2019 -- H 5133

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LC000192

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2019

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A N   A C T

RELATING TO PUBLIC UTILITIES AND CARRIERS - RESIDENTIAL SOLAR ENERGY -

DISCLOSURE AND HOMEOWNERS BILL OF RIGHTS ACT

     

     Introduced By: Representatives McNamara, Ackerman, Newberry, Lyle, and Jackson

     Date Introduced: January 16, 2019

     Referred To: House Environment and Natural Resources

     It is enacted by the General Assembly as follows:

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     SECTION 1. Title 39 of the General Laws entitled "PUBLIC UTILITIES AND

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CARRIERS" is hereby amended by adding thereto the following chapter:

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CHAPTER 39-26.8

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RESIDENTIAL SOLAR ENERGY DISCLOSURE AND HOMEOWNERS

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BILL OF RIGHTS ACT

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     39-26.8-1 Title.

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     This chapter shall be known and may be cited as the "Residential Solar Energy

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Disclosure and Homeowners Bill of Rights Act."

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     39-26.8-2. Definitions.

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     As used in this chapter:

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     (1) "Customer" means a person who, for primarily personal, family, or household

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purposes:

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     (i) Purchases a residential solar energy system under a system purchase agreement;

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     (ii) Leases a residential solar energy system under a system lease agreement; or

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     (iii) Purchases electricity under a power purchase agreement.

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     (2) "Department" means the department of business regulation, established in chapter 14

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of title 42.

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     (3) "Power purchase agreement" means an agreement:

 

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     (i) Between a customer and a solar retailer;

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     (ii) For the customer's purchase of electricity generated by a residential solar energy

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system owned by the solar retailer; and

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     (iii) That provides for the customer to make payments over a term of at least five (5)

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years.

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     (4) "Residential solar energy system" means:

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     (i) A solar energy system that:

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     (A) Is installed in the state;

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     (B) Generates electricity primarily for on-site consumption for personal, family, or

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household purposes; and

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     (C) Is situated on no more than four (4) units of residential real property; and

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     (D) Has an electricity delivery capacity that exceeds one kilowatt; and

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     (E) Does not include a generator that:

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     (I) Produces electricity; and

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     (II) Is intended for occasional use.

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     (5) "Solar agreement" means a system purchase agreement, a system lease agreement, or

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a power purchase agreement.

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     (6) "Solar energy system" means a system or configuration of solar energy devices that

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collects and uses solar energy to generate electricity.

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     (7) "Solar retailer" means a person who:

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     (i) Sells or proposes to sell a residential solar energy system to a customer under a system

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purchase agreement;

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     (ii) Owns the residential solar energy system that is the subject of a system lease

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agreement or proposed system lease agreement; or

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     (iii) Sells or proposes to sell electricity to a customer under a power purchase agreement.

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     (8) "System lease agreement" means an agreement:

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     (i) Under which a customer leases a residential solar energy system from a solar retailer;

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and

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     (ii) That provides for the customer to make payments over a term of at least five (5) years

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for the lease of the residential solar energy system.

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     (9) "System purchase agreement" means an agreement under which a customer purchases

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a residential solar energy system from a solar retailer.

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     39-26.8-3. Applicability of chapter.

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     (a) This chapter applies to each solar agreement entered into on or after September 1,

 

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2019, including a solar agreement that accompanies the transfer of ownership or lease of real

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property.

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     (b) This chapter does not apply to:

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     (i) The transfer of title or rental of real property on which a residential solar energy

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system is or is expected to be located, if the presence of the residential solar energy system is

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incidental to the transfer of title or rental;

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     (ii) A lender, governmental entity, or other third party that enters into an agreement with

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a customer to finance a residential solar energy system but is not a party to a system purchase

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agreement, power purchase agreement, or lease agreement;

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     (iii) A sale or lease of, or the purchase of electricity from, a solar energy system that is

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not a residential solar energy system; or

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     (iv) The lease of a residential solar energy system or the purchase of power from a

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residential solar energy system under an agreement providing for payments over a term of less

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than five (5) years.

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     39-26.8-4. Disclosure statement required.

