SB440 - Revises provisions relating to electricity. (BDR 10-950)

- 83rd Session (2025) Senate Bill No. 440–Committee on Commerce and Labor CHAPTER.......... AN ACT relating to electricity; establishing a process by which a unit’s owner in certain unit-owners’ associations may submit a request to install a distributed generation system; establishing certain powers and duties of certain unit-owners’ associations with respect to the installation of distributed generation systems; establishing and revising certain requirements for the contents of an agreement for the purchase or lease of a distributed generation system and a power purchase agreement; imposing certain requirements upon a solar installation company; revising provisions relating to net metering systems; and providing other matters properly relating thereto. Legislative Counsel’s Digest: Existing law imposes certain requirements on solar installation companies that sell and install distributed generation systems in this State. Existing law prescribes certain contractual requirements for an agreement for the purchase or lease of a distributed generation system and a power purchase agreement. (NRS 598.9801- 598.9822) Sections 14.1-14.3 and 14.5 of this bill define certain terms for the purposes of these provisions governing such agreements. Section 14.4 of this bill makes a power purchase agreement voidable by the host customer for a certain period if the solar installation company that is a party to the agreement does not hold the proper contractor’s license or is not acting within the monetary limit of that license. Section 21.5 of this bill makes a conforming change so that the provisions of sections 14.1-14.4 are enforced in the same manner as other provisions governing solar installation companies and distributed generation systems. Sections 15-20 of this bill require an agreement for the lease or purchase of a distributed generation system, a power purchase agreement and the cover page for such agreements to: (1) contain certain disclosures concerning the solar installation company; (2) provide certain information about the parts of the distributed generation system; and (3) impose certain duties and liabilities on lessees, purchasers and host customers. Existing law requires a solar installation company to maintain a recording of certain communications with a purchaser, lessee or host customer for not less than 4 years after the final inspection of the distributed generation system of the purchaser, lessee or host customer. (NRS 598.98213) Section 21 of this bill requires the solar installation company to provide a copy of that recording within 10 business days after receipt of a request from the purchaser, lessee, host customer, distributed generation system financier, Attorney General, Division of Financial Institutions of the Department of Business and Industry, State Contractors’ Board, Housing Division of the Department of Business and Industry or a law enforcement agency. If the solar installation company fails to do so, the lease or purchase agreement or power purchase agreement is voidable by the purchaser, lessee or host customer. Section 21 also requires a solar installation company to submit proof to the purchaser, lessee or host customer that the solar installation company is properly licensed before the commencement of the installation of a distributed generation system. – 2 – - 83rd Session (2025) Existing law sets forth a prohibition against covenants, restrictions or conditions contained in deeds, contracts or other legal instruments which prohibit or unreasonably restrict an owner of a property from using a system for obtaining solar energy on his or her property. (NRS 111.239, 278.0208) Section 13.3 of this bill sets forth a process by which a unit’s owner in a unit-owners’ association whose governing documents authorize the association to impose restrictions on architectural improvements may submit a request to install a distributed generation system. Section 13.3 prohibits such a unit’s owner from installing a distributed generation system unless the association approves the request. Section 13.7 of this bill authorizes an association whose governing documents authorize the association to impose restrictions on architectural improvements to adopt rules and regulations concerning the installation of a distributed generation system and sets forth the required and authorized contents of such rules and regulations. Under section 13.3, if such an association has not adopted such rules and regulations, the association is prohibited from denying the request of a unit’s owner to install a distributed generation system or imposing conditions upon the installation. Section 13.7 additionally prohibits certain activities of an association with respect to certain accessories for a distributed generation system. Existing law sets forth various requirements for: (1) net metering, which is defined under existing law to mean the measure of the difference between the electricity supplied by an electric utility and the electricity generated by a customer-generator that is fed back to the utility; and (2) a net metering system, which is defined under existing law to mean, in general, certain facilities or systems for the generation of electricity, including a facility or energy system installed on the premises of a customer-generator that uses solar energy to generate electricity and meets certain other requirements. (NRS 704.766-704.776) Section 25 of this bill imposes certain timing requirements upon a public utility for the carrying out of certain requests relating to a net metering system submitted by a customer- generator. Section 28 of this bill requires the regulations adopted by the Public Utilities Commission of Nevada relating to net metering tariffs and standard net metering contracts to set forth procedures and requirements concerning the process for applying for and installing a net metering system, which must include: (1) reasonable and appropriate timelines for the process; and (2) the requirement for a utility that denies the application of a net metering applicant to provide to the net metering applicant a notice detailing the reasons for the denial. Existing law: (1) requires a net metering system to meet certain safety and quality standards; and (2) if the net metering system meets those standards, prohibits a utility from requiring the customer-generator to comply with additional standards or requirements or take certain other actions solely because of his or her status as a customer-generator. (NRS 704.774) Section 29 of this bill additionally requires a customer-generator to obtain all necessary permits and approvals required by any governmental entity for the installation of his or her net metering system and install the net metering system in compliance with the permits and approvals. Under section 29, a utility is prohibited from imposing various additional requirements if the customer-generator satisfies such requirements and the net metering system complies with the safety standards set forth under existing law. – 3 – - 83rd Session (2025) EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted. THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS: Sections 1-12. (Deleted by amendment.) Sec. 13. Chapter 116 of NRS is hereby amended by adding thereto the provisions set forth as sections 13.3 and 13.7 of this act. Sec. 13.3. 