In California, the red tape keeps getting worse and worse. And it keeps getting more and more expensive to do business here in terms of both time and money.  In the latest regulatory salvo, the California Contractors State License Board has released its Solar Energy System Disclosure Document.

Although the mandatory disclosures are not particularly burdensome in and of themselves, they do tend to increase the likelihood of litigation between contractors and buyers. The discretionary disclosures (see below) could turn out to be quite a bit more burdensome to comply with.

Mandatory Disclosures

The mandatory disclosures are as follows:

  • The total cost, including financing and utilities

  • The procedure for filing a complaint against the installation contractor

  • Details on the Three-Day Right to Cancel the contract

The disclosures must be included on the front page or cover page of any contract for the installation of a solar energy system in a residential dwelling. They take effect on Jan. 1, 2019. They must be displayed in 16-point type (bold), and they must be written in the language used for the verbal sales pitch or written marketing materials.

Discretionary Disclosures

“Discretionary” here means not that you have the discretion whether or not to disclose the following items, but that the California Contractors State License Board has the discretion to require you to disclose them:

  • Sources of financing

  • The method used to calculate the number of solar panels required

  • Calculations used to determine the amount of energy generated

  • Any hidden fees, including third-party fees

  • The contractor’s license number

  • Typical malfunctions

  • The impact that the system may have on the sale of the owner’s home or its value

  • A calculator that provides the customer with the system’s projected power output

  • The terms of any guaranteed rebate

  • Information about the difference between purchasing and leasing a solar energy system

  • Other items too numerous to list here

As should be obvious by this point, the degree of the additional burden represented by the required disclosures will be determined largely by the Board.

The New California Solar Panels Requirement

California will require the installation of solar panels on nearly every new residential structure from 2020 onward. You might conclude, then, that contractors and subcontractors are going to have to become very familiar with these disclosures. The disclosure requirements include an exception, however, for systems that are installed as a ”standard feature on new construction,” which would seem to exempt the 2020 requirements from the disclosure rules.

The New Disclosures Are Not the Only Red Tape You’re Going to Have to Deal with When Doing Business in California

At CKB Vienna LLP, we can help you minimize the expense and legal risk of all kinds of regulatory compliance burdens and we can help you defend yourself if you are accused of non-compliance. Call us at 909-980-1040 or fill out our contact form to learn how we can assist you. We serve clients from all over Rancho Cucamonga, including Alta Loma and Etiwanda, as well as Upland, Fontana, Ontario, Chino Hills, and Claremont.

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