The Arizona Revised Statutes have been updated to include the revised sections from the 57th Legislature, 2nd Regular Session. Please note that the next update of this compilation will not take place until after the conclusion of the 58th Legislature, 1st Regular Session, which convenes in January 2027.
This online version of the Arizona Revised Statutes is primarily maintained for legislative drafting purposes and reflects the version of law that is effective on January 1st of the year following the most recent legislative session. The official version of the Arizona Revised Statutes is published by Thomson Reuters.
44-1763. Distributed energy generation system agreements; disclosures; residential solar energy systems; exception
A. An agreement governing the sale or lease of a distributed energy generation system to any person or a political subdivision of this state must:
1. Be signed by the person buying or leasing the distributed energy generation system and must be dated. Any agreement that contains blank spaces affecting the timing, value or obligations of the agreement in a material manner when signed by the buyer or lessee is voidable at the option of the buyer or lessee until the distributed energy generation system is installed. Any blank spaces in the agreement must be shown to and initialed by the buyer or lessee at the time the buyer or lessee signs the agreement.
2. Be in at least ten-point type.
3. Include a provision, which must be separately acknowledged by the buyer or lessee, granting the buyer or lessee the right to rescind the sale or lease 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.
4. Provide a description, which must be separately acknowledged by the buyer or lessee, including the make and model of the distributed energy generation system's major components 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. For a lease, if the warranty period for any major component is less than the duration of the lease agreement, the length of the warranty must be disclosed to and separately acknowledged by the lessee and be written in bold type and separately initialed by the lessee. The warranty periods for a purchased distributed energy generation system, major components and labor shall be disclosed to and separately acknowledged by the buyer and be written in bold type and separately initialed by the buyer. For the purposes of this paragraph, "major components" includes:
(a) Photovoltaic solar panels.
(b) Inverters.
(c) Racking.
(d) Battery energy storage systems.
5. Separately set forth the following items in bold type, which must be separately acknowledged and initialed by the buyer or lessee, if applicable:
(a) The total purchase price or total cost to the buyer or lessee under the agreement for the distributed energy generation system over the life of the agreement.
(b) Any interest, installation fees, document preparation fees, service fees or other costs to be paid by the buyer or lessee of the distributed energy generation system.
(c) If the contractor provides credit to purchase a distributed energy generation system, the contractor shall disclose information pertaining to the number, amount and timing of payments that are scheduled to repay the credit obligation. Compliance with 12 Code of Federal Regulations part 1026 is considered compliance with this section.
6. Provide a disclosure in the sale or lease agreements, to the extent they are used by the seller or marketer in determining the purchase price of the agreement, that identifies all current tax incentives and rebates or other state or federal incentives for which the buyer or lessee may be eligible and any conditions or requirements pursuant to the agreement to obtain these tax incentives, rebates or other incentives.
7. Identify the tax obligations that the buyer or lessee may be required to pay as a result of buying or leasing the distributed energy generation system, including:
(a) Transaction privilege taxes that may be assessed against the person buying or leasing the distributed energy generation system.
(b) Any obligation of the buyer or lessee to transfer tax credits or tax incentives of the distributed energy generation system to any other person.
8. Disclose whether the warranty or maintenance obligations related to the distributed energy generation system may be sold or transferred to a third party.
9. Include a disclosure, the receipt of which shall be separately acknowledged by the buyer or lessee, if a transfer of the sale or lease agreement contains any restrictions pursuant to the agreement on the lessee's or buyer's ability to modify or transfer ownership of a distributed energy generation system, including whether any modification or transfer is subject to review or approval by a third party. If the modification or transfer of the distributed energy generation system is subject to review or approval by a third party, the agreement must identify the name, address and telephone number of, and provide for updating any change in, the entity responsible for approving the modification or transfer.
10. Include a disclosure, the receipt of which shall be separately acknowledged by the buyer or lessee, if a modification or transfer of ownership of the real property to which the distributed energy generation system is or will be affixed contains any restrictions pursuant to the agreement on the lessee's or buyer's ability to modify or transfer ownership of the real property to which the distributed energy generation system is installed or affixed, including whether any modification or transfer is subject to review or approval by a third party. If the modification or transfer of the real property to which the distributed energy generation system is affixed or installed is subject to review or approval by a third party, the agreement must identify the name, address and telephone number of, and provide for updating any change in, the entity responsible for approving the modification or transfer.
11. At the time the contract is signed, 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 that must be acknowledged and initialed by the buyer or lessee.
12. 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.
13. Include a disclosure that is written in bold type and all capital letters, the receipt of which shall be separately acknowledged by the buyer or lessee, that states:
Utility rates and utility rate structures are subject to change. These changes cannot be accurately predicted. Projected savings from your distributed energy generation system are therefore subject to change. Tax incentives are subject to change or termination by executive, legislative or regulatory action.
14. Comply with section 32-1158.
15. 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. The brief description must include, at a minimum, all of the following:
(a) Any applicable utility rates.
(b) Any assumption for an increase in future electricity rates.
(c) Any estimated system production.
(d) The status of utility compensation for exported energy that is generated by the distributed energy generation system.
B. If a document or sales presentation relating to a distributed energy generation system states or suggests that the distributed energy generation system will result in financial savings for a buyer or lessee, the document or sales presentation must substantiate the methodology used to calculate those savings and, if the document or sales presentation is intended for a specific potential buyer or lessee, reasonably quantify the cumulative savings expected for the duration of the agreement.
C. A document or sales presentation relating to a distributed energy generation system must disclose to what extent system maintenance and repairs are included and estimates for system maintenance costs that the customer is responsible to pay.
D. Before the maintenance or warranty obligations of a distributed energy generation system under an existing lease, financing or purchase agreement is transferred, the person who is currently obligated to maintain or warrant the distributed energy generation system must disclose the name, address and telephone number of the person who will be assuming the maintenance or warranty of the distributed energy generation system.
E. Recurring payments under a distributed energy generation system lease may not begin until the distributed energy generation system is granted permission to operate by a local utility and energized and interconnected by the lessor.
F. Before entering into a contract for the purchase or lease of a residential solar energy system, the licensed contractor shall 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 term expires. The written acknowledgment shall include a clear and conspicuous disclosure that states both of the following:
1. Unless roof damage is caused as the result of the licensed contractor's initial installation of the solar energy system, any repair or replacement of roofing materials that becomes necessary may be the responsibility of the buyer or lessee for all costs associated with the removal and reinstallation of the solar energy system and the roof and roofing materials if the repair or replacement is not the result of a violation of a local, state or federal law.
2. The removal and reinstallation of the solar energy system may void or otherwise affect any manufacturer or installer warranty and may limit or eliminate the liability of the original installation contractor.
G. This section does not apply to an individual or company, acting through its officers, employees or agents, that markets, sells, solicits, negotiates or enters into an agreement for the sale, financing or lease of a distributed energy generation system as part of a transaction involving the sale or transfer of the real property to which the distributed energy generation system is or will be affixed.