California solar contractors must be aware of new licensing, consumer protection rulings

The solar industry is arguably regulated more closely than any other home improvement industry since it’s connected to the utility grid — and subject to utility processes and pushback. Solar installers in California should pay close attention to two recent bureaucratic rulings that could affect their ability to continue business as usual.

New client paperwork requirement

In 2019, the California Public Utilities Commission developed a guide that solar installers must give to prospective customers in investor-owned utility (IOU) territories explaining everything they “need to know” before investing in solar, called the California Solar Consumer Protection Guide. The California Solar & Storage Association (CALSSA) got involved as soon as possible to revise some of the initial alarmist language in the pamphlet, said Josh Buswell-Charkow, deputy director of CALSSA.

Although contractors have technically been required to submit signed consumer guides since 2019, there weren’t consequences for noncompliance until this year. If the IOUs find that contractors are not uploading completed, signed documents, they will be added to a public list of noncompliant installers for that quarter and one following, according to Buswell-Charkow. Additionally, the IOUs will manually audit the interconnection applications of noncompliant installers during their semi-annual spot-checks. In California, residential interconnection applications are usually reviewed almost immediately by IOUs.

“As contractors know, time is of the essence here. It’s not a good thing when the IOUs are literally combing through your interconnection application to make sure you have done everything correctly,” Buswell-Charkow said. “The advice that we give to people with this guide is to make sure that you are complying with all of the requirements as far as administering it correctly and that you have good systems in place so you don’t face unintended consequences for non-compliance.”

Although CALSSA was able to suggest edits to earlier drafts, the current version is still 24 pages and includes sentiments that could potentially scare away hesitant buyers if read closely.

The guide starts with large text in an orange box with an exclamation point next to it: “PUTTING SOLAR ON YOUR HOME IS AN IMPORTANT FINANCIAL DECISION. DON’T SIGN A CONTRACT UNTIL YOU READ THIS DOCUMENT!”

It goes on to sections titled, “Watch out for false claims,” “Know your rights,” and 10 additional chapters.

“I can tell you for sure if CALSSA had the pen, there’s a bunch that we would de-emphasize, and there are other things that we would probably emphasize more. The frame of the guide would definitely be different,” Buswell-Charkow said. “On the other hand, we also think that there’s some useful information in this guide, and on the whole, we think information is a good thing and we certainly think consumers should know what they’re getting into before they decide to install solar.”

Adam Rizzo, partner at Escondido’s Palomar Solar & Roofing, thinks the guide is a good tool for consumers to navigate the crowded solar market, and that it should have been released 10 years ago.

“This is exactly how we’ve built our excellent reputation over the last 11 years — by teaching people how to do their research. We have been educating our potential clients this way since we started,” Rizzo said in an email.

He thinks the guide points out some important factors customers should research in a contractor, including how long a company has been in business, what jobs they subcontract out and how they say solar system monitoring will work.

Palomar Solar sales reps email the guide to prospective customers before even sitting down with them for their first meeting. Sometimes, customers have met with a handful of contractors already, but had not seen the guide until their meeting with Palomar, indicating that some solar companies could be in trouble if they’re audited on document submissions, Rizzo said.

Jeff Parr, CEO of San Ramon-based installer Solar Technologies, agrees that it’s good for the industry when consumers are more informed. He believes some solar companies don’t operate ethically, but he sees backdoor utility efforts at play with the guide.

“I think it’s safe to say what we saw is the opposition to distributed energy resources and to rooftop solar used those bad actors and an extremely small percentage of installations and solar customers as leverage points to try and put some obstructions between us and forward progress in this industry,” Parr said.

Parr isn’t opposed to the guide in general, but he takes issue with the tone.

“It was very much drafted essentially by the interests of the utilities, making it sound like everybody who went solar was going to get screwed,” he said.

New licensing requirements for solar + storage installers

While the consequences of an unsigned consumer protection guide is a simpler paperwork issue, a new ruling by the Contractor State Licensing Board (CSLB) could cause more complex problems for some of California’s installers.

The board recently ruled that a C-10 license is the only specialty license eligible to install solar + storage systems in the state. According to CALSSA’s CEO Bernadette Del Chiaro, the ruling makes it so that every person involved on a solar + storage installation — even if they only install panels and don’t touch the electrical portion — must be a C-10 electrical contractor in the state of California, or an electrical trainee registered in a state-approved apprenticeship program on a one-to-one ratio.

The California Energy Commission just passed the 2022 California Energy Code, which mandates that all new commercial buildings include solar + storage installations. The number of contractors available to install these systems might be small if the new C-10 licensing requirement goes into effect.

CALSSA analyzed Self-Generation Incentive Program (SGIP) and CSLB data and found only 22% of the solar + storage installations in the past five years were done by contractors holding just a C-10 license. The majority of systems are being installed by contractors who hold a C-46 solar contractor license, with and without other licenses.

Obtaining a C-10 license requires workers to complete four years of on-the-job experience at a journeyman level or higher, pass the electrical exam, finish an electrical apprenticeship program in the state and more. By comparison, the C-46 license requires workers to have either a college degree or four years of solar experience and to pass a solar-specific test. Del Chiaro said the new ruling sets an unreachable bar for California’s contractor community and threatens to obstruct solar + storage installations the rest of the year.

“There is a shortage of not just workers in California, but specifically electricians. It is simply impossible for this new requirement to be met,” she said in an email.

Del Chiaro believes this decision was pushed by utility interests working to slow down the fast-growing solar industry.

“This is not actually a union vs. non-union issue. There are more than enough jobs to go around for everyone. This is about the utilities trying to take down their competition,” Del Chiaro said.

Parr of Solar Technologies believed the utility powers involved relied on the same, few bad actors in the industry to encourage this ruling as they did for the consumer guide.

“I think it was a pretty clever play by them, because if you fast-forward five years from now, every solar system is tied to an energy storage system,” Parr said. “The utilities and the electrical workers unions are trying to use other things to try and either slow down the adoption of solar and energy storage or try and grab that market for themselves.”

CALSSA is in talks with CSLB now to get further clarification on this rule and explore legal options.

In the meantime, California contractors should make sure they’re submitting all necessary documentation to the IOUs and are equipped to hire workers to satisfy new CSLB licensing requirements.

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