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Home Improvement Contract Requirements for Solar Jobs

solar install

Business Consumer Alliance is reminding solar contractors in California to make sure to follow California law when it comes to contract requirements for solar projects. Under the Contractors’ State License Law, residential solar installation is considered home improvement and any contract must follow the home improvement contract requirements.

Solar contractors cannot ask for or take a down payment of more than $1,000 or 10 percent of the contract price, whichever is less. According to the law, with the exception of the initial down payment, a contractor may not request or accept payment that exceeds the value of the work already performed or materials already delivered. This means a contractor cannot request or receive payment for installation of solar panels if those panels have not yet been provided or installed. In addition, the contract price and all subsequent progress payments must be stated in the contract in dollars and cents, and all work or services provided that justify the progress payment must be listed.

Here are a few more requirements that solar contractors must follow for residential solar contracts:

  • The solar energy system disclosure document must be included on the front page or cover page of the residential solar energy contract. The disclosure document must include the total cost for the solar energy system, including financing and energy/power costs if applicable; how to file a complaint with the Contractor State License Board (CSLB); and information about your right to cancel the contract (if not negotiated at the contractor’s place of business). A copy of the disclosure is noted below:

 View Solar Disclosure

  • All home improvement salespersons must be registered with the CSLB for any solar contractors they are selling for.
  • The contractor must give the buyer a copy of the contract, signed and dated by both parties, before any work begins. The buyer’s receipt of the copy of the contract initiates their right to cancel within three business days. For contracts entered into on or after January 1, 2021, the buyer’s right to cancel a home improvement contract is five business days for buyers 65 years and older.
  • The contract must include an approximate calendar date of when work will begin and the estimated completion date.

Violations of the home improvement contracting laws can be very costly and may result in the licensee receiving administrative disciplinary action from the CSLB, as well as further legal action. Violators may be referred to a local prosecutor for possible misdemeanor criminal charges for payment violations.

Are you a CA contractor looking for more information related to your license and industry? Reach out to the CSLB at https://cslb.ca.gov/ and check the industry bulletins. You may also call (800) 321-CSLB (2752) or (916) 255-3900. Don’t forget to follow BCA on Facebook for more helpful tips and alerts.

About Business Consumer Alliance Business Consumer Alliance (BCA) is a non-profit company that started in 1928. The broad purpose of BCA is to promote business self-regulation. BCA's mission is achieved by assisting consumers in resolving complaints with businesses and using that complaint information, along with other relevant information such as customer reviews, to forecast business reliability. With community support, BCA can identify trustworthy and ethical businesses and warn the public to avoid unscrupulous businesses whose purpose is to defraud the marketplace. BCA also helps businesses promote themselves by providing services and tools to protect their business and reach out to their customers. BCA obtains its funding from member businesses who support the mission and purpose of the organization and who agree to abide by high standards of ethical business practices.