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SB1419 - 572R - H Ver
House Engrossed
Senate Bill
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
and is limited to a system that is used primarily to serve
on-site demand at a residential dwelling unit or multifamily structure
.
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.
(
c
) Does not
include:
(
i
) a utility
scale solar project.
(
ii
) A system
that is installed on a commercial, industrial or institutional structure or a
system that is designed primarily to serve an off-site load.
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
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. If A licensed contractor installs
a solar energy device on a roof, the licensed contractor, before the initial
installation, shall Evaluate the roof and roofing components to determine
whether the roof is capable of supporting the installation and shall Recommend
that the customer obtain an inspection by a licensed roofing contractor. By
installing a solar energy device on a roof, the contractor is deemed to have
accepted the roof surface for purposes of initial installation and is responsible
for repairing any roof damage that is caused by the installation.� This
subsection does not apply to structures that are used primarily for shade,
including shade that is used for vehicles or livestock.� 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.�
For a lease,
if the warranty period for any major component is
less than the duration of the
lease
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 lessee
.�
The warranty periods for a purchased DISTRIBUTED energy generation
system, major COMPONENTS and labor shall be disclosed to and separately
acknowledged by the buyer and be written in bold type and separately initialed
by the buyer.� For the purposes of this paragraph, "major components"
includes:
(
a
) Photovoltaic
solar panels.
(
b
) Inverters.
(
c
) Racking.
(
d
) Battery
energy storage systems.
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.
�
contractor provides credit to purchase
a distributed energy generation system, the contractor shall disclose
information pertaining to the number, amount and timing of payments that are
scheduled to repay the credit obligation. Compliance with 12 code of federal
regulations part 1026 is considered compliance with this section.
6. Provide a disclosure in the sale
and
financing
or lease
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)
(
a
)
Transaction privilege taxes that
may be assessed against the person buying or leasing the distributed energy
generation system.
(c)
(
b
)
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
,
or
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.
at the time the contract is
signed,
provide a
full and accurate
summary of the
total
estimated
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.
12. Provide a disclosure that
notifies the consumer whether and to what extent SYSTEM maintenance and repairs
are included in the agreement and the estimated system maintenance costs that
the consumer is responsible to pay and that is acknowledged and initialed by
the buyer or lessee.
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.
15. include A brief description of
the basis for any savings estimate that was provided to the purchaser at the
time the contract is signed, as applicable. �The brief description must
include, at a minimum, all of the following:
(
a
) Any
applicable utility rates.
(
b
) Any
assumption for an increase in future electricity rates.
(
c
) Any
estimated system production.
(
d
) The status
of utility compensation for exported energy that is generated by the
DISTRIBUTED energy generation system.
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.
must disclose to
what extent system maintenance and repairs are included and estimates for
system maintenance costs that the customer is responsible to pay.
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.
F.
E.
Recurring
payments under a distributed energy generation system lease may not begin until
the distributed energy generation system is
granted permission
to operate by a local utility
and
energized and
interconnected
by the lessor
.
F. 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 roof 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 may be 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.
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