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ARIZONA STATE SENATE
Fifty-Seventh Legislature, Second Regular Session
solar energy; inspection; contractors
Purpose
Prescribes requirements relating to the installation and inspection of solar energy devices. Outlines requirements for distributed energy generation system agreements and disclosure requirements for sales presentations or documents relating to a distributed energy generation system.
Background
An individual who is a licensed solar contractor and who installs a solar energy device in Arizona must: 1) possess the general license that is appropriate to the type of solar energy device that is installed; 2) meet any education and training standards that have been adopted by the registrar of contractors; and 3) pass an examination on the installation of the type of solar energy device to be installed, if the registrar of contractors has adopted such an examination. The installation of a solar energy device must meet the requirements of: 1) all applicable fire, safety and building codes; 2) consumer protection standards including any freeze protection and temperature related damage standards; and 3) all other applicable federal state and local laws. A contractor who fails to meet safety, installation or other statutorily prescribed standards is subject to disciplinary action (A.R.S. § 44-1762).
An agreement governing the financing, sale or lease of a distributed energy generation system to any person or political subdivision of Arizona must: 1) be signed by the person buying, financing or leasing the distributed energy generation system and must be dated; 2) include a provision, which must be separately acknowledged by the buyer or lessee, granting the buyer or lessee the right to rescind the financing, sale or agreement for a period of not less than three business days after the agreement is signed by the buyer or lessee and before the distributed energy generation system is installed; 3) provide a description of the distributed energy generation system, which must be separately acknowledged by the buyer or lessee, or a guarantee concerning energy production output that the distributed energy generation system being sold or leased will provide over the life of the agreement; and 4) contain other statutorily outlined disclosures, summaries and estimates. Recurring payments under a distributed energy generation system lease may not begin until the distributed energy generation system is energized and interconnected (A.R.S. § 44-1763).
A distributed energy generation system is a device or system that is used to generate or store electricity, that has an electric delivery capacity, singly or in connection with other similar devices or systems, greater than one kilowatt or one kilowatt-hour, that is primarily for on-site energy consumption and does not include an electric generator intended for occasional use (A.R.S. § 44-1761).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
Solar Energy Devices
1. Requires an individual who is a licensed solar contractor and who had a disciplinary action within the previous two years to obtain a third-party inspection to verify that the installation complies with the applicable safety standards, workmanship and other prescribed standards.
2. Requires the licensed solar contractor to provide a copy of the third-party inspection report to the individual who bought, financed or leased the solar energy device.
3. Requires the installation of a solar energy device to meet the manufacturer's installation requirements.
4. Requires a licensed solar contractor, if a third-party inspector identifies any deficiency in the installation of the solar energy device, to correct the deficiencies.
5. Deems that the failure to correct the deficiencies is subject to disciplinary action.
6. Requires a licensed solar contractor who installs solar energy devices in Arizona to obtain a third-party inspection verification.
Distributed Energy Generation System Agreements
7. Requires the length of the warranty, if the warranty period for any major component of a distributed energy generation system is less than the duration of an agreement governing the financing, sale or lease of the distributed energy generation system, to be written in bold type and separately initialed by the buyer or lessee.
8. Requires the distributed energy generation system agreement to include:
a) a written description that is communicated in a clear and easily understandable language and that is separately acknowledged by the buyer or lessee before the distributed energy generation system is installed; and
b) a copy of the written report by the licensed contractor to the buyer or lessee.
9. Requires the written description to include:
a) the current condition of the existing roof and the roofing components; and
b) the estimated total cost of removal and reinstallation of the distributed energy generation system.
10. Allows the licensed contractor who drafted the report to not be affiliated with or employed by the contractor or installer.
11. Requires the written report to include an evaluation of the current condition of the roof and the roofing components and clearly state in writing whether the roof and the roofing components will remain serviceable for at least the full duration of the agreement.
12. Requires the buyer or lessee to acknowledge receipt of the written report before the distributed energy generation system is installed.
13. Requires the statutorily prescribed items that must be separately set forth in a distributed energy generation system agreement to be in bold type and initialed by the buyer or lessee, if applicable.
14. Requires the summary of the total cost under distributed energy generation system agreements for maintaining and operating the distributed energy generation system over the life of the system to be acknowledged and initialed by the buyer or lessee.
15. Requires the outlined disclosure that must be included in a distributed energy generation system agreement to be written in bold type and all capital letters.
16. Removes the requirement that the distributed energy generation system agreement provide an estimate of the buyer's or lessee's future utility charges, if the agreement contains an estimate of the buyer's or lessee's future utility charges based on projected utility rates.
17. Removes the requirement that a document or sales presentation relating to a distributed energy generation system, if the document or sales presentation states or suggests that the distributed energy generation system states or suggests that the distributed energy generation system will result in financial savings for a buyer or lessee, must substantiate the methodology used to calculate and reasonably quantify the savings expected for the duration of the agreement.
18. Removes the requirement that a document or sales presentation relating to a distributed energy generation system that contains financial savings, comparative estimates or utility rate comparative estimates include historical utility rates for the immediately preceding period of time that is of the same duration as the proposed financing or lease period for the same class of utility customer in the same utility service territory as the prospective buyer or lessee.
19. Removes the requirement that the outlined historical rates be included in any comparative estimates.
20. Prohibits a contractor or agent of a contractor, for a distributed energy generation system, from making a written or oral statement regarding any estimated savings that a buyer or lessor may receive.
21. Removes the requirement that a document or sales presentation relating to a distributed energy generation system that contains an estimate of the buyer's or lessee's future utility charges based on projected utility rates contain an estimate of the buyer's or lessee's future utility charges as impacted by potential utility rate changes.
22. Prohibits recurring payments under a distributed energy generation system lease from beginning until the distributed energy generation system is approved by a local utility.
Miscellaneous
23. Defines third-party inspection as an inspection conducted by a licensed professional who is:
a) not affiliated with or employed by a contractor or an installer; and
b) authorized to examine and certify that a roof, home or solar system complies with the applicable building codes, safety standards and workmanship and permit requirements as determined by the chief building official or the authority with jurisdiction.
24. Defines Trombe wall as a massive equator-facing wall that is painted in a dark color to absorb thermal energy from incident sunlight.
25. Makes technical and conforming changes.
26. Becomes effective on the general effective date.
Prepared by Senate Research
February 6, 2026
SB/hk