What Happens to Unlicensed Contractors Who Work On Renewable Energy Projects? Posted on Nov 29, 2017
The laws governing the installation of solar and other cleantech projects, and the potential liabilities for breaking them, vary on a state by state basis. However, many states have similar enforcement schemes to California, which is considered by some to be the strictest.
In California, the consequences of operating without a contractor's license range from a potential sentence of up to six months of jail time, to administrative penalties of up to $15,000 for the first offense, to felony charges and no right to get paid for any of the work performed. In regard to the later, California contractor's licensing laws bar unlicensed contractors from maintaining lawsuits "for the collection of compensation for the performance of any act or contract" for which a license is required "regardless of the merits" of the lawsuit. See Cal. Bus. & Prof. Code § 7031, (a), (c). In general, the severe penalty of denying access to the courts will be enforced despite any resulting harshness or injustice to the unlicensed contractor, and there are only very limited exceptions to the rule that unlicensed contractors cannot sue to get paid for their work. Hydrotech Systems, Ltd. v. Oasis Waterpark 52 Cal.3d 988, 995 (1991). Courts have found this penalty is consistent with the purpose of the licensing law, which is to "protect the public from incompetence and dishonesty in those who provide building and construction services" and to provide "minimal assurance that all persons offering such services in California have the requisite skill and character, understand applicable local laws and codes, and know the rudiments of administering a contracting business." Id. Also, if illegal contracting continues, the penalties become more severe. A second offense results in a mandatory 90-day jail sentence and a fine of 20 percent of the contract price or $5,000.