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     (a) Before entering a solar agreement, a solar retailer shall provide to a potential customer

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a separate, written disclosure statement as provided in this section and, as applicable, §§ 39-26.8-

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5, 39-26.8-6 and 39-26.8-7.

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     (b) The requirement under subsection (a) of this section may be satisfied by the electronic

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delivery of a disclosure statement to the potential customer. An electronic document under

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subsection (a) of this section satisfies the font-size standard under subsection (c)(1) of this section

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if the required disclosures are displayed in a clear and conspicuous manner.

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     (c) A disclosure statement under subsection (a) of this section shall:

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     (1) Be in at least twelve (12) point font;

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     (2) Contain:

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     (i) The name, address, telephone number, and any email address of the potential

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customer;

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     (ii) The name, address, telephone number, and email address of the solar retailer; and

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     (iii)(A) The name, address, telephone number, email address, and state contractor license

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number of the person who is expected to install the system that is the subject of the solar

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agreement; and

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     (B) If the solar retailer selected the person who is expected to provide operations or

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maintenance support to the potential customer or introduced that person to the potential customer,

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the name, address, telephone number, email address, and state contractor license of the operations

 

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or maintenance support person; and

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     (3) Include applicable information and disclosures as provided in §§ 39-28.6-5, 39-28.6-6

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and 39-28.6-7.

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     39-26.8-5. Contents of disclosure statement for any solar agreement.

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     (a) If a solar retailer is proposing to enter any solar agreement with a potential customer,

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the disclosure statement required in § 39-26.8-4 shall include:

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     (1) A statement indicating that operations or maintenance services are not included as

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part of the solar agreement, if those services are not included as part of the solar agreement;

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     (2) If the solar retailer provides any written estimate of the savings the potential customer

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is projected to realize from the system based on similar installations that have the same

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geographic orientation in similar climates:

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     (i) The estimated projected savings over the life of the solar agreement; and

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     (ii) At the discretion of the solar retailer, the estimated projected savings over any longer

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period not to exceed the anticipated useful life of the system;

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     (3) Any material assumptions used to calculate estimated projected savings and the

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source of those assumptions, including:

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     (i) If an annual electricity rate increase is assumed, the rate of the increase and the solar

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retailer's basis for the assumption of the rate increase;

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     (ii) The potential customer's eligibility for or receipt of tax credits or other governmental

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or utility incentives;

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     (iii) System production data, including production degradation;

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     (iv) The system's eligibility for interconnection under any net metering or similar

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program;

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     (v) Electrical usage and the system's designed offset of the electrical usage;

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     (vi) Historical utility costs paid by the potential customer;

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     (vii) Any rate escalation affecting a payment between the potential customer and the solar

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retailer; and

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     (viii) The costs associated with replacing equipment making up part of the system or, if

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those costs are not assumed, a statement indicating that those costs are not assumed; and

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     (ix) Two (2) separate statements in capital letters in close proximity to any written

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estimate of projected savings, with substantially the following form and content:

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     (A) "THIS IS AN ESTIMATE. UTILITY RATES MAY GO UP OR DOWN AND

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ACTUAL SAVINGS, IF ANY, MAY VARY. HISTORICAL DATA ARE NOT

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NECESSARILY REPRESENTATIVE OF FUTURE RESULTS. FOR FURTHER

 

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INFORMATION REGARDING RATES, CONTACT YOUR LOCAL UTILITY OR THE

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STATE PUBLIC UTILITY COMMISSION"; and

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     (B) "TAX AND OTHER FEDERAL, STATE, AND LOCAL INCENTIVES VARY AS

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TO REFUNDABILITY AND ARE SUBJECT TO CHANGE OR TERMINATION BY

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LEGISLATIVE OR REGULATORY ACTION, WHICH MAY IMPACT SAVINGS

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ESTIMATES. CONSULT A TAX PROFESSIONAL FOR MORE INFORMATION."

