Spotlight shines on need for consumer protections in solar industry
Residential rooftop solar customers need to better educate themselves on the economics of entering into long-term solar leasing agreements in order to protect their investment.
As the rooftop solar industry continues to experience significant growth, with more than 1.3 million solar installations across the nation, consumer protection issues in the sector have drawn increased examination.
“It is a broad concern across our consumer advocates, that customers not be misled, that contracting be standardized, that consumers be given good information to make decisions on,” David Springe, executive director of the National Association of State Utility Consumer Advocates (NASUCA), said in an interview with Daily Energy Insider.
The NASUCA is a group of consumer advocates that represent utility consumers before state and federal regulators and in the courts.
The need for consumer protections was highlighted this week after the New York Times reported that SolarCity, the nation’s largest installer of rooftop solar panels, reached long-term lease agreements with homeowners shortly before or after they defaulted on mortgages.
The dozens of cases in recent years raise questions about how well the company vets customers, the article said.
Solar companies often pay most or all of the bill for the installation of solar panels and charge customers a rate for the electricity the panels produce. In return, the solar companies receive monthly payments.
SolarCity has lowered the credit score it requires of a customer in order to get its solar panels in the time since the company was founded in 2006, the New York Times said. Often the score is assessed several months before a solar panel system is installed, a period when the financial circumstances of a customer might change.
While not commenting on Solar City specifically, Springe of NASUCA said solar customers need to be better informed about potential pitfalls.
“I don’t think customers are being informed that there are processes actively in play that can change the rates and the rate structures and the economics of the solar panels,” Springe said.
Tensions have erupted in Arizona, Nevada and other states across the country that have implemented net metering and solar policy reforms, decisions that have directly impacted rooftop solar customers.
“You have a lot of customers who are very invested in this technology who are very angry because they feel like you have taken away something that they are entitled to,” Springe said. “They aren’t entitled to it, but they don’t know that.”
Often customer complaints regarding rooftop solar involve companies misrepresenting the predictions of what energy savings will be or misleading advertising.
The Solar Energy Industries Association (SEIA) is one organization that is working to bolster consumer protections in the solar industry.
SEIA demands that its nearly 1,000 member companies follow its Solar Business Code, which dictates proper interactions with customers.
It also has worked to improve transparency and clarity in solar transactions with disclosure forms that highlight key terms of contracts and help consumers compare different offers from solar companies. In addition, SEIA offers a solar customer resource portal on its web site.
Among other consumer education groups, the Interstate Renewable Energy Council provides a “Be Solar Smart Consumer Checklist” and other consumer protection documents.
Meanwhile, the Federal Trade Commission as well as several state governments are considering or have considered consumer protection laws for the solar industry.
