BILL ANALYSIS Ó AB 2699 Page 1 Date of Hearing: May 18, 2016 ASSEMBLY COMMITTEE ON APPROPRIATIONS Lorena Gonzalez, Chair AB 2699 (Gonzalez) - As Amended April 13, 2016 ----------------------------------------------------------------- |Policy |Business and Professions |Vote:|15 - 0 | |Committee: | | | | | | | | | | | | | | ----------------------------------------------------------------- Urgency: No State Mandated Local Program: NoReimbursable: No SUMMARY: This bill strengthens protections and disclosures for consumers with respect to purchase and installation of solar panels. Specifically, this bill: 1)Requires the Contractor's State Licensing Board (Board) to develop a disclosure form related to solar panel purchase, including information about financing, terms, rebates, risks, fees, where to file complaints, and related information. Specifies a solar energy systems company must provide the form to a consumer prior to completion of a sale, financing, or lease of a solar energy system. AB 2699 Page 2 2)Requires the Board to establish through regulation requirements for a contractor to maintain a blanket performance and payment bond for the purpose of solar energy systems installation. 3)Requires a contractor installing a solar energy system to be subject to disclosures in existing law related to downpayments. FISCAL EFFECT: The Board anticipates a cost of $285,000 in the first year of implementation and $260,000 ongoing for licensing and enforcement staff (Contractors License Fund). COMMENTS: 1)Purpose. This bill intends to update disclosure laws and consumer protection in order to keep pace with a growing industry. The author indicates while the growth in residential solar is important to meet renewable energy goals, consumers have sometimes been surprised by the long-term financial impacts of these systems, and have complained about a lack of clarity and information related to effects on their ability to stay in or sell their home, and about the risks and benefits of the systems. 2)Solar Panels. The popularity of rooftop solar panels has grown rapidly, as has third-party ownership of residential systems, which allows individuals to lease the systems at a lower or no up-front cost. Systems must be installed by AB 2699 Page 3 licensed contractors and a solar salesperson also must register as a home improvement salesperson with the Board. Criticism has been levied about deceptive marketing practices that over-promise savings and under-inform about risk. Hundreds of complaints about solar marketing and installation have been received by the Board since 2010. 3)Support and Opposition. The California Municipal Utilities Association and the California Environmental Justice Alliance support this bill, noting the benefit of improved disclosure for consumers. The Silicon Valley Leadership Forum opposes unless amended, seeking amendments to narrow the bill to residential solar, require the disclosure to be provided by the contractor before installation, and require a 10-year warranty. Analysis Prepared by:Lisa Murawski / APPR. / (916) 319-2081