Solar Smart

• How Long Do You Plan to Stay in Your Current Home?

  It will probably take a number of years to recoup in energy savings the money you’ll pay for your solar system. As a result, if you’re thinking about moving within the next five years, you should carefully evaluate whether installing a solar energy system is a good idea right now.

• Determine Your Current Use and How Much Your Electricity Costs

  Determine how much electricity you use each year, and how much you pay for each kilowatt-hour (kWh) from your current electricity provider. Also determine the breakeven point, when the money you save every month will equal the cost of the system.

• Which Way Does Your Roof Point?

  Make sure your roof is oriented toward the southern (including southwestern and southeastern) sky, and isn’t shaded by trees or other obstructions that could limit the amount of energy your system can generate.

The three most popular financing options are:

• Buying

  You purchase your solar system with cash or a loan. Financing can be traditional home improvement loans, as well as other programs where payments can be added to either your property tax or utility bill. Common names for these type of financing programs are PACE, HERO, CHEEF, or REEL.

  Pros

  • The system may increase the value of your home.
  • You receive all tax credits and other available deductions and incentives.
  • You get all the electricity produced by the system at no additional cost, except for costs associated with maintaining and repairing the system.

  Cons

  • You’re responsible for the system maintenance and all repairs.
  • If you use one of the alternative financing options, your annual property tax or utility bill will increase, sometimes substantially, since the cost of financing the system is paid through additional taxes or fees on your property.
  • You’re out of luck if the system can’t produce enough electricity to pay for itself.
  • Some financing programs may charge above-market interest rates, may place liens against your property, or may require that the solar energy system loan be paid off prior to selling or refinancing your home.

  Things to Remember

  • Make sure that you have control over the payments being made to the contractor. Don’t allow your financial institution to make loan payments to your contractor before the work is performed. This places you at risk of having the contractor quit before completing the work, while leaving you responsible for paying for a system that you have not received.
  • Make sure you get mechanics lien release forms signed by your contractor, subcontractor and/or materials supplier(s). Otherwise, you run the risk of possibly having to pay twice if the general contractor fails to pay any subcontractors or materials suppliers who completed work on your home. Lien release forms are available on the CSLB website.
  • Make sure you get all sales pitches and claims regarding the benefits of solar energy system installation, especially those related to expected savings and power that will be produced, in writing. Verbal claims are difficult to prove.
  • Read the contract to make sure you understand what you’re agreeing to before signing.
  • California law requires that a financing estimate and disclosure document be delivered to you before you sign up for one of the property assessment programs noted above (PACE, HERO, etc.). That document includes: a description of the products and costs, financing costs, and explaination to the homeowner about making payments via the property tax bill, and a notice regarding the potential requirement to pay the remaining balance of the assessment upon sale or refinance. You can download that disclosure here
  • Be sure that you have received and read this disclosure document before you sign any property assessment authorization or contract.

  Read the bill that enacted these new requirements (LINK)

• Leasing

  You can lease a solar energy system for a fixed term (typically 20 years), during which time you’ll make fixed monthly payments (which may include an escalator clause) to the solar company while receiving the electricity the system produces.

  Pros

  • Little or no upfront costs
  • Ideally, you would pay less for the energy produced by the system over the term of the lease than you would have paid for the same amount of energy from your current electricity provider.
  • Solar company is responsible for system maintenance and all repairs.

  Cons

  • Since the solar company owns the system, they receive all tax credits and available deductions and incentives.
  • Selling your home during the term of the lease can become challenging. For example, solar energy system leases often require the homeowner to buy out the lease at a pre-determined price set by the solar leasing company before selling the home, or the person purchasing your home will have to agree to assume the lease. Some home buyers are reluctant to do that.
  • At the end of the lease, the solar company can remove the system if there is nothing in the contract that permits the homeowner to purchase the system at the end of the lease.

  Things to Remember

  • Check the contract to see you’re able to purchase the solar energy system after a certain amount of time.
  • Make sure you get all sales pitches and claims regarding the benefits of solar energy system installation, especially those related to expected savings and power that will be produced, in writing. Verbal claims are difficult to prove.
  • Read the contract to make sure you understand what you’re agreeing to before signing. Watch out for language in any contract that allows the company to place a lien on your home or accelerate payments (all payments become immediately due under the contract) if you miss a payment or fail to meet a contractual obligation.
• Power Purchase Agreements (PPAs)

  The solar company installs the system at no cost to you and sells you the power it generates at an agreed upon rate.

