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LC005742/SUB A

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2022

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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 Handy, Fogarty, Serpa, Cassar, Batista, Williams,
Ruggiero, McNamara, Potter, and Tobon

     Date Introduced: April 14, 2022

     Referred To: House Corporations

     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 26.8

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RESIDENTIAL SOLAR ENERGY DISCLOSURE AND HOMEOWNERS BILL OF RIGHTS

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ACT

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     39-26.8-1. Short Title.

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

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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 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) "Division" means the division of public utilities and carriers.

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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 system

 

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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) 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;

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

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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 a

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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 agreement

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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 solar agreements between solar retailers and customers for

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residential solar energy systems, including any solar agreement that accompanies the transfer of

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ownership or lease of real property.

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     (b) This chapter does not apply to:

 

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

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

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the transfer of title or rental;

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

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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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     (3) A sale or lease of, or the purchase of electricity from, a solar energy system that is not

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a residential solar energy system; or

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     (4) 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 than

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five (5) years.

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     39-26.8-4. Disclosure form required.

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

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the standard disclosure form established pursuant to subsection (b) of this section. This requirement

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shall apply to contracts entered into beginning forty-five (45) days from the date that the standard

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disclosure form is published by the office of energy resources.

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     (b) The office of energy resources shall develop a standard disclosure form. Use of and

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compliance with the standard disclosure form will satisfy the solar retailer’s obligation under this

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chapter. The standard disclosure form shall be published on the website of the office of energy

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resources. In developing the standard disclosure form, the office of energy resources may use as a

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model the renewable energy fund small scale participant consumer disclosure form developed by

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the Rhode Island commerce corporation. The office of energy resources shall also consult with

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industry and other stakeholders in the development of the content and format of the form and in

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regard to any changes to the form. At a minimum, the disclosure form shall:

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

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     (2) Contain fields that require providing the following information:

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

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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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39-28.6-7 and 39-28.6-8.

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

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     (a) The standard disclosure form shall include:

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     (1) An indication of whether operations or maintenance services are included as part of the

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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 geographic

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orientation in similar climates, the solar retailer must complete fields requiring entry of the

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following information:

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

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     (ii) An optional field for the estimated projected savings over any longer period not to

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exceed the anticipated useful life of the system; and

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     (3) Fields to disclose material assumptions used to calculate estimated projected savings

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and the 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 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;

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     (viii) A field to indicate whether costs of replacing equipment were assumed. If such costs

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were assumed, the form shall require a field for listing the costs associated with replacing

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equipment making up part of the system applicable.

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     (b) The standard disclosure form shall include the following disclosures and notices:

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

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of projected savings:

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     (i) "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 NECESSARILY

 

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REPRESENTATIVE OF FUTURE RESULTS. FOR FURTHER INFORMATION REGARDING

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RATES, CONTACT YOUR LOCAL UTILITY OR THE STATE PUBLIC UTILITY

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COMMISSION"; and

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     (ii) "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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     (2) A notice that: "Legislative or regulatory action may affect or eliminate your ability to

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sell or get credit for any excess power generated by the system, and may affect the price or value

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of that power."

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     (c) The standard disclosure form shall include fields requiring entry of the following

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information:

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     (1) 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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     (2) A description of any warranty, representation, or guarantee of energy production of the

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system; and

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     (3) The approximate start and completion dates for the installation of the system.

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     (d) The standard disclosure form shall require an indication of whether any warranty or

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maintenance obligations related to the system may be transferred by the solar retailer to a third

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party.

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     (e) The standard disclosure form shall require the following disclosure: "If this form

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indicates that the warranty or maintenance obligation may be transferred, then be advised - The

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maintenance and repair obligations under your contract may be assigned or transferred without

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your consent to a third party who will be bound to all the terms of the contract. If a transfer occurs,

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you will be notified of any change to the address, email address, or phone number to use for

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questions or payments or to request system maintenance or repair."

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     (f) The standard disclosure form shall require an indication of whether the solar retailer

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will obtain customer approval to connect the system to the customer's utility. If indicated that the

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retailer will not obtain said approval, there shall be an additional field requiring a description of

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what the customer must do to interconnect the system to the utility.

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     (g) The standard disclosure form shall require an indication of whether the solar retailer

 

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provides any warranties. If indicated that the retailer does provide warranties, there shall be an

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additional field requiring a description of any roof penetration warranty or other warranty that the

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solar retailer provides the customer.

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     (h) The standard disclosure form shall require the solar retailer to indicate whether the solar

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retailer will make a fixture filing or other notice in the city or town real property records covering

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the system, including a Notice of Independently-Owned Solar Energy System. If indicated that the

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retailer will make the fixture filing, there shall be an additional field requiring a description of any

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fees or other costs associated with the filing that may be charged to the customer.

