Texas Commission set to regulate residential solar energy system contracts under new law

Texas Senate Bill 1036, introduced on January 31, 2025, aims to enhance consumer protections in the residential solar energy market. The bill establishes a framework for regulating the sale and lease of solar energy systems, addressing concerns over potential violations and ensuring accountability among contractors.

Key provisions of the bill include the authority for the executive director to issue warning letters and cease and desist orders to protect public health and safety. It also outlines civil penalties for violations, with fines capped at $2,500 per incident and $50,000 for similar violations. Notably, if individuals over the age of 55 are harmed, penalties can increase to $10,000 per violation and $100,000 in total.

The bill also allows for the cancellation of contracts for solar energy systems if violations are found, mandating refunds to consumers. This provision is particularly significant as it empowers consumers to seek recourse in cases of misconduct, reinforcing trust in the solar market.

Debate surrounding SB 1036 has focused on its potential impact on the solar industry and the balance between consumer protection and regulatory burden. Supporters argue that the bill is essential for safeguarding consumers, especially vulnerable populations, while opponents express concerns about the implications for small businesses and the potential for increased costs passed on to consumers.

The economic implications of this legislation could be substantial, as it may lead to increased compliance costs for solar contractors, potentially affecting pricing structures in the market. Socially, the bill aims to foster a more transparent and trustworthy environment for consumers considering solar energy options.

As the Texas Commission of Licensing and Regulation prepares to implement the bill by June 1, 2026, stakeholders will be engaged to provide input on the regulatory framework. The outcome of this legislation could set a precedent for how solar energy systems are marketed and sold in Texas, influencing both consumer confidence and industry practices in the years to come.