According to the Legislative Budget Board (LBB), SB 1036 has a projected net negative impact of approximately $233,095 to General Revenue over the biennium ending August 31, 2027. While the bill does not appropriate funds, it provides the framework for implementing a new regulatory regime that includes licensing, enforcement, and administrative adjudication for residential solar retailers and salespersons.

To support implementation, the Texas Department of Licensing and Regulation (TDLR) is expected to incur both initial and ongoing costs. These include hiring new staff, updating IT systems, and expanding regulatory capacity. In fiscal year 2026, TDLR would face start-up costs of about $517,801, partly offset by anticipated licensing fee revenue of $313,000. In subsequent years, costs rise to approximately $738,023 annually, with expected revenues of $546,000. This results in a consistent net cost of roughly $192,000 per year.

The bill also places new demands on the State Office of Administrative Hearings (SOAH), which is projected to receive 110 new cases annually related to license denials, penalties, and contract disputes. This necessitates an additional Administrative Law Judge and support staff, along with one-time equipment expenses. Despite the added costs, no significant fiscal impact is expected at the local government level, and the bill is designed to be funded primarily through registration fees. Still, the anticipated shortfall indicates a need for careful monitoring to ensure fiscal sustainability if licensing revenue projections fall short.

SB 1036 presents a comprehensive framework to address a growing consumer protection concern in Texas’s rapidly expanding solar energy market. With Texas now a national leader in solar power generation, the bill responds to documented cases of fraud and abuse by unscrupulous residential solar retailers. It does so by creating a registration regime for both solar retailers and individual salespeople, overseen by the Texas Department of Licensing and Regulation (TDLR), and provides for rulemaking authority, standardized contract language, mandatory disclosures, and enforcement mechanisms, including penalties and cancellation rights.

The bill aligns with the goal of protecting vulnerable consumers—particularly elderly and non-English-speaking residents—from deceptive and coercive sales tactics. Its provisions, such as the five-day cancellation right, the prohibition of unlicensed sales, and enhanced penalties when older individuals are harmed, reflect thoughtful safeguards against abuse. It also attempts to balance market needs by exempting electrical contractors from duplicative regulation and by supporting legitimate solar businesses through a more trusted marketplace.

However, despite its laudable intent, the legislation also significantly expands state regulatory authority. The occupational registration requirements for all residential solar sales activities and the authorization for rulemaking, fee collection, and penalties represent a notable increase in government oversight. This expansion could create barriers to entry for small or independent operators, raising concerns under the liberty principles of free enterprise and limited government. The fiscal note confirms this expansion, projecting ongoing state costs and the need for new personnel and IT infrastructure—costs that may not be fully offset by registration fees.

Given this context, Texas Policy Research recommends lawmakers vote NO on SB 1036 unless amended to narrow its scope and reduce regulatory burdens. Specific recommendations could include exempting low-volume sellers, introducing a tiered registration system, or requiring legislative review of the program’s effectiveness after a set period. With these adjustments, SB 1036 could effectively protect consumers while better aligning with principles of limited government and free enterprise.

• Individual Liberty: The bill introduces mandatory occupational registration for both residential solar retailers and salespeople, restricting individuals from engaging in this line of work without state authorization. While the bill aims to prevent fraud, this constraint on economic participation may limit an individual’s freedom to work and transact voluntarily. That said, it does reinforce consumer liberty by requiring clear disclosures and a five-day cancellation period for contracts, which empowers individuals with better decision-making tools.
• Personal Responsibility: The bill supports personal responsibility by holding solar retailers and salespeople accountable for their practices. It mandates transparency in sales processes, requires proper disclosures, and imposes penalties for misrepresentations. These measures encourage ethical business conduct and personal integrity in contractual dealings.
• Free Enterprise: From a free-market perspective, the bill imposes regulatory barriers that may deter new or small players from entering the solar sales market. Licensing requirements, fees, insurance mandates, and compliance obligations increase the cost and complexity of doing business. This could consolidate market power among larger firms and limit consumer choices—undermining the principle of free enterprise.
• Private Property Rights: The bill does not directly affect private property rights. Homeowners retain full authority to decide whether to install solar systems. However, increasing the cost and narrowing the supply of solar vendors may indirectly affect access to affordable solar solutions for property owners.
• Limited Government: The bill expands the regulatory reach of the Texas Department of Licensing and Regulation (TDLR) into a new sector. It grants the agency rulemaking authority, allows fee collections, and sets up civil and administrative penalties. This significant expansion of state oversight departs from the principle of limited government, especially given the absence of a sunset clause or mandatory legislative review.