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ARIZONA STATE SENATE
Fifty-Seventh Legislature, Second Regular Session
AMENDED
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 a licensed solar contractor before the initial installation, if the licensed contractor is installing a solar energy device on a roof, to evaluate the roof and roofing components to determine whether the roof is capable of supporting the installation.
2. Requires the licensed solar contractor to recommend that the customer obtain an inspection by a licensed roofing contractor.
3. Subjects a licensed solar contractor who does not evaluate the roof and roofing components to determine whether the roof is capable of supporting installation before installing a solar energy device to disciplinary action.
4.
Deems that the licensed solar contractor, upon installation of a solar
energy device, has accepted the surface of the roof for the purposes of initial
installation and is responsible for repairs to the roof that are for
damage that is caused by the installation.
5. Specifies that the outlined requirements for a licensed solar contractor to evaluate and make determinations related to the roof and roof components does not apply to structures that are used primarily for shade, including shade that is used for vehicles or livestock.
Distributed Energy Generation System Agreements
6. Requires the warranty periods for a purchased distributed energy generation system, major components and labor to be disclosed to and separately acknowledged by the buyer, be written in bold type and separately initialed by the buyer.
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 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.
9. Requires a contractor, if the contractor provides credit to purchase a distributed energy generation system, to disclose information pertaining to the number, amount and timing of payments that are scheduled to repay the credit obligation.
10. Specifies that compliance with federal regulations relating to truth in lending is considered compliance with the statutory requirements related to distributed energy generation system agreements.
11. 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.
12. Removes the requirement that a person or political subdivision of Arizona identify the assessed value and the property tax assessments associated with the distributed energy generation system calculated in the year the agreement is signed for agreements governing the sale or lease of distributed energy generation systems.
13. Requires an agreement that contains an estimate of the buyer's or lessee's future utility charges based on projected utility rates to substantiate the methodology that was used to calculate the utility charges and comparative estimates.
14. 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.
15. Requires, for an agreement governing the sale or lease of a distributed energy generation system, that at the time the contract is signed, the person or political subdivision of Arizona that entered into the agreement to provide a summary of the total estimated costs under the agreement for maintaining and operating the distributed energy generation system over the life of the distributed energy generation system.
16. Removes the requirement, for an agreement governing the sale or lease of a distributed energy generation system, that the person or political subdivision of Arizona that entered into the agreement provide an estimate of the buyer's or lessee's future utility charges as impacted by potential utility rate changes.
17. Requires, for an agreement governing the sale or lease of a distributed energy generation system, the person or political subdivision of Arizona that entered into the agreement to provide a disclosure that notifies the consumer whether and to what extent system maintenance and repairs are included in the agreement and the estimated system maintenance costs that the consumer is responsible to pay and that is acknowledged and initialed by the buyer or lessee.
18. Requires, for an agreement governing the sale or lease of a distributed energy generation system, the person or political subdivision of Arizona that entered into the agreement to include a brief description of the basis for any savings estimate that was provided to the purchaser at the time the contract is signed, as applicable.
19. Requires the outlined brief description to include, at a minimum:
a) any applicable utility rates;
b) any assumption for an increase in future electricity rates;
c) any estimated system production; and
d) the status of utility compensation for exported energy that is generated by the distributed energy generation system.
20. Removes the requirement that a document or sales presentation relating to a distributed energy generation system include historical utility rates for the immediately preceding period of time if the document or sales presentation contains financial savings comparative estimates or utility rate comparative estimates.
21. Requires a document or sales presentation relating to a distributed energy generation system to disclose to what extent maintenance and repairs are included and estimates for system maintenance costs that the customer is responsible to pay.
22. Removes the requirement that if a document or sales presentation relating to a distributed energy generation system contains an estimate of the buyers or lessees future utility charges based on projected utility rates, that the document or sales presentation contain an estimate of the buyer's or lessees future utility charges as impacted by potential utility rate changes.
23. Prohibits recurring payments under a distributed energy generation system lease from beginning until the distributed energy generation system is granted permission to operate by a local utility and energized and interconnected by the lessor.
24. Requires the licensed contractor, before entering into a contract for the purchase or lease of a residential solar energy system, to obtain a written acknowledgement from the buyer or lessee stating that the buyer or lessee understands that the roofing materials or the structure may require repair or replacement before the purchase or lease agreement term expires.