  You agree to allow a company to install and own a solar system on your home, and you purchase the electricity produced at a pre-established price per kWh (often with an escalator clause). As with a lease, the company gets the tax benefits, and the sale of your home can become more challenging.

  Pros

  • Little or no upfront costs
  • You may be able to purchase the system outright during the terms of the agreement.

  Cons

  • You may be required to pay for all energy the solar energy system produces, even if you don’t use it.
  • Since the solar company owns the system, they receive all tax credits and available deductions and incentives.
  • Selling your home during the term of the agreement can get more challenging. For example, these types of agreements often require the homeowner to buy out the contract at a pre-determined price set by the solar company before selling the home, or the person purchasing your home will have to agree to assume the contract. Some home buyers are reluctant to do that.

  Things to Remember

  • Think of a PPA’s escalator clause like you would a variable rate home mortgage that goes up every year. Check to see if the solar company offers a fixed rate instead of a variable rate. Unlike an escalator clause that changes from year-to-year over the life of the contract, a fixed rate, much like a fixed-rate mortgage, would remain locked-in for the entire life of the PPA.
  • Make sure you get all sales pitches and claims regarding the benefits of solar energy system installation, especially those related to expected savings and power that will be produced, in writing. Verbal claims are difficult to prove.
  • Read the contract to make sure you understand what you’re agreeing to before signing. Watch out for language in any contract that allows the company to place a lien on your home or accelerate payments (all payments become immediately due under the contract) if you miss a payment or fail to meet a contractual obligation.

Before your purchase, finance or lease of a residential solar energy system can be completed, your contractor must provide you with a “Solar Energy System Disclosure Document” cover page.

The information in this document is meant to help give you accurate, clear, and concise information regarding the installation of the solar energy system. The document should help reduce misunderstandings between you and your contractor.

The document includes the following three elements:

1. Total cost for the solar energy system, including financing and energy/power costs if applicable;
2. How to file a complaint with CSLB; and
3. Information about your right to cancel the contract (if not negotiated at the contractor’s place of business). Those 65 or older have a 5-business day right to cancel a home improvement contract; for all others it’s 3-business days.

The disclosure must be in the same language used in the oral sales presentation or the marketing materials the contractor provided to you. You can download the cover page document for contracts with a 3-day right to cancel in English and Spanish and the cover page document for contracts with a 5-day right to cancel in English and Spanish.

CSLB is currently working with the California Public Utilities Commission to develop an expanded document, which will contain information such as:

1. Total costs of the system installation;
2. Your anticipated savings;
3. Assumptions and inputs used to estimate the savings; and
4. Implications of various financing options

When completed and approved by the two agencies, the expanded document will be posted on this page.

Read the bill that enacted these new requirements(LINK)

NOTE: If you’re financing your system through one of the Property Assessed Clean Energy (PACE) programs, you’ll find your disclosure forms under the “Your Financing Options” tab.

1. Check the License First

   There are thousands of licensed contractors in California who can legally install photovoltaic solar energy systems because they hold one or more of the following license classifications:

   • "A" – General Engineering contractors are authorized to install solar energy systems.
   • "B" – General Building contractors are authorized to install solar energy systems within the definition of B&P Code section 7057, since a solar energy system constitutes the use of two unrelated building trades or crafts.
   • C-4 – Boiler, Hot-Water Heating and Steam Fitting contractors are authorized to perform projects that include solar heating equipment associated with systems authorized by this classification.
   • C-10 – Electrical contractors are authorized to perform any solar projects that generate, transmit, transform, or utilize electrical energy in any form for any purpose.
   • C-36 – Plumbing contractors are authorized to perform any project using solar equipment to heat water or fluids to a suitable temperature.
   • C-46 – Solar contractors install, modify, maintain, and repair thermal and photovoltaic solar energy systems. A licensee in this classification shall not undertake or perform building or construction trades, crafts or skills, except when required to install a thermal or photovoltaic solar energy system.
   • C-53 – Swimming Pool contractors are authorized to install solar heating in swimming pool projects.