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     (i) The standard disclosure form shall include the following statement in capital letters that:

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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 FORM

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CONCERNING COST SAVINGS, TAX BENEFITS, OR GOVERNMENT OR UTILITY

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INCENTIVES. YOU SHOULD NOT RELY UPON ANY PROMISE OR ESTIMATE THAT IS

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NOT INCLUDED IN THIS DISCLOSURE FORM."

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     (j) The standard disclosure form shall include the following statement in capital letters:

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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."

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     (k) The standard disclosure form shall include a statement that if the customer fails to make

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installment payments, the solar retailer may place liens for payment on their residence effective

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only after written notice is provided to the customer.

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     (l) The office of energy resources may require any additional information and disclosures

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deemed necessary to inform and protect customers.

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     (m) The written disclosure form requirement may be satisfied by the electronic delivery of

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the disclosure form to the potential customer as long as the required disclosures are displayed in a

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clear and conspicuous manner.

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     39-26.8-6. Standard from addendum for system lease agreement.

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     The standard disclosure form shall include an addendum that applies if a solar retailer is

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proposing to enter into a system purchase agreement with a potential customer. The system lease

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addendum shall require the solar retailer to provide a detailed comparison of the cost of leasing the

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system as compared to purchasing the system.

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     39-26.8-7. Standard form addendum for system purchase agreement.

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     (a) The standard disclosure form shall include an addendum that applies if a solar retailer

 

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is proposing to enter a system purchase agreement with a potential customer. The system purchase

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addendum shall include:

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     (1) The following statement: "You are entering into an agreement to purchase an energy

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generation system. You will own the system installed on your property. You may be entitled to

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federal tax credits because of the purchase. You should consult your tax advisor";

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

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     (3) Fields requiring:

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     (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 or

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

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

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before the end of the useful life of the system as a whole; and the total of all payments referred to

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in this subsection;

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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 (a)(3) of this section;

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     (5) A field to indicate whether the customer is responsible for insurance coverage. The

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field shall be accompanied by the statement: "If so indicated above, you are responsible for

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obtaining insurance coverage for any loss or damage to the system. You should consult an insurance

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professional to understand how to protect against the risk of loss or damage to the system. You

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should also consult your home insurer about the potential impact of installing a system.";

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     (6) Fields requiring information about whether the system may be transferred to a purchaser

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

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     (7) A field requiring a detailed comparison of the costs of purchasing as compared to

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leasing the system.

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     39-26.8-8. Standard form addendum for power purchase agreement.

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     (a) The standard disclosure form shall include an addendum that applies if a solar retailer

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is proposing to enter a power purchase agreement with a potential customer. The power purchase

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addendum shall include:

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     (1) The following statement: "You are entering into an agreement to purchase power from

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an energy generation system. You will not own the system installed on your property. You will not

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be entitled to any federal tax credit associated with the purchase.";

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     (2) Fields requiring information about whether the power purchase agreement may be

 

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

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conditions for a transfer;

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     (3) A field to indicate whether the solar retailer will obtain insurance. The field shall be

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accompanied by the statement: "If indicated above, the solar retailer will not obtain insurance

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against damage or loss to the system and the customer is responsible if there is damage or loss to

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the system"; and

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     (4) Fields requiring information about what will happen to the system at the end of the term

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of the power purchase agreement.

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     39-26.8-9. Customer right to cancel solar agreement.

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     The customer has the right to cancel or rescind a solar agreement within a forty-five (45)

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days of entering into the solar agreement. The standard disclosure form shall inform the customer

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of this right.

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     39-26.8-10. Good faith estimate allowed.

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     If a solar retailer does not, at the time of providing a disclosure form, have exact cost

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information required to be included in the disclosure form, pursuant to this chapter, the retailer may

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make a good faith estimate of that information, if the solar retailer clearly indicates that the

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information is an estimate and provides the basis for the estimate. If the solar retailer's final cost

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assessment differs from previously provided estimates, the retailer shall provide a new and

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complete disclosure form.

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     39-26.8-11. Division enforcement authority - administrative fine.

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

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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 division finds that the violation is a

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willful or intentional attempt to mislead or deceive a customer.

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

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

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alleged to have occurred.

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     (c) The division shall distribute an administrative fine collected under subsection (a)(3) of

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this section to a customer adversely affected by the solar retailer's failure or violation resulting in a

 

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fine under subsection (a)(3) of this section, after the division has conducted an administrative

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proceeding resulting in a determination of the appropriateness and amount of any distribution to a

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customer.

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

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

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     39-26.8-12. Rules and regulations.

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     The division may promulgate such rules and regulations as are necessary and proper to

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carry out the provisions of this chapter.

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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 forty-five (45) days after the publication of the standard disclosure form.

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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 by requiring

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residential solar system retailers to provide a standard disclosure form to customers as well as the

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providing the customer a right to cancel or rescind the solar agreement within forty-five (45) days

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of entering into the solar agreement.

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

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forty-five (45) days after the publication of the standard disclosure form.

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