Consumer groups are asking the Federal Trade Commission to investigate deceptive practices by fraudulent solar installers that take advantage of customers looking to install solar on their homes. Common practices include misleading marketing, using contracts with confusing language, and false claims to actual energy savings. Consumers should be protected from companies trying to take advantage of the demand for solar.
Watchdog calls on FTC to investigate residential solar power industry
Campaign for Accountability asked the Bureau of Consumer Protection at the Federal Trade Commission (FTC) to open an investigation into companies that offer residential solar panels.
A review of consumer complaints filed with FTC reveals many of these companies have engaged in false and misleading acts in the marketing and sale or lease of solar panels, in apparent violation of the Federal Trade Commission Act.
Read the letter here.
CfA Executive Director Daniel Stevens said, “Solar companies are using misleading sales practices to trick homeowners into buying or leasing solar panels. The FTC has recognized the problem, but has yet to act. The FTC should open an investigation and hold companies that violate the law accountable.”
Last summer, the FTC hosted a public workshop about consumer protection issues in solar energy. Representatives from Consumers Union and the Massachusetts Attorney General’s Office, among others, recounted emerging problems such as contracts that contain confusing wording about energy tax credits, consumers unable to sell or buy homes that have solar panels installed, and false promises of savings on utility bills.
Following the conference, watchdog Public Citizen submitted comments to the FTC urging the commission to ban arbitration clauses in solar contracts. The National Consumer Law Center submitted comments to the Consumer Financial Protection Bureau noting “extensive complaints of false claims as to the savings with such panels and the terms of the leases.”
In the wake of these developments, CfA submitted open records requests to several states and the FTC to examine consumers’ concerns. CfA requested complaints submitted between 2012 and the present pertaining to the sale or leasing of solar panels and their installation on the roofs of customers’ homes.
CfA reviewed more than 1,200 complaints released by the FTC. The complaints reveal a widespread pattern of apparent fraud and abuse by solar companies. Consumers detailed how the companies deceived them about the true costs of installing solar panels, lured them in with low price quotes that later proved to be false, required them to sign confusing contracts, and promised energy savings that failed to materialize.
These tactics appear to violate the Federal Trade Commission Act, which prohibits unfair or deceptive acts or practices in or affecting commerce.
Stevens continued, “Solar companies often seem to target vulnerable populations, leaving seniors and those living on fixed incomes with higher monthly utility costs and loans that often exceed what they can afford to pay, plunging them into debt. The FTC should investigate these nefarious practices and hold violators accountable.”
City of South Miami Tone-Deaf to Affordable Housing Issue
South Miami Electeds Respond From Dais, “I Hate To Burst Your Bubble, But South Miami Is Unaffordable”
SOUTH MIAMI, Fla. – When South Miami residents and businesses presented concerns during a recent commission hearing that the proposed ordinance mandating solar requirements will make South Miami more unaffordable, the Mayor and Vice Mayor refused to address concerns; instead, the commission doubled down on the argument that South Miami was unaffordable.
Mayor Philip Stoddard (1:58:43): “If you build a big house… What does a 5,000 sq. ft. house cost in South Miami? $1.5 – 2 million?”
When residents and local businesses pointed out that the Mayor’s examples continue to ignore affordable homes, the Vice Mayor added:
Vice Mayor Robert Welsh (2:03:36) “The Builders Association of South Florida sent a letter saying this ordinance will make South Miami unaffordable. Well, guess what? We’re unaffordable already… I hate to burst your bubble but South Miami is unaffordable.”
While rising property values are creating an affordable housing crisis, the City of South Miami Commission is attempting to pass an ordinance mandating solar requirements that threatens many of the community they were elected to serve.
The ordinance will mandate up to a $25,000 expense on all new houses, townhouses and many remodels within city limits making South Miami even more unaffordable and unattainable. It is imperative for the South Miami Commission to weigh the legitimate economic concerns of South Miami residents before hastily imposing a poorly thought out mandate for homeowners and home builders to put solar panels on homes in South Miami.
The local chapter of Family Businesses for Affordable Energy (FBAE) raised suggestions of ways to amend the ordinance to account for affordability that the South Miami Commission and Mayor Stoddard have largely ignored. Full letter submitted to the commission is below.
South Miami is already one of the most unaffordable communities in South Florida and city commission’s efforts to mandate solar will make it even more unaffordable. At the very least, residents should be adequately consulted before a mandate is thrust upon them, and should be made aware of the economic, legal, and safety consequences of that mandate.
On Wednesday, July 12th, the Commission will once again bring the ordinance up for a reading and vote.
