What Contractors Need to Know Texas Solar Contractor Requirements Under SB 1036

ByClean Energy Fund of Texas Team

If you sell or install residential solar in Texas, your compliance obligations changed in September 2025 and they are about to change again.

Senate Bill 1036, passed during the 89th Texas Legislature and authored by Senator Judith Zaffirini, created the Residential Solar Retailers program under the Texas Department of Licensing and Regulation (TDLR). The law came in direct response to a surge in consumer complaints about predatory solar sales practices statewide.

Texas Has New Rules for Solar Sales. Here Is What Contractors Need to Know.

This post breaks down what the law covers, what it means for contractors working in the field, and why it matters for homeowners and communities across Texas.

Why This Law Exists

The numbers behind SB 1036 are stark. Solar panel-related complaints to the Texas Attorney General’s office jumped from 154 in 2020 to 696 in 2024, a 350 percent increase. The Better Business Bureau reported similar trends, with complaints rising from 166 in 2019 to 1,069 in 2024.

Patrice Parsons, Executive Director of the Texas Solar Energy Society and a member of the TDLR steering committee that helped shape the implementing rules, described the problem at a recent CEFTX webinar: companies were coming into Texas specifically to target vulnerable homeowners, with sales tactics aimed at people 55 and older, people with disabilities, and non-English speakers. Many installers were putting up what she called “solar decorations,” collecting payment, and disappearing before systems were properly commissioned.

The result was an industry taking reputational damage it did not earn across the board. Legitimate contractors were losing business because consumer trust had eroded. Senator Zaffirini stated that the law was filed to address the alarming rise in misleading and predatory tactics that disproportionately harmed elderly and non-English-speaking Texans.

What is Already in Effect

As of September 1, 2025, residential solar retailers in Texas must include required contract provisions and right-to-cancel provisions in all agreements.

Specifically, if a sale or lease involves installation at a customer’s residence, the contract must:

  • State that installation will be performed by a licensed electrical contractor
  • Include the licensed electrical contractor’s name and TDLR license number, displayed clearly
  • Provide the customer a five-business-day right to cancel after signing

Solar retailers are also prohibited from misrepresenting affiliation with a government agency or utility company, and may not solicit at homes displaying “no soliciting” signs.

If a contract is found to be non-compliant, TDLR can order it canceled and require a full refund to the consumer, including any money paid plus costs for associated damage such as roof repairs.

What Takes Effect September 1, 2026

Residential solar retailers and solar salespersons will be required to register with TDLR beginning September 1, 2026.

Here is what that registration structure looks like:

For solar retailers (installers): A registration fee of $350 covers the company. Salespeople employed by a registered retailer can be registered under the company’s fee rather than paying separately.

For independent solar salespersons: A separate registration fee of $56 applies if you sell independently rather than through a registered retailer.

For licensed electrical contractors: Licensed electrical contractors are exempt from the solar retailer registration requirement, but they are still subject to all other requirements under SB 1036. The law still applies to how you sell and contract, even if you hold an existing electrical license.

What Goes on the Disclosure Document

One of the more practical outcomes of the steering committee process is a required disclosure document that must accompany every sale. According to Parsons, the document is designed to be clear and easy to read, and must include:

  • The salesperson’s registration number
  • The installer’s registration number and license information
  • Evidence of the retailer’s required insurance coverage
  • A clear breakdown of costs, including price per kilowatt, expected utility savings, and financing terms

This document is not just a consumer protection tool. It is also how contractors can verify that a company they are doing business with or subcontracting for is properly registered. If a company cannot produce the disclosure document, they may be operating outside the law.

Insurance Requirements

The law sets minimum liability insurance requirements, and existing commercial general liability policies may not be sufficient on their own.

If your current insurance totals do not meet the new thresholds, you may need to add coverage. The key distinction is that the required coverage must specifically protect the consumer in the event of contractor failure, not just the business in general operations. Cal Morton, a licensed electrical contractor who participated in the webinar, raised the question of errors and omissions coverage for situations where a salesperson made a representation that later proved inaccurate. Parsons confirmed that contractors need to be clear with customers upfront about what can and cannot be guaranteed, particularly around utility rate changes and projected savings.

