BySenate Labor & Commerce (originally sponsored by Senators Stanford, Conway, Hasegawa, Kuderer, Nobles, Saldaña, and Valdez; by request of Department of Commerce)

NEW SECTION. Sec. 1. The legislature finds that many Washingtonians are solicited by solar energy salespersons and solar energy contractors to purchase or lease a solar energy system. Salespeople and contractors are responsible for accurately representing the financing terms, total cost, and performance of the solar energy equipment to support the customer in making an informed decision about whether the installation is economically viable. If these terms are not communicated correctly, customers face financial hardship. The legislature declares that this is a matter of public interest. It is the intent of the legislature to establish rules of business practice for solar energy contractors and solar energy salespersons to promote honesty and fair dealing with homeowners, other property owners, and leaseholders.

(1) "Customer" means a residential or commercial property owner or leaseholder who is solicited by or signs a contract with a solar energy salesperson or a solar energy contractor for a residential or commercial solar energy system.

(2) "Dealer fee" means an amount paid by a solar energy contractor or solar energy salesperson to a lender in order to offer a customer credit to finance the purchase and installation of a solar energy system.

(4) "Major system components" means any inverters, module-level power electronics, solar panels, racking systems, or battery energy storage equipment included in the solar energy installation.

(5) "Net metering" means measuring the difference between the electricity supplied by an electric utility and the excess electricity generated by a customer-generator's net metering system over the applicable billing period.

(7) "Solar array" means a mechanically and electrically integrated grouping of modules with support structure, including any attached system components such as inverters or dc-to-dc converters and attached associated wiring.

(8) "Solar energy contractor" means a person, partnership, corporation, or other entity that designs, installs, repairs, replaces, or maintains solar energy systems.

(9) "Solar energy installation contract" means an agreement between a solar energy contractor or solar energy salesperson and a customer that includes, in part, an agreement to install a residential or commercial solar energy system for a total cost including labor and materials in excess of $1,000.

(10) "Solar energy salesperson" means a person who solicits, negotiates, or otherwise endeavors to procure a solar energy installation contract with a customer to install, repair, or replace residential or commercial solar energy systems on behalf of a solar energy contractor.

(11) "Solar energy system" is the total components, circuits, solar energy equipment, and other equipment that in combination convert solar energy into electrical energy.

(12) "Solicit" means to make contact with the customer for the purpose of selling or installing residential or commercial solar energy systems including, but not limited to, contact through any of the following methods:

NEW SECTION. Sec. 3. (1) Any person, firm, partnership, corporation, or other entity advertising, offering to do work, submitting a bid, engaging in, conducting, or carrying on the business of installing, repairing, replacing, or maintaining residential or commercial solar energy systems for a total cost including labor and materials in excess of $1,000 must be licensed as provided in RCW 19.28.041.

(2) Any person, firm, partnership, corporation, or other entity designing residential or commercial solar energy systems for a total cost including labor and materials in excess of $1,000 must be licensed as provided under RCW 19.28.041, or be a licensed design professional under chapter 18.08 or 18.43 RCW and practicing in their field of specific training and qualifications.

(3) All solar energy installation contracts must be consistent with this section. This section does not apply to any person installing residential or commercial solar energy systems on the person's own property who is properly exempted under RCW 19.28.261.

(4) A solar energy installation contract must be in writing, must be written in the same language and contain terms as were principally used in the sales presentation made to the customer, including any material contract terms from print or digital marketing material given to the customer. A copy of the contract must be given to the customer at the time the customer signs the contract. The contract must be typed or printed legibly and contain the following provisions:

(a) An itemized list of work to be performed including any known or anticipated electrical system upgrades or utility equipment upgrades that are necessary for installation;

(b) Any financing that is incorporated directly into the contract, which must be identified as a separate line item and conform to all state and federal consumer loan regulations and disclosure requirements, including terms, conditions, interest rates, annual percentage rate, the amortization schedule, and information on how the loan is secured;

(c) Disclosure of the exact amount paid, if any, by a solar energy contractor or solar energy salesperson to any lender or third-party financing company in the form of a dealer fee, or other similar inducement to obtain financing, irrespective of whether financing is incorporated within the contract or in conjunction with a third-party lender;

