California Leads the Charge in Renewable Energy with this Assembly Bill
California is a national leader in solar energy, and Assembly Bill 2143 known as AB 2143 reinforces this commitment. This recent legislative update, effective January 1, 2024, requires prevailing wages for all construction workers and apprentices involved in installing non-residential solar energy systems exceeding 15 kW that connect to the grid under net energy metering (NEM) agreements. In this comprehensive guide, we’ll delve into the nuances of the bill, offering actionable insights to navigate prevailing wage requirements effectively.
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Table of Contents
- California Leads the Charge in Renewable Energy with this Assembly Bill
- Understanding AB 2143: Who and What Does it Apply To?
- Complying with AB 2143: Your Responsibilities as a Contractor
- Embracing AB 2143: Building a Sustainable Future
- Taking Action: How to Comply with AB 2143
- FAQ About California Assembly Bill 2143
Understanding AB 2143: Who and What Does it Apply To?
Not all solar projects fall under the bill. Here’s a quick breakdown:
- Applies to: the Construction of large, non-residential solar photovoltaic (PV) systems (>15 kW) connected to the grid under NEM agreements.
- Does not apply to: Residential solar installations (15 kW or less), existing public works projects, or facilities serving modular homes or low-rise multiunit housing.
Deadlines to Remember
- January 1, 2024: The official enforcement date of the Assembly Bill.
- Interconnection Application Crucial: The California Public Utilities Commission (CPUC) considers the interconnection application submission date to determine a project’s eligibility for the bill. Applications submitted before 2024 are exempt, even if construction continues into the new year. However, rejections or significant modifications to the application can reset the start date.
Complying with AB 2143: Your Responsibilities as a Contractor
Pay Prevailing Wages
Ensure all construction workers and registered apprentices involved in the project receive prevailing wages and benefits as determined by the California Department of Industrial Relations (DIR). Learn more about Prevailing Wage Best Practices.
Maintain Payroll Records
Keep detailed payroll and human resources records. Make them readily available for state inspection to verify compliance. Tracking and reporting software can assist with this process.
Submit Payroll Records Electronically
Twice a year, submit certified payroll records for workers on qualifying projects to the CPUC through the CPUC Solar-Utilities Reporting, Guidance, and Education (SURGE) website.
Potential Consequences of Non-Compliance
Failure to comply with the bill can lead to serious repercussions, including:
- Wage Assessments and Penalties: The state may impose financial penalties for non-payment of prevailing wages.
- Disqualification from NEM: Non-compliant projects may lose eligibility for net energy metering benefits, significantly impacting project economics.
Embracing AB 2143: Building a Sustainable Future
While the bill may add new considerations, it ultimately contributes to a stronger solar workforce in California. Here’s how:
Fair Wages Attract Skilled Labor
Paying prevailing wages helps attract and retain qualified workers, crucial for meeting California’s ambitious clean energy goals.
Standardization and Transparency
Prevailing wage requirements bring consistency and transparency to the solar industry, benefitting both workers and businesses.
Taking Action: How to Comply with AB 2143
Here are some proactive steps for payroll managers and office personnel to ensure a smooth transition under the bill, facilitating regulatory compliance.
Familiarize Yourself with Prevailing Wage Rates
Regularly check the DIR website for the latest prevailing wage rates for relevant job classifications in your area.
Partner with a Qualified Solar Contractor
Choose a contractor experienced with AB 2143 compliance and has a strong track record of responsible labor practices.
Open Communication with Project Owners
Maintain clear communication with project owners regarding potential cost changes due to prevailing wage requirements.
Understand the Compliance Requirements
This bill represents a significant step forward for California’s solar industry. By understanding the law’s requirements and taking proactive steps, construction companies can ensure compliance while contributing to a sustainable future powered by clean energy.
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FAQ About California Assembly Bill 2143
How much will prevailing wages increase project costs?
The impact of the bill on project costs varies. Many California solar companies already offer competitive wages close to prevailing rates. For larger projects, labor costs may be a smaller portion of the overall budget. It’s wise to consult with a qualified solar contractor familiar with Assembly Bill 2143’s potential cost implications for your specific project.
What are the penalties for non-compliance with AB 2143?
Failure to comply with the bill can result in penalties from the state, including citations and financial assessments for unpaid prevailing wages. More importantly, non-compliant projects may lose eligibility for net energy metering benefits, significantly impacting project economics.
Does Assembly Bill 2143 apply to battery storage systems co-located with solar panels?
Yes, the bill applies to any associated battery storage system installed with a qualifying solar PV system exceeding 15 kW and connected under net metering agreements. All construction workers involved in installing the battery storage system would also be subject to prevailing wage requirements.
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The material presented here is educational in nature and is not intended to be, nor should be relied upon, as legal or financial advice. Please consult with an attorney or financial professional for advice.