The takeaway: review your current coverage before September 1, 2026, and confirm it meets the new standards.

Continuing Education

Salespeople working their first year under a registered retailer are not required to hold an independent license in year one. Starting in year two, continuing education is required, and the number of hours will increase annually. The full schedule for hours and maximums is still being finalized by TDLR.

If you manage a sales team, plan for this now. Tracking your team’s registration and continuing education requirements early is far easier than scrambling when the deadline arrives.

Penalties for Violations

The law has enforcement teeth. Violations carry dollar fines, and cases involving consumers over 55 carry substantially higher penalties, reflecting the fact that bad actors specifically targeted elderly homeowners.

Criminal conviction provisions cover crimes involving deceit, fraud, theft, burglary, and racketeering. TDLR has its own enforcement department and, for the first time, has the authority to pursue violations in the solar sales space directly.

Detach-and-Reset Work: An Open Question

One issue that came up during the webinar that does not yet have a definitive answer is whether the sales license requirement applies to detach-and-reset work, which is increasingly common as roofing companies encounter solar panels during hail damage repairs.

Cruz Suarez, an installer with more than a decade in the field, described the pattern: insurance companies pay supplements for detach-and-reset work, roofing companies hire unqualified workers to do it, and homeowners end up with systems that are improperly reinstalled and no licensed contractor accountable for the work.

Parsons confirmed that if any kind of sale is being made, a license is required. She also noted that if installation work is being done, an installer license is required regardless of whether it is labeled a reset rather than a new install. She committed to following up with TDLR for a definitive answer on how the rules apply to this specific category of work.

If you are a contractor working in this space, the safest approach is to treat a detach-and-reset the same way you would a new installation from a licensing and documentation standpoint until TDLR provides clarification.

What This Means for Honest Contractors

The contractors who came out most clearly in this conversation were the ones who have been doing things right for years and watching bad actors undercut them.

If your company already operates with integrity, SB 1036 works in your favor. Consumers burned by predatory sales tactics will now look for registered companies. Your TDLR registration number becomes a signal of legitimacy that you can put in front of prospective customers.

Parsons put it plainly: if you know of companies operating without proper licensing, particularly those that sell a job and sub it out to unqualified workers, report them to TDLR. That reporting mechanism now exists. Before SB 1036, there was no direct channel to go after solar sales violations. Now there is.

What Homeowners Should Know

For Texans who are considering solar, the new law gives you concrete things to check before signing anything:

  • Ask to see the salesperson’s registration number and the installer’s license number. Both must be on the disclosure document.
  • You have five business days from the date you sign a contract to cancel it for any reason.
  • No legitimate solar company will imply affiliation with your utility or a government agency.
  • If a company cannot or will not show you proof of insurance and licensing, do not sign.

CEFTX’s SunRise program connects homeowners with vetted contractors through the Trusted Texas Contractor Network, which requires members to maintain BBB standing, demonstrate ethical business practices for a minimum of two years, and provide accurately sized and fairly priced proposals. These standards existed before SB 1036 and align directly with what the new law requires of the broader industry.

Resources

How CEFTX Fits In

Clean Energy Fund of Texas is the state’s first nonprofit green bank. Our mission is to make clean energy accessible to every Texan, regardless of income or credit history. We do that through below-market financing programs like TERRF and SunRise, and through the contractor network that makes those programs work on the ground.

We host webinars like this one because the contractors in our network need practical information to operate, comply with the law, and build businesses that last. SB 1036 is a step toward a healthier industry. The contractors who are already doing quality work, communicating honestly with customers, and meeting licensing requirements have nothing to fear from it and a real competitive advantage to gain.

If you are a licensed solar, HVAC, or weatherization contractor interested in joining the Trusted Texas Contractor Network, visit cleanfundtx.org to learn more.

This post is based on the CEFTX webinar “Protect the Customer, Protect the Deal,” featuring Patrice Parsons, Executive Director of the Texas Solar Energy Society, hosted April 30, 2026. Information reflects the state of SB 1036 rulemaking as of that date. Contractors should consult TDLR directly for the most current registration requirements and deadlines.

Similar Posts