring out the appropriate cost for estimating the project carries significant risks and limitations for the contractor because the project scope or timeline is uncertain. Time and materials contracts (“Time & Materials Contract”), also called “cost plus contracts,” provide a solution for contractors in this situation as they allow contractors to ensure that all of their costs are covered while working on the projects.
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.
On January 14, 2019, California’s largest utility, PG&E, filed a bankruptcy notice stating that it plans to file for Chapter 11 bankruptcy by the month end on January 29th. Given its business situation, PG&E must proceed with the bankruptcy process unless lawmakers step in because PG&E’s current liabilities from California’s 2017 and 2018 fires are about 10 times PG&E’s current market cap of $3.5 billion, which is down 90% since last Fall. Obviously, this is a big issue for the cleantech industry since PG&E covers a territory that runs from Eureka to Bakersfield, including 106,000 miles of electric grid.
A variety of new construction related laws in California go into effect in 2019. This blog post summarizes the new laws.
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Senate Bill (SB) 721: This new law establishes requirements for inspecting and repairing “exterior elevated elements” for buildings with three or more multi-family dwelling units. It establishes reporting and repair requirements, including timeframes, when repairs are needed. The bill specifies who can complete the inspections and repairs subject to specified experience requirements being met. Building owners who violate the bill’s requirements are subject to civil penalties. (Chapter 445, Statutes of 2018)
If you are looking for a great resource on renewable energy law and policy issues, we recommend checking out Jack Jacobs' recent publication Renewable Energy Law and Policy, 2017 Edition.
Mr. Jacobs is Managing Partner of the law firm Cleantech Law Partners, one of the firms in our legal expert network. His book is a great new resource for anyone looking to get up to speed on the legal and policy issues relevant to businesses working in the cleantech and renewable energy sectors. We are proud to be listed as a trusted resource for the industry in his new book.
This guest blog by Angela Lipanovich, President of Estriatus Law, PC, is also posted on Estriatus Law’s Legal Review.
Absent bribery, fraud or a statutory prohibition, the payment of referral fees is not illegal.
In California, the relevant law covering a contractor's ability to use referrals as lead generating sources is found in Cal. Bus & Prof Code § 7157. This law prohibits contractors that install solar, storage and other clean technologies from paying referral fees for their work on residential properties in certain situations, as follows:
(a) Except as otherwise provided in subdivision (b), as a part of or in connection with the inducement to enter into any home improvement contract or other contract, which may be performed by a contractor, no person may promise or offer to pay, credit, or allow to any owner, compensation or reward for the procurement or placing of home improvement business with others.
(b) A contractor or his or her agent or salesperson may give tangible items to prospective customers for advertising or sales promotion purposes where the gift is not conditioned upon obtaining a contract for home improvement work if the gift does not exceed a value of five dollars ($5) and only one such gift is given in connection with any one transaction.
(c) No salesperson or contractor's agent may accept any compensation of any kind, for or on account of a home improvement transaction, or any other transaction involving a work of improvement, from any person other than the contractor whom he or she represents with respect to the transaction, nor shall the salesperson or agent make any payment to any person other than his or her employer on account of the sales transaction.
(d) No contractor shall pay, credit, or allow any consideration or compensation of any kind to any other contractor or salesperson other than a licensee for or on account of the performance of any work of improvement or services, including, but not limited to, home improvement work or services, except: (1) where the person to or from whom the consideration is to be paid is not subject to or is exempted from the licensing requirements of this chapter, or (2) where the transaction is not subject to the requirements of this chapter.
As used in this section “owners” shall also mean “tenant.”
Commission of any act prohibited by this section is a misdemeanor and constitutes a cause for disciplinary action.
Accordingly, California contractors are not allowed to pay referral fees to induce either an owner to enter a home improvement contract or another contractor or salesperson to refer them work. Other than in these situations, referral fees are legal as long as they do not result in unfairly high prices for the home improvement work.
Although California contractors may not offer free products as an inducement to enter into a contract (even directly to the customer) over $5, they can offer discounts or cash rebates as inducements. Additionally, the law does not bar contractors from paying referral fees to past customers for their own business.
Businesses of all types should check their state's laws with respect to any desired referral situations. The use of referral arrangements can be a very effective lead generating tool when used lawfully and ethically.
A power purchase agreement ("PPA") is a financial agreement where a developer arranges for the design, permitting, financing and installation of a renewable energy system on a customer’s property at little to no cost. PPAs are excellent tools for putting together renewable energy projects. The process of developing PPAs involves lengthy negotiation, robust documentation, significant analysis and due diligence. A Letter of Intent (“LOI”) for a PPA can ensure exclusivity while these details are worked out.
In addition to providing exclusivity, LOIs can include binding commitments on the proposed key terms of the PPA subject to the Developer completing its credit review, securing applicable federal, state, local and/or utility incentives and a satisfactory review of all due diligence, documentation and other conditions. An LOI can also be used to cover binding commitments to ensure that the typical “deal breaker” type of sticking points that can occur during the PPA development process are agreed upon at the outset. Some of these types of binding commitments that parties might want covered in the LOI include the renewable energy system's specifications, an electricity rate cap, energy output requirements, electricity production guaranty, options to purchase, rights of access, financial guaranties and other key deal terms.
Regardless of how the LOI for a PPA is structured, parties often find LOIs to be a helpful tool for preserving the sales opportunity and protecting their investment while they perform the analysis and due diligence required to complete the full set of PPA project documents.
This guest blog by Angela Lipanovich, President of Estriatus Law, PC, is also posted on Estriatus Law’s Legal Review (February 26, 2018).
On February 1, 2018, a cautionary positive tale for unlicensed solar developers and Power Purchase Agreement ("PPA") providers in California unfolded with a court ruling that a company can sell solar energy to homeowners without a contractor’s license if it only “arranges for” a licensed contractor to install the solar energy system. In Reed v. SunRun, Inc. (Los Angeles County Super. Ct. No BC498002, Feb. 1, 2018), the court held that, SunRun, as a solar PPA provider could operate without a contractor’s license because it merely made arrangements with licensed contractors to install solar systems on its customers’ residential properties.
Unfortunately, the court ordered the case to not be published or citable, which in legal terms means that it cannot be relied on as precedence for legal authority in the future. Without the case being published, a defendant similarly situated might not fare as well arguing against the precedence of other published California decisions that seem to restrict “arrangers” unless they carefully craft their contracts and actual activities within a much narrower range of non-construction services than in SunRun’s contracts with homeowners. It’s also unclear whether the court would have reached the same conclusion for an unlicensed solar developer who was doing more than acting as a solar PPA provider selling solar energy to homeowners.
Still, the Court of Appeals’ interpretation of the applicable contractor rules was broad and strongly in favor of third-party solar companies being able to “arrange” solar projects without a contractor license. The case interpreted the statutes in a manner that strongly supports the innovative nature of companies operating in the solar space.
In reaching its conclusion, the court first noted that strong public policy favors that unlicensed contractors should be barred from getting paid for their work. In order to suffer that penalty, however, the entity must be acting as a “contractor” within the definition of established law. Section 7026 states a contractor is “any person who [(1a)] undertakes to or [(1b)] offers to undertake to, or [(1c)] purports to have the capacity to undertake to, or [(1d)] submits a bid to, or [1(e)] does himself or herself or by or through others [(2)] construct, alter, repair, add to, subtract from, improve, move, wreck or demolish any building . . . .” The court used the interpretation of a “builder” in applicable case law to conclude that the term “contractor” should be construed to apply to any person or entities that actually perform construction services, supervise the performance of construction services or agree by contract to be solely responsible for construction services. The court held that a contractor license is not required if an entity merely coordinates construction services performed by others or supplies labor for those services without also doing one of the acts of a builder.