   Generally, solar sales representatives must be registered with CSLB as Home Improvement Salespeople (HIS) unless the sales negotiation is initiated by the prospective buyer at or with a general merchandise retail establishment that operates from a fixed location (a storefront operation). Click here to see the other limited exceptions to who must be registered as HIS.

   Do not use a contractor who is not licensed to perform solar work.

   Click here to check a contractor’s license or HIS registration status.

2. Shop & Compare

   Get competing bids from at least three contractors, and research those you are considering. Ask for and check their references.

3. Do the Math

   Don’t rely on a contractor or salesperson’s promises. Use all specific cost figures in writing, your current power costs, and your electricity usage to determine if solar makes sense for you. There are cost calculators available online to assist you. (See links in More Solar Resources section below) If you are considering a lease or PPA, make sure you understand any escalators that will increase the costs over time.

4. Get it in Writing

   Once you select a contractor, make sure the contract you sign spells out everything you were promised, including all costs, the timeline for installation, and the exact equipment and number of panels to be used. Make sure the contract specifies that the contractor will pull all required building permits. If you were promised a minimum amount of power generation, be sure it’s written into the contract.

5. Review the Contract Closely

   Take time to review the contract closely before you sign it. Look for any hidden costs that were not disclosed. Make sure the contract explains how potential problems (maintenance, warranty, dispute resolution, etc.) will be handled.

   For lease and PPA contracts, beware of excessive cost escalators; and read what happens if you want to sell your home, if you want to exit the lease early, or if the equipment does not perform as promised.

6. Ask Questions

   Don’t hesitate to ask your contractor questions about the contract and the proposed installation. A good contractor will be happy to address concerns now to avoid misunderstandings later.

7. Don’t Rush

   Do not be pressured into making a rash decision. The solar market in California is very competitive, and there is no need to rush into signing a contract. If you have second thoughts after signing, California law allows you to cancel the contract without any penalty within three business days. To avoid problems, do not allow construction to begin during this three-day rescission period.

Below are links to additional resources to help ensure you make informed decisions about what can be considered a complex investment. This is not an all-inclusive list, but is a great place to start.

While CSLB does not endorse these materials, the information linked here is provided by local, state, and federal agencies, public-private partnerships, or nonprofit groups.

Have we missed anything? Drop us an email and let us know how we can make this page better or send us suggested links to add to this list.

FY 2022/2023 - Solar Complaint Report

The report further revealed that the 1,625 investigations completed in the timeline above resulted in the following dispositions:

Additionally, it was found that the 2,263 complaints came from 837 different zip codes across California.

The complaints grouped by zip code are as follows:

Important Restitution Fund Update

To ensure availability of remaining funds for claims received, CSLB is no longer accepting new claims for the Solar Energy System Restitution Program (SESRP).

Pursuant to Business and Professions Code section 7086.6, restitution payments from the SESRP account are only available as long as there are appropriated moneys available for payment.

CSLB has studied battery energy storage systems (BESS) since October 2016, after receiving public inquiries about the proper contractor license classification to install BESS. Staff held multiple public meetings, listening to hours of public testimony from hundreds of stakeholders, and has solicited and reviewed thousands of pages of technical BESS information.

This page details reports and information about BESS.

June 7, 2022 CSLB Staff Draft BESS Regulatory Language

June 3, 2022 CSLB Staff Report in Consultation with Expert Consultants

March 4, 2022* IBEW-NECA Response to February 23, 2022 CALSSA Letter

February 23, 2022* CALSSA Alternative BESS Regulatory Proposal

January 19, 2022* IBEW-NECA Alternative BESS Regulatory Proposal

January 7, 2022 CSLB Staff Draft Alternative BESS Regulatory Proposal

November 29, 2021 CSLB Staff Draft BESS Regulatory Language for November 29, 2021 Meeting Agenda

June 30, 2021* UC Berkeley Battery Energy Storage Systems License Classification Report

March 21, 2019 CSLB Battery Energy Storage Systems License Classification Report

Disclaimer: The Board is posting information which the Board has no content or formatting control. The Board does not modify materials created by external sources, therefore such documentation may not be fully accessible. Interested parties may request an accessible version of these materials by calling (916) 255-4000. The Board will forward the request to the originator of the document(s) for a response.