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:

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

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

CHAPTER 39-26.8

RESIDENTIAL SOLAR ENERGY DISCLOSURE AND HOMEOWNERS

BILL OF RIGHTS ACT

     39-26.8-1 Title.

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

Disclosure and Homeowners Bill of Rights Act."

     39-26.8-2. Definitions.

     As used in this chapter:

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

purposes:

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

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

     (iii) Purchases electricity under a power purchase agreement.

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

of title 42.

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

     (i) Between a customer and a solar retailer;

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

system owned by the solar retailer; and

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

years.

     (4) "Residential solar energy system" means:

     (i) A solar energy system that:

     (A) Is installed in the state;

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

household purposes; and

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

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

     (E) Does not include a generator that:

     (I) Produces electricity; and

     (II) Is intended for occasional use.

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

a power purchase agreement.

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

collects and uses solar energy to generate electricity.

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

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

purchase agreement;

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

agreement or proposed system lease agreement; or

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

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

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

and

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

for the lease of the residential solar energy system.

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

a residential solar energy system from a solar retailer.

     39-26.8-3. Applicability of chapter.

     (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

property.

     (b) This chapter does not apply to:

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

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

incidental to the transfer of title or rental;

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

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

agreement, power purchase agreement, or lease agreement;

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

not a residential solar energy system; or

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

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

than five (5) years.

     39-26.8-4. Disclosure statement required.

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

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

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

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

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

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

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

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

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

     (2) Contain:

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

customer;

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

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

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

agreement; and

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

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

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

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or maintenance support person; and

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

and 39-28.6-7.

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

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

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

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

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

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

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

geographic orientation in similar climates:

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

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

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

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

source of those assumptions, including:

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

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

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

or utility incentives;

     (iii) System production data, including production degradation;

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

program;

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

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

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

retailer; and

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

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

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

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

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

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

NECESSARILY REPRESENTATIVE OF FUTURE RESULTS. FOR FURTHER

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INFORMATION REGARDING RATES, CONTACT YOUR LOCAL UTILITY OR THE

STATE PUBLIC UTILITY COMMISSION"; and

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

TO REFUNDABILITY AND ARE SUBJECT TO CHANGE OR TERMINATION BY

LEGISLATIVE OR REGULATORY ACTION, WHICH MAY IMPACT SAVINGS

ESTIMATES. CONSULT A TAX PROFESSIONAL FOR MORE INFORMATION."

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

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

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

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

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

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

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

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

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

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

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

the system;

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

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

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

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

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

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

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

maintenance or repair.";

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

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

interconnect the system to the utility;

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

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

provide any warranty;

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

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

that may be charged to the customer;

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

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

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

STATEMENT CONCERNING COST SAVINGS, TAX BENEFITS, OR GOVERNMENT OR

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

THAT IS NOT INCLUDED IN THIS DISCLOSURE STATEMENT.";

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

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

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

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

GOVERNMENT AGENCY."; and

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

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

provided to the customer;

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

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

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

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

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

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

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

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

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

your tax advisor";

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

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

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

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

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

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

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

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;

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

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

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

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

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

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

installing a system";

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

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

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

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

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

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

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

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

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

purchase";

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

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

transfer;

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

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

or loss to the system;

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

purchase agreement; and

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

     39-26.8-8. Good faith estimate allowed.

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

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

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

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

estimate.

     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

this chapter by:

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

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

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

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

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

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

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

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

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

violation is alleged to have occurred.

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

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

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

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

distribution to a customer.

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

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

regulation.

     39-26.8-10. Rules and regulations.

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

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

chapter or any other provision of law.

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

entered into on or after September 1, 2019.

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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

***

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

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

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

liens filed against their residential property.

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

on or after September 1, 2019.

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