The court found that SunRun’s promise to “arrange for” the installation of the solar energy systems did not qualify as a promise to be “solely responsible” for construction and thus did not require it to have a license and SunRun did not sufficiently supervise the construction to be deemed to be engaged in construction “by or through others.” It noted that SunRun’s “supervision” activities consisted solely of a 2 minute or less review to confirm the as-built plans matched the project scope. This opinion provides comfort for unlicensed entities and persons operating in California as solar PPAs or developers, but caution is still warranted given that this case is unpublished and many other published California cases have taken a much narrower view of the contractor licensing rules that apply to those “arranging” construction activities.
In transactions for the installation of renewable energy projects, “subcontracting” refers to a process whereby the contractor selling the project does not perform all of the work it agreed to perform. Rather, once the project starts, the contractor hires another contractor to perform portions of its scope of work and arranges for the subcontractor to install portions of the renewable energy project. In a typical subcontractor arrangement, the purchaser of the renewable energy project never pays for or accepts the work that is performed by and delivered by the subcontractor. The contents of a subcontractor agreement are essential for protecting the contractor who is on the hook for the work with the purchaser. The key issues that a subcontractor agreement should cover, include among other things, the range of risks and liabilities that the subcontractor will agree to accept, the scope of work to be performed by the subcontractor, work specifications that match the contractor’s agreement with the purchaser, how the work will be paid and the right to retain a certain amount until final acceptance, a work schedule that meets the contractor’s deadlines, indemnification of the contractor in the event of a purchaser or other third-party claim, warranty obligations and adequate insurance requirements. If a contractor intends to hire a subcontractor for multiple projects, it is a good idea to use a master subcontractor agreement so that all of the details do not need to be negotiated each time. A master subcontractor agreement provides for short addendums to be executed for each project that the subcontractor will work on.
For other considerations when hiring subcontractors, see our blog post “Are Contractors Required To Make Sure Other Contractors On Their Projects Are Properly Licensed?”
This guest blog by Angela Lipanovich, President of Estriatus Law, PC, is also posted on Estriatus Law’s Legal Review (January 9, 2018).
Three months ago, a frequent stumbling block to going solar was overcome for California homeowners living in common-interest developments ("CID"), such as condominiums and planned developments. On October 15, 2017, AB 634 (Eggman) amended the CA Solar Rights Act ("Act") with respect to what restrictions governing documents and entities, such as homeowner associations ("Associations"), can impose on solar installation requests in the common areas of common-interest developments. The Act was amended with respect to common areas in CIDs to provide that Associations may not adopt a policy of prohibiting solar installations in common areas. Also, a 67% membership vote is not required to approve a homeowner’s request to install solar in common areas when certain criteria are met. The amendment also defined what types of restrictions on solar installation requests in common areas are allowed. Now, the Act prohibits CIDs from having a general policy prohibiting the installation or use of a rooftop solar energy system for household purposes on the roof of the building in which the owner resides or a garage or carport adjacent to that building that has been assigned to the owner for exclusive use. The Act also prohibits CIDs from requiring approval by a vote of members owning separate interests in the common interest development in those circumstances. The Act requires an applicant that requests to install a solar energy system on a multifamily common area roof shared by more than one homeowner to notify each owner of a unit in the building on which the installation will be located of the application and to require each owner to maintain a homeowner liability coverage policy. The new rules resulting from AB 634 are in addition to the Act’s other restrictions on CIDs, such as those found in Section 714 of the Act protecting homeowners’ solar rights on their separate interest property.
Guest Blog Post Ends Here.
CleanTech Docs has developed two documents for California contractors and homeowners who want to install solar in CIDs. These documents consist of an overview of the applicable rules and regulations that apply to CIDs in California and an appeal letter to CID governing bodies in the event a proposed solar installation is restricted or denied. Any action by a CID governing body that contravenes the California Solar Rights Act is void and unenforceable, so the solar rights of owners in CIDs is soundly protected under California law.
If you are a California contractor or homeowner running into difficulty in trying to install solar in a CID, you might find these resources helpful:
The laws governing the installation of solar and other cleantech projects, and the potential liabilities for breaking them, vary on a state by state basis. However, many states have similar enforcement schemes to California, which is considered by some to be the strictest.
In California, the consequences of operating without a contractor's license range from a potential sentence of up to six months of jail time, to administrative penalties of up to $15,000 for the first offense, to felony charges and no right to get paid for any of the work performed. In regard to the later, California contractor's licensing laws bar unlicensed contractors from maintaining lawsuits "for the collection of compensation for the performance of any act or contract" for which a license is required "regardless of the merits" of the lawsuit. See Cal. Bus. & Prof. Code § 7031, (a), (c). In general, the severe penalty of denying access to the courts will be enforced despite any resulting harshness or injustice to the unlicensed contractor, and there are only very limited exceptions to the rule that unlicensed contractors cannot sue to get paid for their work. Hydrotech Systems, Ltd. v. Oasis Waterpark 52 Cal.3d 988, 995 (1991). Courts have found this penalty is consistent with the purpose of the licensing law, which is to "protect the public from incompetence and dishonesty in those who provide building and construction services" and to provide "minimal assurance that all persons offering such services in California have the requisite skill and character, understand applicable local laws and codes, and know the rudiments of administering a contracting business." Id. Also, if illegal contracting continues, the penalties become more severe. A second offense results in a mandatory 90-day jail sentence and a fine of 20 percent of the contract price or $5,000.
In California, every contractor is required to make sure that any contractor they enter into a contract with has an active, viable contractor's license. Licensed contractors can come under investigation if they work with unlicensed contractors. Although the rules make contracting with unlicensed contractors or aiding, abetting or conspiring with unlicensed contractors subject to disciplinary action, a penalty will only be assessed for “willingly and knowingly” entering into a contract with an unlicensed contractor.
See Cal. Lab. Code Section 1021.5. Courts have held that general contractors are not required to call the California State License Board to confirm their subcontractor’s license status. Also, courts have held that properly licensed subcontractors can recover for their work (and file mechanics liens) despite the failure of the general contractor to be properly licensed. These exceptions are limited and should not be counted on. Contractors should remain vigilant to ensure that other contractors on their projects are properly licensed. If not, they jeopardize their own contractor's license and face a potentially time-consuming and expensive process of trying to prove that they did not "willingly and knowingly” contract with an unlicensed contractor.
As cleantech and renewable energy markets fight for market share, climate change and extreme weather events surge ahead. Climate change, our most pressing problem with the potential to wipe out all life on earth, is becoming more evident every day. While cleantech and renewable energy companies offer a solution to climate change they not only must overcome startup models with tied up capital that are expensive to scale, but also billion dollar competitors using public deception playbooks decades old. However, it is the later that is stalling the transition to a 100% renewable energy economy.
