A solar energy installation contract is a critical document that outlines the terms and conditions for installing a solar energy system. This contract is especially important due to the prevalence of predatory sales practices in the solar industry. In fact, a report by the Solar Energy Industries Association (SEIA) highlights that consumer complaints about misleading sales tactics have increased by 65% over the past five years. House Bill SHB 2156, now passed by the legislature, addresses this critical need by implementing comprehensive solar consumer protections. It ensures transparency in contracting and safeguards consumer rights. Here’s what you need to know about your solar energy installation contract:
Written Agreement
Every contract must be written, match the language used during the sales presentation, and a copy must be given to the customer at signing.
Essential Components
- Total сost: The full dollar amount of the contract.
- Itemized work list: Detailed list of tasks, including any necessary upgrades to electrical systems or utility equipment.
- Financing details: Any financing included must be a separate line item and comply with state and federal loan regulations.
- Dealer fees: Disclosure of any fees paid by the contractor to a lender or third-party financing company.
- Cost per watt: Calculation of cost per watt, based on total contract amount divided by the system’s total direct current nameplate rating.
- Payment schedule: A milestone-based payment schedule, including customer’s cancellation rights and fees.
- System components: Model, brand, efficiency, and warranty period of major system components, with documentation of any changes during the contract term.
- Maintenance costs: Any ongoing maintenance costs included in the contract, and a list of maintenance activities required to maintain warranty and performance.
- Annual production: First-year production projections in kilowatt-hours, including the methodology and tool used for these projections.
- Unused credits: Explanation of the handling of unused net metering or other bill credits.
- Electric bill savings: Estimate of electric bill savings over the first year post-interconnection.
- Contact information: Details of the primary salesperson or sales firm, and the contractor.
- Subcontracting: Whether any work will be subcontracted.
Customer Acknowledgements
Statements to be initialed by the customer, acknowledging understanding of financing and cancellation rights, and implications of the solar energy installation on their tax liability and future roof repairs.
Installation Requirements
- Manufacturer Compliance: The contractor must install the system according to manufacturer instructions and in compliance with relevant codes and standards.
- Interconnection Approval: Utility interconnection application and documentation on responsibility for obtaining operational permission.
- Property Value Impact: Statement about potential changes in assessed and taxed value of the property.
- Power Outages: Explanation of system disconnection during power outages, unless equipped with backup power capabilities.
Roofing Work
Separate invoices for any roofing work, with itemized costs for tear-off and replacement.
Cancellation Rights
Customers can cancel the contract within three business days of signing. Contractors must terminate any security interest or lien within 20 days of receiving the customer’s cancellation notice. No charges can be imposed until the rescission period has passed.
Utility Interconnection
Installation can only proceed after utility approval of the interconnection application. Modifications must meet utility requirements, though certified contractors might be exempt.
Contract Liability Transfer
Any entity purchasing or assigned a contract inherits all claims and defenses the customer could assert against the contractor. Prominent notice of potential liability must be included.
Violations and Remedies
Non-compliance by contractors, subcontractors, or salespersons can result in liability for actual damages and is considered an unfair trade practice under the Consumer Protection Act. Deceptive statements or representations are prohibited.
Understanding these elements ensures both parties are protected and the installation process is transparent and fair.
