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SB1419 - 572R - S Ver
Senate Engrossed
solar energy;
inspection; contractors
State of Arizona
Senate
Fifty-seventh Legislature
Second Regular Session
2026
SENATE BILL 1419
AN
ACT
amending sections 44-1761, 44-1762
and 44-1763, arizona revised statutes; relating to solar energy devices.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it
enacted by the Legislature of the State of Arizona:
Section 1. Section 44-1761, Arizona Revised
Statutes, is amended to read:
START_STATUTE
44-1761.
Definitions
In this article, unless the context otherwise requires:
1. "Collector" means a component of a
solar energy device that is used to absorb solar radiation, convert it to heat
or electricity and transfer the heat to a heat transfer fluid or to storage.
2. "Distributed energy generation system":
(a) Means a device or system that is used to
generate or store electricity, that has an electric delivery capacity, singly
or in connection with other similar devices or systems, greater than one
kilowatt or one kilowatt-hour, and that is primarily for on-site energy
consumption.
(b) Does not include an electric generator that is intended
for occasional use.
3. "Energize" or "energized"
means that the distributed energy generation system is installed and
operational for its intended purposes of generating or storing electricity.
4. "Heat exchanger" means a component of a
solar energy device that is used to transfer heat from one fluid to another.
5. "Interconnected" or
"interconnection" means a distributed energy generation system that
is connected to the power grid and that is able to transfer electricity to the
power grid.
6. "Seller or marketer" means an
individual or a company acting through its officers, employees or agents that
markets, sells or solicits the sale, financing or lease of distributed energy
generation systems or negotiates or enters into agreements for the sale,
financing or lease of distributed energy generation systems.
7. "Solar daylighting" means a device that
is specifically designed to capture and redirect the visible portion of the
solar beam spectrum, while controlling the infrared portion, for use in
illuminating interior building spaces in lieu of artificial lighting.
8. "Solar energy device":
(a) Means a system or series of mechanisms that is
designed primarily to provide heating, to provide cooling, to produce
electrical power, to produce mechanical power, to provide solar daylighting or
to provide any combination of the foregoing by means of collecting and
transferring solar generated energy into such uses either by active or passive
means. Such systems may also have the capability of storing such
energy for future utilization. Passive systems shall clearly be
designed as a solar energy device such as a trombe wall and not merely a part
of a normal structure such as a window.
For the
purposes of this subdivision, "Trombe wall" means a massive equator-facing
wall that is painted in a dark color to absorb thermal energy from incident
sunlight.
(b) Includes a distributed energy generation system.
END_STATUTE
Sec. 2. Section 44-1762, Arizona Revised
Statutes, is amended to read:
START_STATUTE
44-1762.
Solar energy device warranties; installation standards;
inspections
A. The collectors, heat exchangers and storage units
of a solar energy device that is sold or installed in this state or leased or
financed under an agreement pursuant to section 44-1763, and the
installation of the solar energy device, shall be warranted for a period of at
least two years or shall include an energy production output guarantee provided
pursuant to section 44-1763, subsection A, paragraph 4. The remaining
components of the solar energy device and their installation shall be warranted
for a period of at least one year.
B. Any person who manufactures, furnishes for
installation or installs a solar energy device shall provide with the
solar energy
device a written statement of warranty,
responsibilities assumed or disclaimed and performance data of the solar energy
device and components of the solar energy device as prescribed by section 44-1763
as part of the agreement for the financing, sale or lease of a solar energy
device. The form of the statement required by this subsection is
subject to approval by the registrar of contractors. The statement shall
specify the source of any performance data it contains. A copy of
the statement shall be delivered to the registrar of contractors where it shall
be kept on public file.
C. A person who sells a solar energy device in this
state shall furnish a certificate to the buyer that the solar energy device
complies with the requirements of this section.
D. A solar energy device that is sold or installed
in this state shall comply with all applicable state and federal consumer
protection, rating, certification, performance, marking, installation and
safety standards that are required by section 44-1763.
E. An individual who installs a solar energy device
in this state, in addition to being a licensed solar contractor under title 32,
chapter 10, article 4, shall:
1. Possess the general license that is appropriate
to the type of solar energy device that is installed. Installers of
a solar water heater or a photovoltaic device shall possess an appropriate
contractor's license.
2. Meet any education and training standards that
have been adopted by the registrar of contractors.