The public deception playbooks being used by cleantech’s competitors are identical to the ones used by the tobacco, chemical and other industries in the past.* The scientists, scientific advisers and think tanks behind these playbooks are in many cases even the same people. It is these groups and their strategies that resulted in decades passing before the campaigns of deception were exposed admitting that the industries agree that tobacco causes lung cancer, coal smoke causes acid rain and CFCs cause the ozone hole.*
During the past century, the process of rectifying global-scale, industry-caused harms has followed the same pattern. Each time, while scientists were doing fundamental research they stumbled on a global-scale harm linked to human activity and industry. These scientific discoveries were publicized by the press and analyzed by federal or state agencies to determine what should be done. Then, the industry identified as the culprit for the harm hired scientists and funded studies to cast doubt on the original scientific discoveries. This resulted in decades of back and forth until the problem became so evident in enough studies and scientists convinced the right governing body to finally overcome the industries’ propaganda of doubt and to take action to rectify the harm identified decades earlier.
We are in the middle of a public deception campaign on climate change. Multiple studies published in peer-reviewed scientific journals show that 97 percent or more of actively publishing climate scientists agree: Climate-warming trends over the past century are due to human activities. Most climatologists agree that another 0.5 degree Celsius rise in temperature, representing a global average atmospheric concentration of carbon dioxide (CO2) of 450 parts per million (ppm), could set in motion unprecedented changes in global climate and a significant increase in the severity of natural disasters—and as such could represent a dreaded point of no return. This led to the goal of the Paris Climate Agreement to limit the raise in global temperature to less than 2 degrees Celsius (3.6 F) above pre-industrial levels. Currently, the atmospheric concentration of CO2 (the leading greenhouse gas) is approximately 398 parts per million (ppm).
Scientists have found that the current CO2 levels, combined with methane (rising toward 1,900 parts per billion) and nitric oxide (around 310ppb), are already amplifying the feedbacks of global warming. Beyond a tipping point these feedback loops would lead to further climate change even if human greenhouse gas emissions are drastically curtailed. Warmer oceans, melting ice, drying vegetation in parts of the continents, would lead to sea level rise, fires, methane release all of which would further increase warming creating the dreaded feedback loop that could spiral out of control. This could commit the Earth to extreme rises of temperature over thousands of years, with consequences consistent with the large mass extinctions.
Despite this consensus on climate change and its devastating effects, the fossil fuel industry’s public deception campaign is stalling meaningful government action to stop the move towards this point of no return. Their campaign is creating doubt about climate change’s threats in the minds of many people. Of Americans’, only 68% believe global warming is caused by human activities, 45% worry a great deal about global warming and 42% believe global warming will play a serious threat in their lifetime.
Whereas the cleantech industry began as a hippie culture, it is no longer a “hippie” industry that depends on pot customers and off-grid living. The majority of people working in cleantech do not associate themselves with the image of an “environmentalist” and typically do not list environmental reasons for why they work in the industry. The desire to not want to be seen as working for passionate, altruistic reasons could be hurting cleantech companies. The environmental roots underlying cleantech are what may help the industry to achieve the monumental amount of growth needed to reverse the trend towards the point of no return in the global climate.
As eloquently stated by the chairman of the president’s Council on Environmental Quality during the CFC rule making proceedings: “the criminal defendant’s presumption of innocence is not appropriate for regulatory decisions under uncertainty.”** This means we have to take precautionary actions when the harms that can be done are uncertain or unknown. While the worst wildfires, hurricanes, and other extreme weather related disasters are occurring around the world, they are both catastrophes for people and also opportunities for cleantech to use as examples when advocating for their businesses at political and regulatory levels.
Regulations, policies and tax breaks in favor of cleantech are not a handout to cleantech and renewable energy companies. They are smart political decisions by government to avoid an ever increasing amount of disaster relief funds. Given the enormous public costs already being expended to combat the effects of climate change, regulations and policies that drastically curtail fossil fuel and other non-cleantech industries save taxpayers’ money. Otherwise, the government will continue to pay increasing amounts to combat the feedbacks of global warming, such as warming and acidifying oceans, melting ice, drying vegetation, fires and methane release.
Cleantech and renewable energy companies could use a page out of fossil fuel’s playbook. By working hand in hand with scientists and scientific advisors, cleantech could have the most successful playbook out there. The science on climate change is clear, and cleantech should be funding and utilizing it to scale to the rate required to stop climate change.
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* Naomi Oreskes and Erik M. Conway, Merchants of Doubt: How A Handful of Scientists Obscured the Truth On Issues From Tobacco Smoke to Global Warming, (New York: Bloomsbury Publishing, 2010).
**Rusell Peterson as quoted in Edward A. Parson, Protecting the Ozone Layer (2003), p. 39.
From installation companies to manufacturing and distribution companies, every business in the cleantech and renewable energy industry is dependent on cutting edge, proprietary know-how and highly valuable customer lists. As compared to other industries, cleantech is exponentially dependent on these trade secrets. It makes sense that one of the top legal concerns we hear from cleantech and renewable energy businesses is how to prevent employees from learning their proprietary know-how and collecting their customer lists, and then bringing all of that trade secret information to work for a competitor.
Due to the importance of trade secrets in cleantech, it is advisable to have confidentiality agreements that define obligations, expectations, and liabilities with respect to a company’s customer lists and other trade secrets. These agreements should be designed to protect the company against employees taking customer lists and other trade secrets to work for competitors. In states, such as California, that prohibit non-compete agreements, the ability to protect a company’s confidential information is the way employers create limits on their employees' ability to compete post-employment. Many states allow non-competition agreements, which provide even more trade secret protections.
With the proper agreements in place, it is much easier for a company to stop unlawful activity when an ex-employee takes trade secrets to a competitor. Often a cease and desist letter that outlines the terms of the confidentiality agreement and the potential liability for using the past employer’s trade secrets is sufficient to stop the unlawful activity.
The nature of cleantech makes it vital to understand the rules around protecting trade secrets.
Navigating California and Other States’ Laws Prohibiting Non-Competition & Protecting Trade Secrets Is Essential For Both Employers And Employees
“Every individual possesses, as a form of property, the right to pursue any calling, business or profession he may choose; he has right to engage in competitive business for himself and to enter into competition with his former employer, even for business of those who were formerly customers of his former employer . . . ” Quote from the 3rd District Appellate Court in Fortna v. Martin (1958, 3rd Dist.) 158 Cal App2d 634.
In states that prohibit non-compete agreements, companies often use laws that protect confidential information and trade secret rights to prevent competition by ex-employees post-employment.
For instance, in California the general rule is that any contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is void. Thus, California law invalidates provisions in employment contracts prohibiting an employee from working for a competitor after completion of his or her employment or imposing a penalty if he or she does so. It is firmly established by California law that a former employee cannot be compelled to "wipe clean" his or her memory.
Given the strong public policy for freedom to compete in states where non-competes are prohibited, only reasonably limited post-employment restrictions in employment agreements such as those necessary to protect an employer's trade secrets are allowed. This “trade secret exception” is what employers rely on to require employees agree not to disclose their confidential customer lists or other trade secrets or not to solicit those customers after employment ends. Thus, an ex-employee can pursue their own competitive calling post-employment but not if they are benefitting from the employer's time and effort expended to create their own "secret sauce" of proprietary technical know-how and non-publicly available leads, contacts and customer profiles.
This means companies can design their confidentiality agreements to provide covenants not to solicit the company’s customers to the extent they are confidential, proprietary, or trade-secret customer information, but not if the identity of the customers is not confidential and therefore not a trade secret.
In regard to protecting customer lists and information, courts have created a distinction of not protecting customer lists to the extent they embody information which is 'readily ascertainable' through public sources, such as business directories. On the other hand, where the employer has expended time and effort identifying customers with particular needs or characteristics, courts will prohibit former employees from using this information to capture a share of the market. As a general principle, the more difficult information is to obtain, and the more time and resources expended by an employer in gathering it, the more likely a court will find such information constitutes a trade secret.
