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CSLB Keeping Eye Out for Solar Field Contracting

Posted on 05/02/2017

Solar power continues to be one of the California construction industry's brightest stories – and one of CSLB's biggest source of complaints from consumers.

Contractors who do solar work must follow contracting law and regulations during all facets of a project, whether it's negotiating price, explaining financing options, performing installations, and obtaining the required construction permits.

To clarify, only contractors holding "A" General Engineering, "B" General Building, or C-46 Solar licenses can perform solar construction and installation. Contractors with a C-4 Boiler, Hot-Water Heating and Steam Fitting;C-10 ElectricalC-36 Plumbing or C-53 Swimming Pool license can only do solar work within their classification. 

Solar construction has boomed in California with the advent of new financing options and quickly evolving technology that has lowered the price of solar systems. As a result, many more companies and solar practitioners are taking advantage of opportunities in the industry.

CSLB statistics reflect the rapid growth in solar. The number of active C-46 Solar contractor licenses issued by CSLB has more than doubled in six years. Along with the jump in contractor numbers, applications by persons seeking to become home improvement salespersons (HIS), mostly in the solar industry, have surged. 

But that growth also has been accompanied by a rise in consumer complaints to CSLB about unscrupulous practices when dealing with solar contractors and salespersons. Misleading power generation claims, cost savings that don't match what had been promised, and hard-sell, deceptive financing are the leading cause of solar complaints filed with CSLB.

Specifically, solar companies, contractors, and salespersons need to follow the law, and industry best practices, in these areas:

Financing and contract/lease terms – CSLB is receiving more complaints about financing contracts, especially those involving leases and power purchase agreements. The differences between customer-owned, leased, and power purchase agreements need to be clearly explained, as well as terms of purchase contracts and equipment leases so consumers understand their financing options and contract commitments.

It's important not to oversell the capabilities, or cost-savings, of solar systems – Licensed Contractors need to make sure their solar projects produce the amount of power they claim, taking into account the variables of design, equipment, installation, site location, and weather/cloud patterns.

Companies acting in the capacity of a contractor – CSLB has investigated several reports of consumers who have signed leases with companies that dispatch a licensed contractor to install a system, but are not licensed themselves. CSLB holds that leasing companies are acting in the capacity of a licensed contractor in such transactions, and must hold a California contractor license in the proper classification, even if a licensed contractor performs the work. A licensee who works on behalf of non-licensee on such projects also faces disciplinary action from CSLB.

Solar sales and financing personnel must register as home improvement salespersons with CSLB – A trained and CSLB-registered sales staff is much less likely to mislead or misinform potential customers about the benefits of installing a solar system.

Don't sell customers more of a system than they need – It's important to match the size of a solar system to the residence or business, and power needs of the occupants. Overbuilt systems elevate the contract price, but may not be more efficient. In addition, utility companies generally will only pay for excess power from homes with properly sized solar systems. Solar contractors need to familiarize themselves with the permit requirements of the individual cities, counties, and utility departments, particularly if they're working in a new territory. 

Stay current with new laws and regulations affecting the industry – Two developments gave the solar industry in California a big boost at the end of the year. In December, the California Public Utilities Commission (CPUC) proposed to adopt a successor program to the existing net energy metering agreement that pays California consumers for returning unused solar power to utilities.

A week later, the U.S. Congress voted to extend the solar investment tax credit at the current 30 percent rate through 2019, after which it will fall to 26 percent in 2020, 22 percent in 2021 and 10 percent in 2022. An additional commence-construction clause will extend the credit to any project in development before 2024.

The two developments are expected to keep the sun shining on the fortunes of the California solar industry for the near future, if not longer. This article has been re-printed from CA Licensed Contractor newsletter issued by CSLB.

Freedom Business School offers courses in Law and Trade in every CA Contractor's License Classification. Each course includes Online Practice Exam option. Online Exams allow students to experience the same testing environment as at the State exam. Our Practice Exams are always up-to-date and contain the latest questions from the State exams. Freedom Business School enjoys one of the highest pass rates in the industry. 

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