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     (x) A notice with substantially the following form and content: "Legislative or regulatory

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action may affect or eliminate your ability to sell or get credit for any excess power generated by

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the system, and may affect the price or value of that power.";

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     (xi) A notice advising the customer that the customer has the right to cancel or rescind a

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solar agreement within a ninety (90) day period prior to installation;

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     (xii) A statement describing the system and indicating the system design assumptions,

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including the make and model of the solar panels and inverters, system size, positioning of the

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panels on the customer's property, estimated first-year energy production, and estimated annual

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energy production degradation, including the overall percentage degradation over the term of the

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solar agreement or, at the solar retailer's option, over the estimated useful life of the system;

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     (xiii) A description of any warranty, representation, or guarantee of energy production of

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the system;

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     (xiv) The approximate start and completion dates for the installation of the system;

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     (xv) A statement indicating whether any warranty or maintenance obligations related to

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the system may be transferred by the solar retailer to a third party and, if so, a statement with

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substantially the following form and content: "The maintenance and repair obligations under your

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contract may be assigned or transferred without your consent to a third party who will be bound

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to all the terms of the contract. If a transfer occurs, you will be notified of any change to the

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address, email address, or phone number to use for questions or payments or to request system

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maintenance or repair.";

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     (xvi) If the solar retailer will not obtain customer approval to connect the system to the

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customer's utility, a statement to that effect and a description of what the customer must do to

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interconnect the system to the utility;

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     (xvii) A description of any roof penetration warranty or other warranty that the solar

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retailer provides the customer or a statement, in bold capital letters, that the solar retailer does not

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provide any warranty;

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     (xviii) A statement indicating whether the solar retailer will make a fixture filing or other

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notice in the city or town real property records covering the system, including a Notice of

 

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Independently-Owned Solar Energy System, and any fees or other costs associated with the filing

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that may be charged to the customer;

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     (xix) A statement in capital letters with substantially the following form and content:

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"NO EMPLOYEE OR REPRESENTATIVE OF [name of solar retailer] IS AUTHORIZED TO

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MAKE ANY PROMISE TO YOU THAT IS NOT CONTAINED IN THIS DISCLOSURE

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STATEMENT CONCERNING COST SAVINGS, TAX BENEFITS, OR GOVERNMENT OR

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UTILITY INCENTIVES. YOU SHOULD NOT RELY UPON ANY PROMISE OR ESTIMATE

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THAT IS NOT INCLUDED IN THIS DISCLOSURE STATEMENT.";

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     (xx) A statement in capital letters with substantially the following form and content:

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"[name of solar retailer] IS NOT AFFILIATED WITH ANY UTILITY COMPANY OR

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GOVERNMENT AGENCY. NO EMPLOYEE OR REPRESENTATIVE OF [name of solar

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retailer] IS AUTHORIZED TO CLAIM AFFILIATION WITH A UTILITY COMPANY OR

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GOVERNMENT AGENCY."; and

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     (xxi) A statement that if the customer fails to make installment payments, the solar

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retailer may place liens for payment on their residence effective only after written notice is

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provided to the customer;

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     (xxii) Any additional information, statement, or disclosure the solar retailer considers

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appropriate, as long as the additional information, statement, or disclosure does not have the

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purpose or effect of obscuring the disclosures required under this section.

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     39-26.8-6. Contents of disclosure statement for system purchase agreement.

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     (a) If a solar retailer is proposing to enter a system purchase agreement with a potential

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customer, the disclosure statement required in § 39-26.8-4 shall include:

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     (1) A statement with substantially the following form and content: "You are entering an

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agreement to purchase an energy generation system. You will own the system installed on your

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property. You may be entitled to federal tax credits because of the purchase. You should consult

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your tax advisor";

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     (2) The price quoted to the potential customer for a cash purchase of the system;

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     (3)(i) The schedule of required and anticipated payments from the customer to the solar

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retailer and third parties over the term of the system purchase agreement, including application

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fees, up-front charges, down payment, scheduled payments under the system purchase agreement,

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payments at the end of the term of the system purchase agreement, payments for any operations

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or maintenance contract offered by or through the solar retailer in connection with the system

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purchase agreement, and payments for replacement of system components likely to require

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replacement before the end of the useful life of the system as a whole; and

 

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     (ii) The total of all payments referred to in subsection (3)(i) of this section;

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     (4) A statement indicating that the cost of insuring the system is not included within the

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schedule of payments under subsection (3) of this section;

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     (5) A statement, if applicable, with substantially the following form and content: "You

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are responsible for obtaining insurance coverage for any loss or damage to the system. You

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should consult an insurance professional to understand how to protect against the risk of loss or

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damage to the system. You should also consult your home insurer about the potential impact of

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installing a system";

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     (6) Information about whether the system may be transferred to a purchaser of the home

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or real property where the system is located and any conditions for a transfer; and

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     (7) The statements/notices required in §§ 39-26.8-5(a)(2)(xi) and 39-26.8-5(a)(2) (xxi).