Thus, for cleantech companies in California and other states where non-competes are prohibited, among other things, a well drafted confidentiality agreement should define “confidential information” to include customer lists and prohibit the use of any confidential information by the employee to directly or indirectly solicit clients and other employees for a reasonable time after the employment relationship ends. The agreement should also prohibit the employee from competing during the term of his or her employment. Lastly, companies should adopt prudent business practices that will ensure customer lists and other confidential information are kept secret to maintain the right to protect them.
From the employee’s perspective, these same rules must be navigated when leaving a job to start a competing business.
The main considerations for employees leaving to start a competing business are determining what qualifies as their prior employer’s “confidential information” and understanding what type of conduct rises to the level of “solicitation.” The former depends mainly on the terms of the confidentiality or employment agreement signed with the past employer. The later requires doing something overt intending to cause an ex-employer’s customers to leave their former employer for their new business. Ultimately, what qualifies as solicitation is a factual determination that varies by situation. If previous clients “go looking” for a competitor that is not “soliciting.” It is generally okay for ex-employees navigating confidentiality and solicitation rules to work with previous clients from their ex-employer, if those clients went looking for them because they knew that they were no longer working at the company.
Also, an employee can typically make a professional announcement that he or she is leaving to start a new job without such activities arising to “soliciting” customers for their new role. In some situations, such as for attorneys, however, the employees must coordinate departing announcements with employers to ensure an orderly transition of the client work due to fiduciary responsibilities to clients. Even when such coordination is not required, this type of announcement provides employees with an opportunity to give out personal contact information to previous clients while providing for a smooth transition to the company’s new representative.
Many of the cases where ex-employees have gone afoul of this type of situation are when the departing employee announces their new affiliation, does not seek to prepare a joint departure statement to ensure an orderly transition, includes solicitation type language in the departure email, and/or performs follow up calls and emails soliciting the customers to leave the prior employer for their new business. It usually takes a lot to rise to the level actionable misappropriation.
From every perspective in the cleantech and renewable energy industry, the proper attention to these rules enables a thriving, competitive industry within the parameters of the law.
We just added Confidentiality Agreements, Non-Compete Agreements and Cease & Desist Letters for Misappropriation of Trade Secrets to our arsenal of legal documents to help our customers navigate these important issues.
The solar industry is on edge as two hedge funds behind the foreign-owned, bankrupt companies, Suniva and SolarWorld, try to play the administration to recover their bad investments. In this article, we will provide a summary and history of this trade case, the arguments being used to fight it and a template for you to use to write your own op-eds for community and state newspapers and blogs. The first decision in this case is occurring on September 22, 2017 so timing is critical. We hope that you will not only read this whole article, but also follow through on personalizing and sending out the template, as appropriate.
Summary and History of the Suniva & SolarWorld Trade Case
On April 26, 2017, Suniva submitted a petition with the International Trade Commission (“ITC”) seeking import relief under Section 202 of the Trade Act of 1974 (the “Act”) based on allegations that crystalline silicon photovoltaic (“CSPV”) cells (whether or not partially or fully assembled into other products) were being imported to the U.S. in such increased quantities as to be a substantial cause of serious injury, or the threat thereof to the entire U.S. industry producing products like or directly competitive with such imported products. On May 17, 2017, the ITC determined Suniva’s 202 petition properly filed. Consequently, the ITC instituted an investigation pursuant to Section 202 of the Act to determine whether Suniva’s allegations are true. The ITC concluded that this investigation is “extraordinarily complicated” because of the complexity of the issues, including the existence of antidumping and/or countervailing duty orders on certain imports covered by this investigation and the global supply chains for the imported products under investigation.
The broad scope of products covered by the ITC’s investigation means that the outcome of this case could affect almost the whole solar industry. The ITC’s investigation covers CSPV cells, whether or not partially or fully assembled into other products, such as, modules, laminates, panels, and building-integrated materials. Included in the scope of the investigation are photovoltaic cells that contain crystalline silicon in addition to other photovoltaic materials.
The ITC scheduled separate hearings for the injury and remedy phases of its investigation. The injury hearing was held on August 15, 2017. The ITC will issue its decision on whether the domestic solar manufacturing industry has suffered serious injury and increased imports were a substantial cause of that injury on September 22, 2017. In the event that the ITC makes an affirmative injury determination or is equally divided on the question of injury in this investigation, a hearing on the question of remedy will be held on October 3, 2017.
Thereafter, the ITC will submit to the President the report required by November 13, 2017. The import relief requested by Suniva and SolarWorld may be imposed by the President on U.S. imports of CSPV cells (whether or not partially or fully assembled into other products) as a result of the investigation if the ITC makes an affirmative injury determination and recommends that the President impose relief. The President may impose relief in the form of increased duties and/or other restrictions on imports of CSPV cells (whether or not partially or fully assembled into other products) that are the subject of an affirmative injury determination.
If Suniva and SolarWorld are successful in this trade case, not only will it not bring back their companies, jobs, manufacturing capabilities or the domestic solar manufacturing industry, but also only the hedge funds behind the case will be compensated. Even the small shareholders at Suniva and SolarWorld will be unlikely to receive any benefit from a positive outcome. While this trade case creates no benefit to the industry or anyone but a few hedge funds and individual creditors, it also has the potential to cause unprecedented harm to the industry, resulting in the loss of thousands of U.S. solar jobs and companies.
Arguments Being Used To Fight The Trade Case
The legal arguments being used against Suniva’s and SolarWorld’s claims are sound and summarized, as follows:
1. Suniva’s and SolarWorld’s business problems were caused by bad business decisions, not by an increase in foreign imports of CSPV products.
- Both companies’ failed focus on technological innovation, on qualifying their products with major retail purchasers, such as Sunrun and Vivant, and a litany of complaints from dissatisfied customers over late shipments, damaged products, and general product unrealiability caused their failures, not increased imports.
- The rapid growth of technological innovation in solar is so well known that solar incentives are structured based on the assumption that few incentives will be required as the technologies improve. This downward pressure on CSPV prices ratcheted up the competition, not imports.
- The only CSPV product segment in which imports increased was the utility segment, and both companies were unable to manufacture and supply those types of products. The retail CSPV segment (residential and commercial markets) in which the companies operated was mostly serviced by the domestic industry, yet petitioners failed to capture sufficient market for their businesses to succeed.
- Corporate failures like the companies’ due to bad business decisions, failure to innovate and adeptly scale are common for a high-tech industry full of startups.
2. The CSPV product market under investigation cannot be considered without also considering all of the upstream and downstream jobs and companies and the type of economic competition in which it operates.
- A very small domestic industry produces products like or directly competitive with the imported products. Therefore, any injury determination would be unfairly limited if it fails to account for the significant upstream and downstream jobs in the US solar industry that depend on CSVP products. Solar jobs dependent on CSVP products are booming. For instance, the U.S. solar industry grew twenty-fold from 0.1 percent of the total US electricity generation in 2010 and it is projected to pass 3 percent in 2020 and 5 percent in 2022.
- If solar equipment is made substantially more expensive through import relief, thousands of jobs will be lost, thousands more will never be created and consumers will simply stop buying CSPV products.
- Solar is still a very small percent of the nation’s electric supply providing only approximately 1.4 percent today. CSVP product manufacturing jobs are 1 percent of the total US jobs in the solar industry.