The South Miami City Commission is trying to move a plan forward that would make their city the first in Florida to mandate all new homes install solar panels or other solar energy collectors and in the process take away the property owner’s rights to what they can and cannot install on their own homes.
Solar Ordinance jeopardizes individual rights of South Miami homeowners
Even though I believe in the clean and green benefits of solar energy, I do not believe the installation of solar devices should be a government-enforced mandate.
But that’s just what the South Miami City Commission will decide on July 12 when they vote on a ordinance that would require solar photovoltaic systems be installed on all newly constructed homes. Older homes would also be subjected to this requirement if more than 50 percent of its square footage is renovated.
Today, there is nothing preventing anyone from stepping up to install solar energy devices on the roof of their new or existing home. In fact, it’s quite the opposite. South Miami Mayor Stoddard and his solar co-op friends are ready to sell to homeowners solar panel systems at a discount. And, there are federal and state tax incentives for those who choose to install solar on a home or business – choose being the key word.
And while the cost of solar is decreasing, it still remains an out-of-reach luxury for many homeowners. Our county is facing an affordable-housing crisis and rising home prices are already shutting out many residents of South Miami. Hospitals, schools, and businesses will have a hard time attracting and retaining employees who will not be able to afford to live in the city where they work.
This isn’t about taking on the power company – and if you’ve read my columns in the past, you know I am not always a fan of Florida Power & Light. It’s about the individual rights of residents in South Miami.
Solar is an emotional choice, not an economic one. For Stoddard, solar is his personal crusade. But this ordinance crosses the line into forced conversion.
So no matter how much they claim the proposed ordinance would “benefit the health, safety, welfare, and resiliency of South Miami and its residents,” I say this proposed ordinance is simply an attempt to strip homeowners of their fundamental rights – and should not even be considered until all of our South Miami elected officials install solar on their own homes, homes they rent out, as well on all city buildings.
Last night the South Miami City Commission delayed voting on the solar mandate because of problems with the ordinance. FBAE is supporting the addition of safety and consumer protections to the ordinance to protect the residents of South Miami.
Consumer Protections Lacking in South Miami Solar Panel Mandate
by Jun 20, 2017|
South Miami Mayor Philip Stoddard and his fellow city commissioners are convinced about two things – first, that their small 12,000 resident town is destined to be flooded by rising sea levels, and second, that their plan to force residents to buy expensive solar systems will somehow prevent the ocean from rising.
Nevermind that the very foundation of Stoddard’s deepest fear is based on questionable, ever-morphing scientific reports that can never seem to agree. Nevermind that sea levels rose in South Florida between 1930 and 1950, then dipped in the intervening years. Nevermind that naturally occuring, perfectly predictable king tides are to blame for virtually all of the current flooding and propaganda photographs touted by environmental activists who earnestly believe South Florida will eventually disappear underwater.
Nevermind all of that, because South Miami’s city commission is going to save the day with a solar panel mandate rammed down resident’s throats without any consumer protections in place, and without any concern for how poor residents can afford it, or the safety of first responders.
The South Miami City Commission has declared their solar mandate “reasonable and necessary because of local climatic, topological, and geological conditions.” The ordinance is due up for a second reading at tonights council meeting, and under city rules, a third reading could be waived, making it effective almost immediately.
Stoddard claims he’s been working on the ordinance for more than a year, but there’s been no public hearings and no public vote on the issue. And some residents aren’t happy about how things are shaping up.
“Housing and rental prices in South Miami are already too expensive. If a landlord is forced to pay $25,000 for solar panels, he’s going to make the renters pay. We need to be passing laws that make it easier for people to live in South Miami, not laws that make it more difficult,” said Rachel Walker, a South Miami resident. “The South Miami government hasn’t done any research about how this will affect the rents of South Miami. The city should be working to make our housing more affordable, not passing laws to make it more expensive.”
Indeed, the costs of solar ownership are one of the biggest reasons why solar hasn’t been widely adopted yet – consumers that do the math find they’ll actually lose money over the long run when they factor in the cost of maintenance, insurance costs, and the loss of efficiency over the lifetime of the panels, which can degrade in power output over the years. Worse, leased solar panels might actually lower the value of a property, according to the Washington Post.
Shady solar companies are starting to give the industry a bad name, by overpromising on performance, and understating the true costs of solar ownership.
But despite all the evidence, Stoddard insists poorer residents in South Miami will somehow experience a lower cost of living.
Read original at: http://thecapitolist.com/consumer-protections-lacking-in-south-miami-solar-panel-mandate/
Family Businesses for Affordable Energy (FBAE) today called on the City of South Miami to add consumer protections and conduct an impact study as part of the city’s new ordinance mandating the installation of rooftop solar collectors on all new residential construction and expansions of existing residences.