1. A unit’s owner in an association whose governing documents authorize the association to impose restrictions on architectural improvements who wishes to install a distributed generation system within such physical portion of the common-interest community as that owner has a right to occupy and use exclusively may submit a request to the association in accordance with any applicable procedures set forth in the governing documents of the association. The unit’s owner shall not install the distributed generation system unless the association has approved the request. 2. An association that has adopted rules and regulations governing the installation of a distributed generation system pursuant to section 13.7 of this act shall approve or deny the request within 35 days after the receipt of the request. If the association denies the request, the association shall provide the unit’s owner a notice that details the reasons for the denial, which must be based on the rules and regulations adopted by the association pursuant to section 13.7 of this act. If the association fails to approve or deny the request within 35 days after the receipt of the request, the request shall be deemed to be approved. 3. If a unit’s owner whose request to install a distributed generation system was denied pursuant to subsection 2 subsequently resubmits the request and addresses the reasons for the denial of the initial request, the association shall approve or deny the request within 15 days after the receipt of the request. If the association denies the request, the association shall provide the unit’s owner notice that details the reasons for the denial, which must be based on the rules and regulations adopted by the association pursuant to section 13.7 of this act. If the association fails to approve or deny the request within 15 days after the receipt of the request, the request shall be deemed to be approved. 4. An association that has not adopted rules and regulations governing the installation of a distributed generation system pursuant to section 13.7 of this act that receives a request submitted pursuant to subsection 1 shall approve the request – 4 – - 83rd Session (2025) within 15 days after the receipt of the request. The association shall not deny the request or impose any conditions upon the installation of the distributed generation system. 5. If an association has adopted rules and regulations governing the installation of a distributed generation system pursuant to section 13.7 of this act, the association and each unit’s owner shall comply with the rules and regulations. 6. As used in this section, “distributed generation system” has the meaning ascribed to it in NRS 598.9804. Sec. 13.7. 1. An association whose governing documents authorize the association to impose restrictions on architectural improvements may adopt rules and regulations governing the installation of distributed generation systems that comply with the provisions of this section. 2. If an association adopts rules and regulations governing the installation of distributed generation systems pursuant to subsection 1, the rules and regulations must: (a) Not conflict with the provisions of the National Electric Code, any local ordinance or any state law or regulation. The provisions of the rules and regulations do not apply to the extent of any such conflict. (b) Require the solar installation company that will install the distributed generation system to be properly licensed. (c) Not require a unit’s owner to comply with any provision of the rules and regulations adopted pursuant to paragraphs (a) and (b) of subsection 3 if the costs of complying with the provision exceeds 3 percent of the cash cost of the installation of the distributed generation system. A unit’s owner may demonstrate that the costs of complying with the provision exceed 3 percent of the cash cost of the installation of the distributed generation system by delivering to the association a written estimate that: (1) Is prepared by a solar installation company that is properly licensed pursuant to chapter 624 of NRS and is not affiliated with either the unit’s owner or the association; (2) Is dated not more than 60 days before delivery of the written estimate to the association; (3) Itemizes all costs of complying with the provision, including, without limitation, labor, materials, professional fees, permit fees, inspection fees, financing charges and the costs of change orders; and (4) Shows that the costs of complying with the provision exceed 3 percent of the contract price for the installation of the distributed generation system. – 5 – - 83rd Session (2025) 3. Except as otherwise provided in paragraphs (a) and (c) of subsection 2, in addition to the requirements set forth in subsection 2, if an association adopts rules and regulations governing the installation of a distributed generation system pursuant to subsection 1, the rules and regulations may require a unit’s owner to: (a) Install the solar panels of the distributed generation system in a manner so that they do not face a street, so long as complying with this requirement does not result in a decrease in the production of the distributed generation system of more than 10 percent, as determined using the PVWatts Calculator maintained by the National Renewable Energy Laboratory of the United States Department of Energy. (b) Paint all conduits of the distributed generation system to match the exterior of the unit to which the system is affixed. (c) Store all batteries for the distributed generation system in a garage. (d) Place all inverters of the distributed generation system outside of any street and reasonably out of view of other unit’s owners. (e) If the distributed generation system will be installed on a roof or other exterior portion of a unit for which the association is responsible for the maintenance, repair or replacement, enter into an agreement with the association setting forth the respective rights and obligations of the unit’s owner and the association with respect to the distributed generation system. The association may require the agreement to be recorded and to include provisions in the agreement which: (1) Provide that the unit’s owner is solely responsible for any damage caused to the roof or exterior portion that is caused by the installation, maintenance, repair or replacement of the distributed generation system. (2) Require the unit’s owner, at his or her expense, to remove the distributed generation system from the roof or exterior portion if the association determines such action to be necessary for the maintenance, repair or replacement of the roof or exterior portion. (3) Authorize the association to cause the distributed generation system to be removed from the roof or exterior portion if, after reasonable notice has been provided to the unit’s owner, the unit’s owner fails to remove the distributed generation system as required pursuant to subparagraph (2) and assess the costs of – 6 – - 83rd Session (2025) the removal, relocation, storage and rep [Text truncated for display. Full text available on LegiScan.]