- The domestic CSPV manufacturing industry in which the companies operate represents less than 1 percent of the 260,000 solar jobs in the U.S. and 35,000 of the total US solar manufacturing jobs are manufacturing jobs other than CSPV.
- CSPV products do not merely compete against foreign CSPV products, whether domestic or imported, CSPV products must be priced low enough to compete with other sources of electricity on the grid.
- The need for grid parity, competitiveness with alternative sources of energy on the grid, is a far more plausible explanation for the companies’ failed businesses than cheap imports are as an explanation of the cause.
3. Increased imports are not causing the domestic industry of products like or directly competitive with the Suniva’s and SolarWorld’s products to suffer injury.
- The solar industry was always dependent on imported CSVP products, and as the industry grows so do the number of products imported. The very market at issue was created by the existence of imported solar products.
- It is only in the utility sector, which neither Suniva nor Solar World served, that an increase in imported products as compared to domestic ones occurred. Thus, both companies failed to supply products in the most rapidly growing CSVP product segment.
Template for Writing Op-Eds and Blogs
Everyone who works in solar should get involved with this trade case. You can help with the fight against the Suniva and SolarWorld trade case by reaching out to lawmakers, journalists and others who are potentially influential to tell the true story about how hedge funds and bad business decisions by two foreign-owned, bankrupt companies unable to innovate and respond to the rapidly changing solar marketplace are the reason for Suniva’s and SolarWorld’s failing businesses.
Please modify the template below, as appropriate, for writing your own op-eds in community or city newspapers or in a blog:
Headline
By xxx xxx,
An obscure provision in federal law known as Section 202 of the International Trade Act (“Act”) may cost tens of thousands of local jobs, and decimate clean energy in this community.
Solar is a true American success story. Last year, solar was the number one source of new electric capacity for America creating 51,000 jobs and $23 billion in investment. Solar is powering homes and farms, churches and military facilities with a clean, abundant domestic power source. And, the industry employs over 260,000 Americans, which is more than Google, Facebook and Apple combined.
My company, xxx, is a part of this success story. We employ xxx people in this community.
Our success, and that of the solar industry, is being threatened. Two moribund solar cell and panel manufacturers are hanging their hopes on Section 202 of the Act, last used in 2002, to eliminate competition. Importantly, the two companies, Suniva, a bankrupt Chinese-controlled company, and SolarWorld, whose German parent company has declared insolvency, are failing for reasons that having nothing to do with imports.
And here is the worst part—if these two companies prevail, 88,000 well-paid Americans could be jobless next year, including potentially xxx jobs at my own company, with no guarantee of Suniva or SolarWorld adding any jobs. The harm will go beyond jobs. Bloomberg New Energy Finance says, if imposed as Suniva has asked, the tariffs would double the cost of solar panels. IHS Markit says the case could slash photovoltaic demand by 60 percent by 2021. GTM Research says it could lead to the abandonment of 47 Gigawatts of future solar projects, that’s more than the total amount of solar installed in the United States to date and the equivalent of enough electricity for 10 million homes.
This is particularly disconcerting to me because…..
My company is a [manufacturer] [installer], [x service company] [supplier] that employs xxx people doing everything from xxx electrical work, to manufacturing to sales or whatever
We’ve hired hard working Americans from all walks of life who are making a serious commitment to our community.
Right now, the Section 202 petition is in the hands of the U.S. International Trade Commission. Suniva and SolarWorld made bad business decisions, chose not to participate in the largest and most rapidly expanding sector of the solar market and faced numerous complaints from customers about the quality and timeliness of their products. They brought their failures on themselves. There is no solution involving global trade relief that would help these two companies survive without severely damaging the American solar industry. Furthermore, many of those damaged would be manufacturers. In fact, we support the growth of the nearly 38,000 solar manufacturing jobs in our country that are threatened by this case.
Solar is a high-tech product that, like other tech industries, making it part of the global economy. We need U.S. manufacturing, as it is a staple of American entrepreneurship, innovation and ingenuity, but we also need the business flexibility to utilize the global supply chain to meet a constantly growing domestic demand for solar. There is a right and wrong way to spur growth in U.S. solar manufacturing—sacrificing jobs in a burgeoning industry is the wrong way. I urge the ITC to decide against injury in the best interests of American businesses and the quarter-million solar workers and their families.
For my company and our workers, this is now a matter of economic survival, and the lost jobs will be felt throughout our community if this decision goes the wrong way.
SAN FRANCISCO - CleanTech Docs and Cleantech Law Partners (“CLP”) have partnered to team their strengths and transform the way cleantech companies satisfy their legal needs. CleanTech Docs is an online legal technology services company that helps cleantech and renewable energy companies create specialized legal documents. Cleantech Law Partners is a full-service law firm that serves the legal and policy needs of renewable energy and cleantech companies.
This new joint venture will provide the industry's first online legal platform for cleantech and renewable energy companies. Together, CleanTech Docs and CLP will provide online legal services to the cleantech and renewable energy industry, provide fixed-fee billing, standardized legal templates and customization services by leading industry attorneys. The partnership aims to improve the way legal services are provided to cleantech and renewable energy companies allowing startups and larger companies the ability to focus more on developing innovative green products and producing clean energy and to spend less time and money on legal services.
“We are excited to join forces with CleanTech Docs and support its mission of expanding the use of clean technologies and renewable energy throughout the world. We share that goal and look forward to working closely with them,” says Jack Jacobs, Managing Partner of Cleantech Law Partners. “Legal counsel and agreements are an essential component of any renewable energy project and cleantech company. I’m sure this alliance will help fill a huge void that many cleantech companies have felt when trying to negotiate legal documents and grow their company.”
“Cleantech Law Partners is the perfect law firm for us to partner with,” says Angela Lipanovich, founder and CEO of CleanTech Docs. “CLP is a leader when it comes to knowledge of the cleantech and renewable energy industry. With CLP’s expertise and world-wide presence, this partnership provides CleanTech Docs with the ability to assist customers wherever their companies and projects are located. We are delighted to have CLP on board as our partner to better serve the industry.”
This partnership is a collaboration that draws on the distinct strengths of each company: CleanTech Docs’ unique online legal technology platform and expertise in developing standardized legal templates, combined with Cleantech Law Partners’ decades of legal experience helping cleantech clients. Our collaboration will create an online legal technology platform that will allow companies to achieve new levels of reduced soft costs, effectiveness and client satisfaction. CleanTech Docs’ and Cleantech Law Partners’ shared vision for this partnership is to put the unique capabilities of an online legal platform in combination with legal experts’ knowledge, services and skills into the hands of business professionals everywhere.
Come visit CleanTech Docs and Cleantech Law Partners at the Solar Power International trade show at Booth 734 in the Mandalay Bay Convention Center, Las Vegas, NV, from September 11-13, 2017.
About CleanTech Docs, Inc.
Founded in 2016, CleanTech Docs provides online legal technology services to solar, wind, and other cleantech and renewable energy companies with operations located throughout the Nation. For more information about CleanTech Docs, visit: www.cleantechdocs.com; or contact us via email: info@cleantechdocs.com.
About Cleantech Law Partners
Cleantech Law Partners is a full-service law firm dedicated exclusively to the cleantech and renewable energy industry. Clients include renewable energy project developers, cleantech companies, financiers, manufacturers, and entrepreneurs. CLP’s legal team has extensive knowledge of the clean technology sector and experience working with renewable energy companies across the United States and around the world. Cleantech Law Partners advises clients on a variety of legal matters involving clean technologies and developing alternative energy projects, including: siting, permitting, project finance, structuring, drafting and negotiating interconnection and PPAs, regulatory matters, solar leases, intellectual property, renewable energy incentive programs, and serving as outside in-house corporate counsel. For more information about Cleantech Law Partners, please visit: www.cleantechlaw.com; or contact Rivka Yakovson at +1(866) 233-8064, ext. 105, or via email: ryakovson@cleantechlaw.com.
