During the 2025 regular legislative session, Texas enacted the Residential Solar Retailer Regulatory Act (RSRRA), found in Occupations Code, Chapter 1806. Under the RSRRA, Texas Department of Licensing and Regulation (TDLR) has authority to regulate certain aspects of the sale and lease of residential solar energy systems, including most solar panels and solar shingles.
Exemptions exist for Systems installed on multifamily buildings with four or more dwelling units or stories, systems installed on nonresidential property, systems intended only for temporary or emergency use, to power a single appliance, and certain small systems that generate less than one-kilowatt of peak output power in the aggregate. Under the Act, TDLR does not regulate power purchase agreements. In a power purchase agreement, the consumer does not buy or lease the solar panels, but permits panels to be installed on consumer’s property and agrees to purchase the electricity generated.
TDLR already regulates the installation of solar energy systems by electricians and electrical contractors under the Texas Electrical Safety and Licensing Act. Although electrical contractors and their employees will be exempt from having to register as solar retailers or salespersons, they will be required to comply with most provisions of RSRRA and related rules adopted by the Commission.
Starting September 1, 2025, sales and lease contracts for residential solar energy systems must contain certain contract provisions and disclosures, and must provide a five-day right-to-cancel the transaction. Also, starting September 1, 2025, TDLR may enact rules for solar retailers and salespersons, may establish a code of conduct for the industry, and may require that certain educational materials be provided to consumers. Once adopted, the rules, code of conduct, and educational materials will be published to TDLR’s solar program website.
Starting September 1, 2026, individuals selling or leasing most residential solar energy systems, and the companies for which they work, will be required to obtain a registration from TDLR. Additionally, certain specific statutory provisions concerning deceptive and misleading practices and penalty enhancements will go into effect.
What This Means for Electrical Contractors
Although Texas licensed electrical contractors who engage in residential solar retail sales, along with their employees, will be exempt from the new solar registration and insurance requirements, they are subject to most other requirements of the Act and, under Sec. 1806.208 of the Act, may be subject to disciplinary action for violations of the Act or program rules.
- Effective September 1, 2025, key provisions these electrical contractors must follow include: Sec. 1806.155 Required Contract Provisions
- Sec. 1806.156 Right to Cancel Agreement
See below for details on the required contract provisions and right to cancel agreement. All Texas licensed electrical contractors who engage in residential solar retail sales should include these requirements in their residential solar contracts beginning September 1, 2025.
Required Contract Provisions
If the sale or lease of residential solar energy system involves the installation of the system at a person’s residence, the sale or lease agreement must:
- Provide that the installation of the residential solar energy system will be performed by a licensed electrical contractor.
- Conspicuously state the name and license number of the electrical contractor who will perform the installation. This requirement may be satisfied by providing a list of electrical contractors in the agreement from which one must be selected to perform the installation.
- Provide that the solar retailer or electrical contractor, as applicable, will obtain:
- any permit required by a government entity for the installation
- if Section 39.554 or 39.916, Utilities Code, applies, the approval by the electric utility serving the person’s residence of the interconnection of the residential solar energy system; and
- if the person is a customer of an electric cooperative or a municipally owned utility, the cooperative’s or utility’s approval of the interconnection of the residential solar energy system.
Third-party lenders
If the sale or lease of a residential solar energy system involves a third-party lender that is affiliated with or referred by the solar retailer, the agreement must include a provision requiring the third-party lender to cancel any accompanying loan made by the third-party lender to the buyer or lessee upon cancellation of the agreement.
Right-to-cancel
A solar contract must allow a buyer or lessee to cancel the agreement without penalty or further obligation by providing written notice of the cancellation on or before the fifth business day after the date on which the agreement was executed by the buyer or lessee.
A solar retailer must include in an agreement for the sale or lease of a residential solar energy system the last calendar date of the cancellation period and the mailing address or e-mail address for providing the notice of cancellation.
If the agreement does not contain the required address for cancellation, the buyer or lessee may cancel the agreement by providing written notice of cancellation to the solar retailer by any reasonable method.
Duty to Supervise
Under Sec. 1806.152 of the Act, an electrical contractor whose employees sell or lease solar energy systems must exercise reasonable supervision over the employees to ensure that they follow the requirements of the RSRRA and program rules.
Compliance with Other Law
Under Sec. 1806.153, the electrical contractor must comply with any Code of Conduct adopted by the department and with other consumer protection laws, including the federal Truth-in-Lending-Act, the state Deceptive Trade Practices—Consumer Protection Act (Business & Commerece Code, Chapter 17) and the provisions of Business & Commerce Code, Chapter 115 (which pertain to certain solar transactions).
Stakeholder Workgroup
TDLR is establishing a stakeholder workgroup made up of business, consumer and government members – including a Texas licensed electrical contractor – to provide advice and recommendations on the residential solar retailer program and rules in preparation for June 1, 2026, when rules must be adopted, and Sept. 1, 2026, when residential solar retailers and solar salespersons must be registered with TDLR. Licensing applications will be available in advance of this date. We will send out a link to applications for the workgroup soon. Please sign up for email updates so you will receive information about the Residential Solar Retailers program.
Note:
- TDLR can begin accepting consumer complaints against residential solar retailers for contracts entered into starting on or after Sept. 1, 2025. For incidents involving residential solar retailers occurring before Sept. 1, 2025, consumers should file a complaint with the Texas Attorney General’s Office of Consumer Protection.
- TDLR can accept complaints against electrical contractors for work they performed at any time when installing or repairing solar panels.
For more information, visit the Residential Solar Retailers homepage.