Are solar companies ripping you off? –Mother Jones

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Solar panels on the roof of a house in Apache Junction, Arizona.Darryl Webb/AP

Last December, a group of Republican congressmen from Arizona and Texas sent a concerned letter to the Federal Trade Commission. According to the letter, solar panel companies could use deceptive marketing practices to lease their rooftop systems to homeowners without fully disclosing the financial risks. The concerns were similar to those raised a month earlier by Democratic lawmakers – also from Arizona and Texas – in a letter sent to the Federal Consumer Financial Protection Bureau.

Both letters raised the specter of serious problems in the business model of the country’s fastest growing energy source. But as the Arizona Center for Investigative Reporting revealed last month, the Republicans’ letter was originally written by an employee of the Arizona Public Service, the state’s largest electric utility and a longtime opponent of third-party solar companies. The draft was forwarded by APS to the office of Representative Paul Gosar (R), who made some changes, obtained the congressman’s signature and sent it, according to the AZCIR report. (The letter is here; highlights were added by AZCIR to show where changes were made from the original APS draft.)

This isn’t the first time APS has engaged in this type of covert advocacy to undermine solar power, a booming industry that poses an existential threat to old-school utility bottom lines. In 2013, the company presented itself as supporting two secretive nonprofit organizations that ran an aggressive anti-sunscreen ad campaign in the state. At the time, the company’s focus was net metering, the policy that requires utility companies to purchase excess electricity generated by its customers’ rooftop panels. Now, APS’s focus appears to have shifted to the marketing practices of companies that rent solar panels to homeowners.

Solar leasing “may pose significant risk” to U.S. consumers, lawmakers say in a letter to the FTC.

“This is the next evolution in the utility playbook,” said Susan Glick, spokeswoman for the Alliance for Solar Choice, an advocacy group that represents some of the nation’s largest solar companies. APS wants to “demonize rooftop solar and make sure they have a monopoly,” she said.

The cost of rooftop solar systems has dropped in recent years. But some solar companies have realized that many homeowners are still unable to pay north of $10,000 to buy and install panels. Instead, the trendy option is solar rental: a company installs panels on your roof for free, then charges you a monthly fee for the electricity they produce, which in theory is less than what you paid your electric utility. A recent industry survey found that about half of all residential solar systems are rented rather than owned.

A spokesperson for Rep. Ann Kirkpatrick (D) — one of the Democratic letter’s authors — told Climate Desk that Kirkpatrick wanted to “take the lead” on the letter to the CFPB “after receiving numerous complaints about solar rooftop rental practices in Arizona.” The spokesperson added that ‘any suggestion that the MP published the letter due to coercion from public services is false.’

The letter drafted by the APS from Gosar and his GOP colleagues was more specific. He alleged that, in their rush to sign up customers before a federal tax credit expires, solar leasing companies have overestimated the savings homeowners will receive. Neither Gosar’s office nor APS returned requests for comment.

The two letters drew parallels between solar leasing and the subprime mortgage crisis, in which financial firms used shady lending practices to lure homebuyers into mortgages they couldn’t. really afford.

It has been a few months now since the letters were sent, and the response from federal authorities has been mixed. On January 12, the CFPB replied to Kirkpatrick and his peers, writing that the agency is “currently investigating a number of overlapping issues that may involve the rental of rooftop panels.” A CFPB spokesperson declined to elaborate on what exactly those issues are and whether those investigations were triggered by Kirkpatrick’s letter. An FTC spokesperson said the agency has not yet taken any action on solar rental. Back in Arizona last month, the state Corporation Commission opened a role to gather preliminary information about the solar rental, with the possibility of further investigation in the future, a spokesperson said.

The GOP letter was “almost undoubtedly a politically motivated attack,” says NRDC’s Nathanael Green.

So, is congressional incitement justified, or is it just glorified lobbying for a panicked utility company? Despite all the noise, actual complaints against solar leasing companies seem to be relatively rare. According to the AZCIR report, Gosar’s chief of staff said he hadn’t actually seen any complaints, and a spokesperson for Kirkpatrick “refused to answer questions about the amount of reports, how whose reports have reached their office, or to confirm that they have investigated any consumer complaints.” The company’s commission file currently contains only one complaintfrom a Scottsdale resident who claimed that “uneducated residents are being suckered into these programs by unscrupulous corporations looking to make a quick buck.”

That was basically the complaint in another 2013 court case against SunRun, a major solar leasing company, brought by a California man who claimed he was misled about cost savings. SunRun denied the allegation, and that claim has since been dropped, the man’s law firm said. And one a little of media reported cases of landlords finding it more difficult than expected to sell homes tied to a solar lease.

But Travis Lowder, an energy finance analyst at the Department of Energy’s National Renewable Energy Lab, said such complaints tend to be rare, isolated incidents that don’t reflect systemic flaws in the rental business model. solar. Lowder leads a team that has spent the past few years developing standardized contracts and practices for solar rental companies.

“The solar industry has been very proactive about consumer protection laws,” Lowder said. “They don’t want to put the consumer in a position where the consumer is going to default, because they need that cash flow” to support the high upfront costs of solar installations on other rooftops.

The biggest problem, Lowder said, is the long life of a typical solar lease: 20 years. On this timescale, a solar lease ultimately equates to thousands of dollars in debt incurred by landlords. Additionally, most rental agreements include terms that gradually increase the monthly fee paid by landlords over time. The argument for customers is that the solar charge rate will increase less than the cost of grid electricity. (Over the past decade, the average cost of electricity nationwide increased by 36%.) The problem is that it’s nearly impossible to make rock-solid predictions about cost savings that far in advance. Unforeseen changes in U.S. energy policy or a customer’s local electricity market, for example, could potentially reduce savings from on-grid solar while homeowners remain locked into their utility contracts. ‘origin.

Energy investors and analysts perform these predictive calculations constantly, but always with a number of assumptions about future market conditions and an appreciation of the inherent uncertainty. The challenge, then, is to communicate this uncertainty to customers.

Solar leases “are certainly not without risk,” said Nathanael Green, a renewable energy policy analyst at the Natural Resources Defense Council. Still, he said, the APS agitation is “almost undoubtedly a politically motivated attack.”

“That’s not to say it’s all nonsense,” Green added. “You have to separate some nonsense from the real stuff that we can do a better job of.”

Regardless, state and federal courts and regulators will now have a chance to intervene. Because Arizona is one of the largest solar markets in the country, with a colorful history of disputes between incumbent power companies and their renewable rivals, the outcome could set the stage. for how solar rental is treated elsewhere.

Nicholas Mack, general counsel for solar finance firm Clean Power Finance, worked with NREL on developing best practices for solar leasing. The solar industry will be ready if the government knocks on the door, he said: “I think we can withstand the scrutiny.”

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