This guest blog by Angela Lipanovich, President of Estriatus Law, PC, is also posted on Estriatus Law’s Legal Review (August 08, 2017).
As the majority of the country prepares to experience darkness mid-day for the first time in nearly a century, the approaching total solar eclipse offers an opportunity for reflection, lessons and unification. On August 21, 2017, when the total solar eclipse occurs, our cleantech and renewable energy industry can pause to realize just how far we have come in transforming our nation’s electric supply and technological innovations. In the months leading up to this event, grid operators have prepared to navigate the rapid loss of large amounts of solar energy and the whiplash of solar energy coming back as the sun appears again higher in the sky than when it disappeared. As viewers travel in mass to watch from coast to coast, our relative size to the universe will be underscored.
The path of totality of the eclipse will start in Oregon and move eastward to South Carolina over the course of approximately 90 minutes. Since the last total solar eclipse, our country’s electric grid has undergone drastic changes that will be affected. In March and April of this year, U.S. monthly electricity generation from utility-scale renewable sources, including solar and wind, exceeded nuclear generation for the first time since hydro and nuclear were at the same level in July of 1984. Total PV power installed across the U.S. is estimated to be over 44 GW today with most large scale solar plants built within the past five years. More than 60% of all utility-scale electricity generating capacity that came online in 2016 was from wind and solar technologies.
The path of totality where the sun is completely blocked during the eclipse will affect 17 utility-scale solar systems, and hundreds of plants, mostly in North Carolina and Georgia, will be at least 90% obscured. More than 6 GW of capacity will be affected in areas that are at least 70% obscured. Northern California is expected to be 76% obscured and Southern California 62% obscured. The rolling effects of the eclipse are expected to have the biggest impact at approximately 10:30 a.m., when PV output is projected to drop 5 GW below typical generation levels. This represents the amount of energy needed to power approximately 1 million homes.
Despite the moon obscuring the sun during a peak time for solar-power production, no reliability issues are expected in the U.S.. Grid operators are lining up extra capacity primarily from natural gas powered turbines. In California, home to 40% of the country’s total PV capacity, the California Independent System Operator plans to replace solar generation from natural gas and hydropower.
To help offset solar-power loss during the eclipse, CleanTech Docs became a Do Your Thing for the Sun Partner with the California Public Utilities Commission. We have pledged to implement an energy-savings plan that will be deployed during the eclipse, and we are encouraging our customers to join us by taking specific actions to conserve energy during the eclipse. A few reminders about ways to reduce energy use during the eclipse, and thus, reduce greenhouse gas emissions are below:
- Visit CalEclipse.org or your local/state organization and take an eclipse energy saver pledge.
- Replace light bulbs with LEDs.
- Turn off lights in areas that are not being used.
- Don't charge electronics during the eclipse (9 a.m. to noon).
- Unplug all appliances not in use.
- For labs with fume hoods, shut the sash.
- Turn up the thermostat by 2-5 degrees.
- Take lunch an hour earlier and turn off lighting and equipment in your office while you’re out.
- If you regularly do laundry or run the dishwasher during the eclipse period, do so another time of day.
- Turn off computer monitors if out of the office.
- Avoid using microwaves during the event.
- Power down – shut off your computer. Powering down your computer completely uses 50% less energy than sleep mode.
- Power to the strip – use an electronic power strip. This will help reduce phantom loads. Turn the strip off when not using it.
- Retrofit old equipment with Energy Star products
We can all do better to reduce our carbon footprint, even those who work at companies or organizations dedicated to growing the cleantech and renewable energy industries. The eclipse is a chance to be reminded not only that we exist in a vast universe, but also that our life is supported by natural systems dependent on the sun. Our success is dependent on working together to solve climate change, one of the greatest threats facing humanity in the 21st century.
The California Independent System Operator has a webpage dedicated to the eclipse and its grid where viewers will be able to track solar production, current and net energy demand in real time.
This guest blog by Angela Lipanovich, President of Estriatus Law, PC, is also posted on Estriatus Law’s Legal Review (June 20, 2017).
Access to sunlight is often called the most difficult legal issue connected with solar energy use. The ancient precedent of “ancient lights” holding that a person has a natural right to receive the light that passes through their window has be unanimously repudiated in the U.S. No common law legal right to unobstructed light from adjoining land exists.1 Thus, solar system owners must rely on i) a limited availability, if any, of general zoning rules and solar access permits; iii) the design and location of their solar systems to account for potential shading from adjacent properties, iv) limited governmental statutory protections to solar access for their systems, and v) in the absence of any of the former, private agreements with neighbors to secure the availability of sunlight to reach their solar energy systems.
General zoning rules and solar access permits are policy tools a limited number of states and local governments across the country have developed to limit shading from neighboring properties. In some cities, such as Boulder, Colorado, zoning districts are grouped into different solar access areas that provide a limited amount of solar access protection through the concept of a “solar fence” on the property line,2 and in other cities, such as Santa Cruz, California, the general zoning requires that buildings must be oriented and located to “preserve solar access of adjacent properties.”3 Other policies grant specific solar access protections through providing solar access permits to use the airspace over their neighbor’s property. Although policy tools of these types succeed in providing some protection for solar access, such tools are only of limited help given the highly variable and limited amount of protection they provide which can also be difficult and expensive to enforce.
In many cases, solar easements are the most practical solution to the problem of the right to solar access when no governmental protections suffice. For instance, California has limited statutory protections that provide solar system owners some guarantees to access to sunlight. In California Gov. Code § 65850.5, local governments are provided with the authority to require certain subdivisions, by ordinance, to create solar easements but only to subdivisions for which a tentative map is necessary and subject to other restrictions. The California Solar Shade Control Act (“Act”) provides that a tree or shrub cannot cast a shadow which covers more than 10 percent of a solar system’s absorption area at any one time between the hours of 10 a.m. and 2 p.m. if the tree or shrub is planted after the installation of the solar collector. The Act also exempts trees and shrubs subject to a local ordinance and the replacement of trees and shrubs that had been growing prior to the installation. Under the Act, if a neighbor does not remove or alter an offending tree or shrub after reasonable notice, then a penalty of $1,000 per day is imposed until the violation is removed. Since the Act excludes existing vegetation solar owners must account for expected growth of vegetation that might shade their system. Also, no law prevents shading of solar energy systems from new or modified structures on adjacent property. Thus, in California, aside from these two statutory protections, solar system owners must rely on well thought out system designs and locations or obtain a solar easement from one or more neighbors to guarantee solar access for their systems.
Over thirty states have enacted solar easement statutes. In 1978, California was one of the first states to enact legislation to guide the establishment of solar easements. California’s solar easement statute is found in Cal. Civ. Code §§ 801 and 801.5. This statute allows neighboring property owners to sign solar easements that prevent a property owner from using their property in a manner that would prevent sunlight from reaching a solar energy system located on an adjacent property. Pursuant to the statute, a solar easement can only be used for accessing sunlight to create thermal or electric energy using a solar energy system.