25. Requires the written acknowledgement to include an outlined clear and conspicuous disclosure.
Miscellaneous
26. Removes statutorily prescribed disclosure requirements relating to the financing of a solar energy device or distributed energy generation system.
27. Defines Trombe wall as a massive equator-facing wall that is painted in a dark color to absorb thermal energy from incident sunlight.
28. Modifies the definition of solar energy device by limiting it to a system that is used primarily to serve on-site demand at a residential dwelling unit or multifamily structure.
29. Specifies that a solar energy device does not include a utility scale solar project or a system that is installed on a commercial, industrial or institutional structure or a system that is designed primarily to serve an off-site load.
30. Defines major components as photovoltaic solar panels, inverters, racking or battery energy storage systems.
31. Makes technical and conforming changes.
32. Becomes effective on the general effective date.
Amendments Adopted by Committee of the Whole
1. Requires the installation of a solar energy device to meet the requirements of wind, load, structural and seismic building codes.
2. Removes the requirement that an individual who is a licensed solar contractor and who had a disciplinary action within the previous two years obtain a third-party inspection to verify that the installation complies with the applicable safety standards, workmanship and other prescribed standards.
3. Requires a licensed solar contractor to evaluate and verify the structural integrity of the roof and roofing components before installing a solar energy device.
4. Deems that the licensed solar contractor, upon installation of a solar energy device, has accepted the surface of the roof for the purposes of installation and is responsible for repairs to the roof that are caused by the installation.
5. Modifies the list of what must be included in an agreement governing the financing, sale or lease of a distributed energy generation system to any person or political subdivision of Arizona.
6. Reinstates statutorily prescribed requirements relating to documents or sales presentations for distributed energy generation systems that:
a) state or suggest that the distributed energy generation system will result in financial savings for a buyer or lessee;
b) contain financial savings comparative estimates or utility rate comparative estimates; and
c) contain a financial estimate of the buyer's or lessee's future utility charges based on projected utility rates.
7. Removes the prohibition on a contractor or the agent of a contractor for a distributed energy generation system from making a written or oral statement regarding any estimated savings that the buyer or lessor may receive.
8. Requires the licensed solar contractor, before entering into a contract for the purchase or lease of a residential solar energy system, to obtain a written acknowledgment from the buyer or lessee stating that the buyer or lessee understands that the roofing materials or the structure may require repair or replacement before the purchase or lease agreement expires.
9. Removes the definition of third-party inspection.
10. Makes conforming changes.
Amendments Adopted by the House of Representatives
1. Requires a licensed solar contractor before the initial installation, if the licensed solar contractor is installing a solar energy device on a roof, to evaluate the roof and roofing components to determine whether the roof is capable of supporting the installation.
2. Removes the requirement that the installation of a solar energy device meet the requirements of all wind, load, structural and seismic building codes.
3. Requires the licensed solar contractor to recommend that the customer obtain an inspection by a licensed roofing contractor.
4. Specifies that the outlined requirements for a licensed solar contractor to evaluate and make determinations related to the roof and roof components does not apply to structures that are used primarily for shade, including shade that is used for vehicles or livestock
5. Specifies that compliance with federal regulations relating to truth in lending is considered compliance with the statutory requirements related to distributed energy generation system agreements.
6. Modifies the written acknowledgment from the buyer or lessee that is obtained by the licensed contractor before entering into a contract for the purchase or lease of a residential solar energy system.
7. Modifies disclosure requirements relating to agreements, documents and sales presentations for distributed energy generation systems.
8. Removes statutorily prescribed disclosure requirements relating to the financing of a solar energy device or distributed energy generation system.
9. Modifies the definition of solar energy device by limiting it to a system that is used primarily to serve on-site demand at a residential dwelling unit or multifamily structure.
10. Specifies that a solar energy device does not include a utility scale solar project or a system that is installed on a commercial, industrial or institutional structure or a system that is designed primarily to serve an off-site load.
11. Defines major components.
12. Makes conforming changes.
Senate Action House Action
NR 2/10/26 DP 6-2-0 NREW 3/17/26 DPA 6-1-2-1
3rd Read 3/2/26 17-12-1 3rd Read 5/5/26 51-0-9
Prepared by Senate Research
May 11, 2026
SB/hk