The proposed ordinance will be voted on at a public hearing by the city’s Planning and Zoning Board on June 13, 2017 before final approval can be made by the City Commission. This ordinance only “provides minimum specifications for installations, including specifications for the system’s capacity, location, and safety requirements.” The ordinance offers no consumer protections for homeowners when they purchase solar panels and no impact study has been completed to show how the ordinance will affect South Miami.
If the ordinance is passed by the South Miami City Commission, it will be the first city in Florida to mandate the installation on all new residential construction and expansions. This influx of new solar collectors could attract predatory companies seeking to take advantage of the new mandate.
In Florida consumers have seen the effects of fraudulent companies attempting to take advantage of solar customers. In 2013, BlueChip Energy sold units with counterfeit UL markings which produced electricity far below its nameplate generation capacity. After the company was liquidated to pay debts, BlueChip customers were left with no remedy to recoup their losses.
“We support requirements for consumer protections and professional installation of solar,” said Alex Ayers, Executive Director of FBAE, “however, this proposed ordinance does not ensure that to happen. Rushing a new ordinance that will affect every new home through city government in five weeks, without any consideration for consumer protections is dangerous for the residents of South Miami. I encourage the city to take a look at some of the lessons other states have learned the hard way, without adequate protections homeowners are left holding the bag after the scammers have made off with the money.”
In order to avoid more fraudulent cases like BlueChip Energy, FBAE urges the city to conduct an impact study to determine how the ordinance will affect homeowners and to include consumer protections that provide transparency and ensure professional installation of solar panels to protect new homeowners who wish to comply with the proposed ordinance.
More examples of unsafe solar panel installation and fraudulent sales tactics can be found at www.makesolarsafe.com. Family Businesses for Affordable Energy believes the only sustainable way to expand solar is to ensure consumer protections and stringent installation requirements are incorporated in policy.
Family Businesses for Affordable Energy (FBAE) is a network of family businesses across the country supporting policies that lower energy prices for small businesses. Consistently a top cost that family business face is the price of energy, both utility and fuel costs. FBAE supports common sense policy solutions on the federal and state level that reduce the cost of energy for small businesses.
An economist at the American Enterprise Institute is warning Minnesotans of a solar energy scam called community solar gardens. Salespeople prey on potential customers promising them lower energy bills and a sustainable source of power. With these promises in mind, consumers sign agreements to pay $20,000 in advance or $100/month for the next 20 years. Unfortunately for customers, Minnesota’s location is not great for solar power so investors end up paying for less solar energy than it takes to power their homes; and with a contract that is nearly impossible to break, they do so for 25 years.
By Andrew Follett
A conservative economist has said buying timeshares for solar panels is just the next “scam” to fleece environmentally friendly consumers.
Mark Perry, an economist at the conservative American Enterprise Institute, railed against “community solar gardens” in Minnesota where private companies end up pocketing taxpayer subsidies for generating relatively small amounts of green energy.
“As usual, when door-to-door salespeople present you with an offer that sounds too good to be true, and start with a pitch about ‘saving you 11% every month on your electric bill by switching to solar,’ it’s highly likely that it is too good to be true,” Perry wrote in a blog post Sunday.
Solar companies heavily encourage Minnesotans to invest big sums of money into them, but they’re extremely risky and very difficult to resell in the future. These timeshares require investors to pay $20,000 up front or $100 a month for the next 20 years in exchange for slightly lower power bills.
“In reality, it’s more like getting locked into a 20-25 year “investment” that is probably extremely risky and like a vacation timeshare could be very difficult to sell in the future,” Perry wrote.
Perry notes that solar companies are going door to door in Minnesota to sell timeshares to unsuspecting environmentalists. When investors sign on, they get locked into a 25 year-long contract that doesn’t even end up powering their house. Additionally, if the investor moves out of the area, they’re still liable for the money, making exiting the agreement virtually impossible.
The scam isn’t even generating much electricity, as Minnesota isn’t a good location for solar power.
“Of course, you have to ignore the biggest reason not to go solar in Minnesota: the weather and lack of sunlight,” Perry wrote.
Minnesota has 195 policies and incentives offering government assistance to green energy, according to the Database of State Incentives for Renewables & Efficiency. That’s more than any other state with the sole exception of California, which is a sunnier environment far more naturally suited to solar power.
Perry notes that Minnesota’s government offers numerous financial incentives that cause taxpayers to bear much of the costs of installing rooftop solar panels for the scam. These include a state energy rebate, renewable energy credits, property tax exemptions and an exemption from the 7 percent state sales tax.