Under California law, all solar easements must be in writing and include, at a minimum, all of the following:
- A description of the dimensions of the easement expressed in measurable terms, such as vertical or horizontal angles measured in degrees, or the hours of the day on specified dates during which direct sunlight to a specified surface of a solar collector, device, or structural design feature may not be obstructed, or a combination of these descriptions.
- The restrictions placed upon vegetation, structures, and other objects that would impair or obstruct the passage of sunlight through the easement.
- The terms or conditions, if any, under which the easement may be revised or terminated.
See Cal. Civ. Code § 801.5. Solar easements should also be recorded in the office of the recorder where the easement is granted or serious problems could result at a later date when new owners make any structural or landscape changes that prevent sunlight from reaching their neighbors property.
As solar energy becomes more ubiquitous, the problem of shading from structures on adjacent properties is sure to become more prevalent. The reputations of solar in general and the companies that sell solar in particular could be impaired if consumers do not receive the financial and environmental benefits they expected or were promised due to shading from structures on adjacent properties not being considered at the outset of the proposal process. Solar easements are an effective tool when considering the overall solar energy development strategy.
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Fountainbleau Hotel Corp. v. Forty-Five Twenty-Five, Inc., 114 So. 2d 357, 359 (Fla. Dist. Ct. App. 1959)
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Boulder Revised Code: Title 9, Land Use Regulation; Chapter 9, Development Standards; Section 17, Solar Access. https://bouldercolorado.gov/plan-develop/solar-access-guide
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Santa Cruz 24.08: Land Use Permits and Findings; Section 43 (5). http://www.codepublishing.com/CA/SantaCruz/html/SantaCruz24/SantaCruz2408.html
As some of the people who have fought for solar for the past decade or more, we know the answer to this question. First, even within the industry's national solar trade organizations there is fighting between the commercial, utility and residential segments of the solar industry. Then, there is the fact that most residential solar companies are small in size without large budgets or the experience needed to successfully lobby at the federal level. And, finally, when pro-solar line items do make it into bills, they often somehow disappear right before the finish line even under the pens of DC politicians with a lot of solar in their states. As those who have worked in DC for a while will tell you: “everyones' pockets here are lined with fossil fuel money.”
With the residential solar industry once again moving to a more localized industry that must focus on surviving through referrals and staying small, the largely absent voice of any residential installation companies at the federal level, even within the industry’s main federal lobbying organizations like SEIA, cannot be ignored. The companies rated as the top U.S. “residential solar companies” by megawatts installed cannot be trusted to fight for the small, localized residential solar installation companies. First, some of them, like Sungevity and SolarCity, aren’t around anymore, at least not in their original form and their new forms are still uncertain and untested. Second, most of those companies, such as companies like SunRun and Vivant Solar, make money on their internal financing business models, which provide that they own the solar systems through providing solar power purchase agreements and leases to customers. Such business models, not always, but often, do better under commercial policy tools such as the commercial Investment Tax Credit (ITC). Truly pro-residential policies such as the residential ITC were hard fought wins by a very few, but vocal, members of the residential solar industry, like Akeena Solar, which also are no longer around.
What is the solution? At the same time that small residential solar installation companies (companies size 1 to 80 employees) is the current direction of the industry, in order for these companies to get what they need, they need to get educated on how to lobby, quickly. Although money is a strong motivator for politicians, so are votes and jobs. Companies should always mention how many jobs they create in their politician's district when asking for a policy item. And, in person meetings are more persuasive than letters and emails. Finally, companies should get active with their local solar trade association or work on creating a solar community in their area to band together and network. The residential solar industry, the true “residential solar” industry that isn’t in the finance business, needs good partners and lots and lots of community. Without paying a lobbyist a million-dollar salary to run around DC or even being able to participate on the Board of SEIA, residential solar companies need to band together and learn how to work together to get the policies that will truly benefit their businesses. Lastly, there are very specific techniques that work and others that don't work when lobbying. The more educated companies become on these techniques, the more effective they can be when advocating for pro-solar incentives and laws. Residential solar companies are small companies. At the same time, this should not stop them from effectively lobbying.
Being prepared for a wage and hour lawsuit against your company is the best example of the adage "an ounce of prevention is worth a pound of cure." All companies should perform routine wage and hour audits to determined if their internal controls and procedures are adequate and properly administered. The focus of these audits should be on the most common areas in which employers face liability. The most common types of wage and hour violations/lawsuits are listed in the following descending order of frequency:
- Not properly classifying/paying employees as exempt or non-exempt
- Not providing required meal and rest periods
- Not properly recording/paying all compensable time
- Not paying employees timely at separation
- Making unlawful deductions from an employee’s wages
- Failing to properly reimburse employees
In conjunction with these audits, a written policy should be created to address and guide contractor’s management in each of the main areas of potential liability, as well as to provide documentation that the contractor’s practices conform to the law. Other than ensuring that each employee charged with a role in carrying out the functions related to the policy is properly performing his/her duties, the following actions listed under each issue should be taken to prevent liability for wage and hour violation lawsuits:
1. Issue: Properly recording and paying all “hours worked”
- Adopt a written policy – approval, disbursement, etc.
- Have time cards include with the following language:
“Record the actual start and finish times of meal periods not standardized times. For example, enter 12:45 pm to 1:45 pm if meal taken during that time.
By signing this time sheet, you are confirming the following:
i. you have taken one full 30-minute meal period for a workday of 10 or less hours, or you have taken two full 30-minute meal periods for a workday of more than 10 hours;
ii. you have taken all the required rest periods described in the employee handbook;
iii. this time record accurately reflects all of the hours you worked during this pay cycle.”
- Have paychecks include the following language:
“You must review your paycheck and immediately contact Human Resources in the event the check does not list all of the hours worked.”
- Institute disciplinary action for employees that fail or refuse to comply with contractor’s wage and hour policies.
2. Issue: Provide all required meal periods and authorize all required rest periods
- Adopt a written policy – approval, disbursement, etc.
- Have time cards include the language stated above c. Have paychecks include the language stated above
3. Issue: Paying employees timely at separation
- Adopt a written policy – approval, disbursement, etc.
- Ensure that handwritten checks are issued for any employee that is terminated and was paid by direct deposit
4. Issue: Properly classify employees as exempt or non-exempt
- Adopt a written policy – approval, disbursement, etc.
- Fill out a self-audit form for each exempt position to document that the job category complies with exemption requirements (generic to place in HR files)
- Have each person’s job category/exemption status in contractor’s accounting system (employee specific)
- Draft job descriptions that include exempt or non-exempt language
5. Issue: Discrimination and Harassment
- Adopt a written policy – approval, disbursement, etc.
- Perform training as required by law
6. Issue: New Hire Orientation
- Adopt a written policy – approval, disbursement, etc.
- Follow up with supervisors to ensure orientation is occurring
7. Issue: Workplace Safety Requirements
- Adopt a written Illness and Injury Prevention Program (IIPP)
- Provide IIPP training for all employees
- Draft and adopt an emergency action plan for each of contractor’s offices
8. Issue: Arbitration Policy
- Adopt a written policy
- Include in employee handbooks and distribute
9. Issue: Overtime Compensation
- Adopt a written policy – approval, disbursement, etc.
- Implement routine self-audits by payroll and accounting
Trump has put together the most anti-enviromental administration in history. He just picked Daniel Simmons, a renewables critic, to head the U.S. Department of Energy’s (DOE) Office of Energy Efficiency and Renewable Energy (EERE). Now with Scott Pruit, a climate science denier and fossil fuel ally, in charge of the U.S. Environmental Protection Agency and Rick Perry in charge of the Department of Energy, which he once vowed to abolish, the cast of characters is complete.