(e) The cost per watt calculated as the total contract amount, including labor and materials, for installing the solar energy system divided by the total direct current nameplate rating of the solar energy system;

(f) A detailed payment schedule based on project completion milestones that explains when payments are due, explains the customer's right to cancel the contract, and identifies the cancellation fees due at each milestone in the payment schedule;

(g) The model and brand name of major system components to be installed. If any major system components change throughout the duration of the contract, those changes must be documented, the efficiency and warranty period of the new major system components must be provided, and the changes must be agreed upon in writing by the customer;

(j) A list of anticipated maintenance activities that the customer will need to perform in order to maintain the warranty and performance of the solar energy equipment including, but not limited to, inverter replacement;

(k) The solar energy system's first-year annual production projections in kilowatt-hours. The methodology and the nationally recognized, industry-standard tool used to develop the projections must be provided with the annual production projection data. Projections must be based on site-specific considerations of each solar array, including location of the installation, orientation and angle of the panels, and on-site shading factors and must at a minimum account for the difference in production over the month of December versus the month of June. Projections must not exceed the optimal inverter performance identified by the manufacturer of the inverter equipment identified in the contract;

(m) The solar energy contractor's good faith estimate of projected electric bill savings from the solar energy system that the customer is expected to achieve over the first 12 months after interconnection. The customer's current electric rate must be used in this calculation unless a rate change for the customer's applicable rate class has been approved and finalized for the applicable period. If the customer agrees, the relevant electric utility shall provide detailed electric use history to the solar energy contractor and may support calculation of the annual bill savings estimate;

(o) The name, business address, email address, contractor's license number of the solar energy contractor, and link to the Washington state department of labor and industries contractor verification tool;

(p) A statement as to whether all or part of the work is intended to be subcontracted to or performed by another person or entity other than the solar energy contractor's own workforce;

(q) The following recommendation in capital letters, which must be initialed by the customer acknowledging they have read and understand the recommendation provision:

"IF YOU INTEND TO OBTAIN A LOAN TO PAY FOR ALL OR PART OF THE CONTRACT, IT IS RECOMMENDED THAT YOU WAIT UNTIL RECEIVING FINANCIAL APPROVAL BEFORE SIGNING THIS SOLAR ENERGY INSTALLATION CONTRACT. IN ADDITION, IF YOU INTEND TO OBTAIN A LOAN TO PAY FOR ALL OR PART OF THE CONTRACT, IT IS RECOMMENDED THAT YOU VERIFY WHETHER LOAN PAYMENTS ARE DUE BEFORE THE SYSTEM IS OPERATIONAL. NOTHING IN THIS CONTRACT ALTERS YOUR RESPONSIBILITY TO PAY YOUR ELECTRIC UTILITY COMPANY FOR AMOUNTS DUE ON YOUR ELECTRIC BILL.";

(r) The following rescission rights notice in capital letters, which must be initialed by the customer acknowledging they have read and understand the notice provision:

"CUSTOMER'S RIGHT TO CANCEL: YOU HAVE THE RIGHT TO CANCEL YOUR SOLAR ENERGY INSTALLATION CONTRACT WITHIN THREE BUSINESS DAYS OF CONTRACT SIGNING. YOUR NOTICE OF CANCELLATION MUST BE MADE IN WRITING AND EMAILED OR MAILED VIA CERTIFIED LETTER TO THE CONTACTS LISTED IN THIS CONTRACT.";

(s) A statement clearly explaining whether the solar energy installation contract includes the cost of uninstalling and reinstalling the solar energy system if it is installed on the customer's roof and the roof must be replaced or repaired at a future date. If the contract does not include the future cost of uninstalling and reinstalling the solar energy system to be installed on the customer's roof, the contract must include the following notice which must be initialed by the customer acknowledging they have read and understand the notice provision:

"Before you need to repair or replace your roof, review the warranties included in your solar energy installation contract to ensure you comply with them. You will be responsible for all costs and work needed to uninstall and reinstall the solar energy system and interconnect it with your utility company.";

