Shed light on shady practices
Solar bill should include consumer protections
San Francisco, Santa Monica and Sebastopol have mandated solar installations on new residential construction. A proposal, SB71, in Sacramento would extend this requirement statewide. Although solar mandates might advance clean-energy goals, the legislation also must include protections against deceptive and unethical practices that plague the rooftop-solar industry.
There is nothing novel about wrapping consumer protections around the products the government requires us to purchase. The state regulates automobile insurance that drivers must buy. As a result, California’s auto-insurance market is a model of fair pricing, competitiveness and transparency
The same cannot be said about the solar industry.
Our nonprofit group has received complaints from consumers wooed by solar companies’ big promises of energy and cost savings who are stuck with underpowered systems and loans they cannot repay.
Homeowners who cannot pay up front for a solar system rely on loans, or long-term leases, that place liens on their property. Customers are told that they will be able to pay for it all through their energy savings. Too often, total energy costs go up while home values go down.
A homeowner in San Bernardino County signed up for a 5,000-watt system that the solar company projected would meet 93 percent of his family’s energy needs. He discovered that the system delivers only 3,600 watts, providing less than half of his energy needs at a price greater than the cost charged by his local utility. As energy bills mounted, he could not make payments toward his loan. Now, he fears the solar company will send his loan to a collection agency and ruin his credit.
A Los Angeles homeowner told us her solar installer promised that 99 percent of her energy consumption would be covered by solar panels and other conservation measures. Instead, her rooftop panels provide about half her energy needs. At an 8 percent interest rate, she cannot afford to repay her solar loan. Even worse, after her panels were installed, the solar company informed her that to qualify for future energy rebates she would have to pay an “addendum” that increased the cost of her loan by nearly 20 percent.
Consumers might be surprised to learn that their property taxes go up to make the payments on some solar loans, or that solar leases place a lien on the property that can impair a homeowner’s ability to sell or refinance. Instead of enhancing home values, homeowners have paid solar-financing companies $20,000 to $30,000 to buy out the lease and clear the way for a sale to a buyer who refuses to take over a costly decades-long payment obligation.
These problems do not harm only the families ripped off by shady operators, they tarnish the entire solar industry.
There have been some efforts to police the industry. The Federal Trade Commission penalized aggressive telemarketing lead generators for illegal robocalls. The FTC also penalized companies for duping consumers into believing they were getting legitimate calls about their home-energy bills but instead had their personal information sold to solar companies for marketing purposes. A few state attorneys general have issued consumer alerts about the solar industry.
But the problems haven’t gone away, and California needs to take a stand.
As lawmakers consider rooftop solar requirements for new construction, this is the perfect time to create a framework of consumer protections that will make California a clean-energy model for the nation to follow.