As we've known, and written about previously, across the nation, commentators, attorneys and anti-solar groups have been gathering to provide stories and accusations to paint the solar industry as a predatory group of companies victimizing homeowners and other solar customers with false claims of energy and cost savings, poor products and tactics of invading personal privacy. Things like the recent United States Securities and Exchange Commission probe into SunRun and SolarCity over customer contract cancellations is just one very public example of the impacts of these efforts.
The solar industry has ridden out storms before, but we predict it has never seen a storm like the one that is approaching now. While solar might now be a $33 billion dollar industry, it is dwarfed by the $33 trillion dollars in lost revenue expected over the next 25 years for the fossil fuel industry due to climate change induced government regulations and other efforts to cut carbon emissions. Now is the time to turn to the advice of sailors on how ships survive a hurricane at sea.
Although no crew wants to be found in the midst of a hurricane, when one is unavoidable the ship can survive by focusing on four things: 1) get the weather report, 2) ensure you have the weight of cargo to stabilize the ship, 3) know if any good ports are available, and 4) if all else fails, steer towards the area with the shallowest waves and lowest winds.
Solar can learn a lot from this advice. Companies must stay informed, predict what is coming and know the weather forecast of their industry. A warehouse of inventory and dependable supplies can keep a company from a very wicked roll. The repeated impact of not having enough of the right supplies at the right price point can break a company apart. Just as not all ports offer the same kind of shelter, being caught in the wrong office lease can be dangerous. In such case, it might be better to go out to sea. And, companies will survive at sea if they keep a good distance from anything they might crash into and keep moving forward with enough power to steer.
Winning a fight at sea is very similar to winning a fight in cleantech. It depends on having a well-maintained company, a trained and experience group of employees, and a bit of good luck.
Solar operations and maintenance (O&M) provides the preventative and correctional technical activities that allow solar systems to perform at their best. As a result of the solar industry’s strong growth curve, O&M is a rapidly growing business opportunity for solar contractors.
The major goals of solar O&M are, as follows:
- Optimization of solar system production for increased asset revenue
- Source of revenue for O&M providers/solar contractors
- Reduction of risks for solar system owners and investors
- Protection of solar system value, revenue stream and longevity
- Compliance with applicable agreements and regulations
- Transparency on solar system production, performance, issues, risks and O&M activities
Some of the common types of solar O&M issues that occur with respect to solar projects include: damage to perimeter fences, ground erosion, transformer leakage, various inverter damage, broken conduit, combiner box damage, vegetation overgrowth, cell browning/discoloring, panel shading, shorted cell, natural damage, vandalism damage, racking erosion, unclean panels and animal nuisance.
Since O&M business relationships are long-term – from 6 years to 30 years – and involve multiple parties, they are also complex. Any failure of the O&M services subjects every party in the O&M chain to liability. A solid O&M Agreement is key to protecting your solar business and asset. We provide a standardized O&M Agreements for these types of relationships.
If you want to customize our O&M Agreement or to create one from scratch, you might want to use the helpful checklist below created by one of the attorneys in our network. It contains some of the key legal considerations to take into account when developing these agreements and relationships.
O&M Agreement Checklist
1. Check Sections of Agreement That Need Technical Review
- Scope of O&M services – how are “services” defined, exclusions, maintenance schedule, will certain assets be replaced as part of maintenance and included in cost
- Scope of service provider’s authority
- Performance standards to be achieved – how defined, who bears risk of exceptional circumstances such as force majeure, prescribed remedies for non-performance, such as liquidated damages
- Limits of liabilities
- Level of any liquidated damages
- Incentive mechanisms
2. Prepare For A Long-Term Business Relationship
- Provide a review process during the term of the agreement to review performance, investments, etc.
- If there is any third-party financing, ensure term of agreement at least as long as term of funding, PPA, or other third-party contractual agreements, as applicable
- Do termination provisions provide for termination for convenience? Is that okay with all parties?
- Provide mechanism allowing for additional services to be included within scope of service provider’s responsibilities (variations) and a procedure for resolving any disputes as to the costing of those additional services
- Is service provider to interface with customer?
- Is the service provider to be paid a fixed fee, reimbursable basis or combo of both? And are such fees subject to escalation over time?
- Reporting and monitoring of performance – what reports need to be prepared on a regular basis, who has the right to inspect and audit facility and reports, independent expert to monitor provider’s performance, what is the method for monitoring
3. Incentivize For A Successful Business Relationship
- Control the reimbursable fee elements of a service providers fee – agree on a budget including how to resolve disputes and exclusions; set procedure to control the budget such as regular budget reviews, expenditure type or level approvals, and exceptions to the obligation to keep a budget such as to avoid emergency, prior approvals, and things outside service providers control; & the consequences of failure to stick to the budget such as potential material default with right to terminate, revision of financial limits above which approval is required, reimbursement obligations for any additional costs
- Provide an incentive in the fee for the service provider to perform – if the contractor performs well paid more, if performs badly paid less; for e.g., proportion of amount by which actual operating revenues exceed anticipated operating revenues or set up bonus based on lack of downtime or adjust fee by reference to anticipated/ actual performance standards
- Entitle owner to exercise rights of set off – for e.g., in case of defective services
- Interest/penalties if delay in payment to service provider
4. Plan Ahead In Case The Business Relationship Ends Badly
- Termination rights – material default, insolvency, revenue and/or performance failing below certain level for period of time, prolonged force majeure, change of control, loss of licensing rights, budget exceeded, convenience
- Upon termination – when is a party entitled to loss of profits, limits on lost profits, right to take over subcontractors, cooperation obligations, spare parts, royalty free license to use documents or technology to maintain perform O&M services, assignment of vendor service agreements
- Liability and liquidated damages – cure periods, reperformance of defective services or repay/replace defective parts, liquidated damage to be imposed, limits on liability, exclusions of consequential damages, liabilities to third parties and breach of laws, authority to employ substitute services at cost of provider.
We hope this blog post helps you get on your way to start doing O&M work or hiring someone who does.
CleanTech Docs becomes newest CALSEIA member.
SACRAMENTO - CleanTech Docs has become the newest member of the nation’s largest state solar power trade association, the California Solar Energy Industries Association (CALSEIA).
“We are proud to have CleanTech Docs join CALSEIA to support its mission of expanding the use of clean, solar technologies throughout the state. CALSEIA members are recognized as being true leaders in the California market as they promote high standards within the industry and advocate fair policies for solar consumers. We look forward to working closely with CleanTech Docs in continuing this work,” says Bernadette Del Chiaro, Executive Director of CALSEIA.
We founded CleanTech Docs to provide a solution for solar and other cleantech companies looking to reduce their legal fees without sacrificing quality. CleanTech Docs provides highly specialized solar, wind and other cleantech legal forms. The CleanTech Docs' site is an online collection of the highest quality, cleantech specific legal documents available on the internet. In the event our customers want assistance selecting and/or modifying their documents, we connect them to our independent, cleantech attorneys.
CleanTech Docs joins CALSEIA after being carefully vetted and approved through the association’s application process, which ensures member companies adhere to industry best practices.
Founded in 1977, CALSEIA, the California Solar Energy Industries Association, represents manufacturers, installers, financers, and distributors of solar panels and related components and technologies throughout the state.
Founded in 2016, CleanTech Docs, Inc., provides online legal technology services to solar, wind, and other cleantech companies with operations located throughout the Nation.