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     39-26.8-7. Contents of disclosure statement for power purchase agreement.

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     (a) If a solar retailer is proposing to enter a power purchase agreement with a potential

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customer, the disclosure statement required in § 39-26.8-4 shall include:

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     (1) A statement with substantially the following form and content: "You are entering an

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agreement to purchase power from an energy generation system. You will not own the system

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installed on your property. You will not be entitled to any federal tax credit associated with the

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purchase";

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     (2) Information about whether the power purchase agreement may be transferred to a

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purchaser of the home or real property where the system is located and, if so, any conditions for a

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transfer;

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     (3) If the solar retailer will not obtain insurance against damage or loss to the system, a

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statement to that effect and a description of the consequences to the customer if there is damage

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or loss to the system;

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     (4) Information about what will happen to the system at the end of the term of the power

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purchase agreement; and

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     (5) The statements/notices required in §§ 39-26.8-5(a)(2)(xi) and 39-26.8-5(a)(2) (xxi).

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     39-26.8-8. Good faith estimate allowed.

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     A solar retailer that does not, at the time of providing a disclosure statement required in §

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39-26.8-4 have information required under §§ 39-26.8-5, 39-26.8-6 and 39-26.8-7 to be included

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in the disclosure statement may make a good faith estimate of that information, if the solar

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retailer clearly indicates that the information is an estimate and provides the basis for the

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estimate.

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     39-26.8-9. Department enforcement authority -- Administrative fine.

 

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     (a) Subject to subsection (b) of this section, the department may enforce the provisions of

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this chapter by:

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     (1) Conducting an investigation into an alleged violation of this chapter;

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     (2) Issuing a cease and desist order against a further violation of this chapter; and

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     (3) Imposing an administrative fine of no more than two thousand five hundred dollars

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($2,500) per solar agreement on a solar retailer that:

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     (i) Materially fails to comply with the disclosure requirements of this chapter; or

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     (ii) Violates any other provision of this chapter, if the department finds that the violation

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is a willful or intentional attempt to mislead or deceive a customer.

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     (b) The department may not commence any enforcement action under this section more

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than four (4) years after the date of execution of the solar agreement with respect to which a

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violation is alleged to have occurred.

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     (c) The department shall distribute an administrative fine collected under subsection

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(a)(3) of this section to a customer adversely affected by the solar retailer's failure or violation

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resulting in a fine under subsection (a)(3) of this section, after the department has conducted an

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administrative proceeding resulting in a determination of the appropriateness and amount of any

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distribution to a customer.

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     (d) Nothing in this chapter may be construed to affect a remedy a customer has

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independent of this chapter; or the division's ability or authority to enforce any other law or

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regulation.

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     39-26.8-10. Rules and regulations.

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     The director of the department of business regulation may promulgate such rules and

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regulations as are necessary and proper to carry out the duties assigned to the director by this

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chapter or any other provision of law.

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     SECTION 2. This act shall take effect upon passage and shall apply to solar agreements

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entered into on or after September 1, 2019.

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LC000192

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO PUBLIC UTILITIES AND CARRIERS - RESIDENTIAL SOLAR ENERGY -

DISCLOSURE AND HOMEOWNERS BILL OF RIGHTS ACT

***

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     This act would grant residential purchasers of solar energy systems protections requiring

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solar system retailers to provide disclosures in the retail sale/lease documents as well-as the right

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to cancel/rescind the agreement within ninety (90) days prior to installation and notice of any

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liens filed against their residential property.

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     This act would take effect upon passage and would apply to solar agreements entered into

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on or after September 1, 2019.

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