"If you are a residential customer, you must have sufficient tax liability to utilize the residential clean energy credit. You will not receive these funds directly; you can only offset the taxes that you owe to the federal government. IF YOU ARE PARTICIPATING IN GOVERNMENT ASSISTANCE PROGRAMS OR ARE ON A FIXED INCOME, YOU MAY NOT BE ELIGIBLE FOR THIS TAX CREDIT. The cost of roof repairs should not be included in calculating the tax credit. It is recommended that you consult a tax attorney if you are relying on the tax credit to afford the cost of the solar energy installation.";

(u) A copy of the internal revenue service's current revision of form 5695 instructions for residential clean energy credit (part I) qualified solar electric property costs;

(v) A statement that it is the solar energy contractor's responsibility to install the system per manufacturer instructions, in compliance with the national electric code as enforced by the local jurisdiction, in compliance with local building codes, and in compliance with the applicable utility's interconnection standards;

(y) A statement that the addition of a solar energy system may affect the value of the structure as determined by the county assessor and any change in value may be reflected in annual property taxes; and

(z) The following statement which may be omitted if the solar energy system includes energy storage equipment and/or power conversion and control technologies designed and installed to provide backup power during a grid outage:

"A solar energy system will automatically disconnect the solar energy system from the utility grid in the event of a power outage to protect utility repair personnel from a risk of electric shock from the electricity that could otherwise flow into the utility distribution system from the solar energy system and that if this occurs, THE SOLAR ENERGY SYSTEM WILL NOT PROVIDE ANY ELECTRICITY TO THE CUSTOMER DURING THE POWER OUTAGE."

(5) If a customer exercises the rescission rights described in subsection (4)(r) of this section, the solar energy contractor may not enforce the terms of the contract against the customer, including claims for labor or materials, and must terminate any security interest or release any statutory lien created under the transaction within 20 days of receiving written rescission of the contract from the customer. If a customer exercises the rescission rights via email or a certified letter postmarked within the three-day window to the contacts listed in the solar energy installation contract, even if the solar energy contractor or solar energy salesperson has not responded, the solar energy contractor is prohibited from enforcing the terms of the contract and must not charge any cancellation fees.

(6) No payments of any type may be charged by a solar energy salesperson or a solar energy contractor before a customer's rescission rights have expired. Nothing in this section requires a solar energy contractor to commence performance or order equipment or materials until the close of the three-day rescission window.

(7) The interconnection application for the solar energy system must be approved by the applicable electric utility before the solar energy contractor or the subcontractor begins installing the system. Any solar energy system that is not approved by the applicable electric utility must be modified to meet the utility's requirements before the installation can proceed. The applicable electric utility may waive this requirement for solar energy contractors that are certified by the electric utility.

(8) It is the solar energy contractor's responsibility to notify the applicable electric utility of any equipment or design changes that occur during the performance of the solar energy installation contract.

(9) If the scope of work in the solar energy installation contract includes any type of roofing work, the solar energy contractor shall provide the customer separate invoices for the roofing work, and the solar energy installation contract must separately itemize and identify the cost of roofing tear-off and replacement.

(10) A person, firm, partnership, corporation, or other entity which purchases or is otherwise assigned a solar energy installation contract is subject to all claims and defenses with respect to the contract that the customer could assert against the solar energy contractor. A person, firm, partnership, corporation, or other entity which sells or otherwise assigns a solar energy installation contract must include a prominent notice of the potential liability under this section.

(11) A solar energy contractor or solar energy salesperson who fails to substantially comply with the requirements of this chapter is liable to the customer for any actual damages sustained by the customer as a result of the failure. Nothing in this section limits any cause of action or remedy available under chapter 19.86 RCW.

NEW SECTION. Sec. 4. No person may solicit using any statement or representation with regard to the costs, financing, terms, or conditions of purchase or installation of residential or commercial solar energy systems that is deceptive.

NEW SECTION. Sec. 5. The legislature finds that the practices covered by this chapter are matters vitally affecting the public interest for the purpose of applying the consumer protection act, chapter 19.86 RCW. A violation of this chapter is not reasonable in relation to the development and preservation of business and is an unfair or deceptive act in trade or commerce and an unfair method of competition for purposes of applying the consumer protection act as set forth under chapter 19.86 RCW.