3. Pass an examination on the installation of the
type of
solar energy
device to be installed, if the
registrar of contractors has adopted such an examination.
F. Solar energy devices that are designed or
installed by the final owner are exempt from the requirements of subsections A
through E of this section.
G. The installation of a solar energy device shall
meet the requirements of:
1. All
applicable
fire, safety
, wind, load, structural, seismic
and building codes
as prescribed by a local authority that has jurisdiction
.
2. Consumer protection
standards
requirements
, including any freeze protection and temperature
related damage standards.
3. A manufacturer's installation
requirements.
3.
4.
All
other applicable federal, state and local laws.
H. Contractors who fail to meet safety, installation
or other prescribed standards or the requirements of section 44-1763 are
subject to disciplinary action under title 32, chapter 10, article 3.
I. A licensed contractor shall
evaluate and verify the structural integrity of the roof and roofing components
before installing a solar energy device. By installing a solar
energy device, the licensed contractor is deemed to have accepted the surface
of the roof for the purposes of installation and is responsible for repairs to
the roof that are caused by the installation. A contractor who does not comply
with this subsection is subject to disciplinary action under title 32, chapter
10, article 3.
END_STATUTE
Sec. 3. Section 44-1763, Arizona Revised
Statutes, is amended to read:
START_STATUTE
44-1763.
Distributed energy generation system agreements; disclosures;
residential solar energy systems; exception
A. An agreement governing the financing, 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, financing 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 financing, 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. If the
warranty period for any major component is less than the duration of the
agreement, the length of the warranty must be disclosed to and separately acknowledged
by the buyer or lessee
and be written in bold type and
separately initialed by the buyer or lessee
.
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 distributed energy generation system is
being financed or leased, the total number of payments, the payment frequency,
the amount of the payment expressed in dollars and the payment due date.
6. Provide a disclosure in the sale and financing
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, financing or leasing the
distributed energy generation system, including:
(a) The assessed value and the property tax
assessments associated with the distributed energy generation system calculated
in the year the agreement is signed.
(b) Transaction privilege taxes that may be assessed
against the person buying or leasing the distributed energy generation system.
(c) 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,
lease or financing 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. Provide a full and accurate summary of the total
costs under the agreement for maintaining and operating the distributed energy
generation system over the life of the distributed energy generation system,
including financing, maintenance and construction costs related to the
distributed energy generation system
, that must be acknowledged
and INITIALED by the buyer or lessee
.
12. If the agreement contains an estimate of the
buyer's or lessee's future utility charges based on projected utility rates,
provide an estimate of the buyer's or lessee's future utility charges as
impacted by potential utility rate changes ranging from at least a five percent
annual decrease to at least a five percent annual increase from current utility
costs applied to the duration of the agreement in one percent
increments. Any comparative estimates must be calculated by applying
the entire rate change range to the duration of the agreement.
The
agreement must substantiate the methodology that was used to calculate the
utility charges and comparative estimates.
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.
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. If a document or sales presentation relating to a
distributed energy generation system contains financial savings comparative
estimates or utility rate comparative estimates, the document or sales
presentation must include historical utility rates for the immediately
preceding period of time that is of the same duration as the proposed financing
or lease period for the same class of utility customer in the same utility
service territory as the prospective buyer or lessee. These historical
rates must be included in any comparative estimates.
The
agreement must substantiate the METHODOLOGY that was used to calculate
financial savings or utility rate comparative estimates.
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. If a document or sales presentation relating to a
distributed energy generation system contains an estimate of the buyer's or
lessee's future utility charges based on projected utility rates, the document
or sales presentation must contain an estimate of the buyer's or lessee's
future utility charges as impacted by potential utility rate changes ranging
from at least a five percent annual decrease to at least a five percent annual
increase from current utility costs applied to the duration of an agreement for
the financing, sale or lease of a distributed energy generation system in one
percent increments. Any comparative estimates must be calculated by
applying the entire rate change range to the duration of the agreement.
THE agreement must substantiate the methodology that was
used to estimate the utility charges based on utility rates.
F. Recurring payments under a distributed energy
generation system lease may not begin until the distributed energy generation
system is
approved by a local utility,
energized and
interconnected.
G. 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 it is determined by the
registrar of contractors that the roofing 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 during the
term of the purchase or lease agreement is 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.
H.
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.
END_STATUTE