Most solar subsidies go to residential installations payments called net metering or a 30 percent federal tax credit. These solar subsidies were so lucrative that solar-leasing companies installed rooftop systems, which run at minimum $10,000, at no upfront cost to the consumer.
Solar and wind power get 326 and 69 times more in subsidies than coal, oil, and natural gas, according to 2013 Department of Energy data collected by Forbes. Green energy in the U.S. received $13 billion in subsidies during 2013, compared to $3.4 billion in subsidies for conventional sources of energy and $1.7 billion in subsidies for nuclear, according to data from the federal Energy Information Administration.
Solar subsidies ultimately drive up electricity prices and aren’t viable without taxpayer support, according to a 2015 study by the Massachusetts Institute of Technology.
Even proponents of solar power recognize their reliance on subsidies. Without high net metering and other subsidy payments, rooftop solar “makes no financial sense for a consumer,” Lyndon Rive, CEO of SolarCity, told The New York Times last February.
Scammers are using fake caller ID numbers to try and take advantage of San Diego utility customers by trying to sell them rooftop solar panels. The company is encouraging customers to be on the look out for these calls and to report them to authorities immediately.
SDG&E warns of phone scam using fake caller ID
SAN DIEGO — San Diego Gas & Electric warned customers Thursday of an increase in complaints about phone scammers using the name of the utility in fraudulent calls.
The most recent complaints involved people who identified themselves as being with SDG&E and selling rooftop solar panels, according to the utility.
SDG&E officials said they don’t sell or install private solar panels or work with third party companies to sell or install them on their behalf. The utility also doesn’t initiate contact via email, phone or otherwise to demand immediate payment or ask for personal information, such as bank accounts, social security numbers or other sensitive information.
Making things more confusing for customers, scammers are starting to use technology that fools caller ID systems, so their calls display “San Diego Gas & Electric” and its main customer service number, 800-411-7343, regardless of the actual source of the call.
SDG&E officials said spreading awareness of the latest fraud techniques helps residents from becoming victims.
According to the utility, energy companies nationwide are working with local, state and federal law enforcement agencies to identify and prosecute scammers. People who receive a suspicious call or one that makes them feel uncomfortable should hang up, or not answer it in the first place if possible.
SDG&E encourages anyone who has been a victim of the solar scam to report any loss of money to their local law enforcement agency.
By Alex Ayers
Recently rooftop solar panels have been promoted to Alabama residents as a way for energy consumers to lower their electrical bills, however there are still many risks involved that oftentimes may outweigh the benefits.
Rooftop solar panels have increased in use in recent years, 18 gigawatts of solar photovoltaics were installed between 2008 and 2014 nationwide. At this growth rate rooftop solar will play a part in supplying American consumers with electricity in the future, and Family Businesses for Affordable Energy promotes diverse energy sources because competition helps to keep energy prices affordable.
However, if growth continues before hidden costs are dealt with, it has the potential to have major impacts on the affordability of electricity for family businesses and households.
The largest growth in rooftop solar panels has come from states that mandate the price that consumers are paid to sell excess solar energy back to the grid through a policy known as net-metering. Alabama solar users currently can sell their excess power to their utility company when they are not using all of the generated power themselves at market rates instead of state mandated rates. The rates at which utilities pay consumers for the electricity vary by state, but those states that mandate retail prices shift the cost burden of maintaining the grid away from solar users to non-solar consumers. This increases the cost of electricity on low-income users and renters who cannot afford or are not allowed to install their own rooftop solar panels.
For non-solar consumers in Nevada this means an increase of $600 per year to subsidize rooftop solar users. In states where net-metering is poorly regulated it creates a regressive income transfer from those who cannot afford solar to those who can. For utilities that transfer the costs from households to commercial customers, the increased overhead cost is passed on to the consumer through increased product prices, either way consumers lose out in poorly regulated net-metering schemes.
Alabama has so far successfully stayed away from these regressive policies, buy could see pressure to change in the future.
As rooftop solar becomes more popular, it opens up the market to bad actors that try and take advantage of consumers interested in lowering their electrical bills. For consumers leasing solar panels there are often hidden costs associated with maintenance and upkeep of the panel that are not easily identifiable in the the leasing agreement.
Some companies require lessees to contract with another company to clean and maintain the panels at costs of up to $700 per year. With long-term leases of 15-20 years these requirements significantly increase the payback period of the solar panels. The leases also make moving more difficult as the leaseholder can put a lien on the entire property claiming it is necessary to protect the solar panels. Additionally, installing solar panels can increase the assessed value of the home and therefore increase the property taxes paid by the consumer.
In addition to hidden costs, some bad actors have used solar installations to scam consumers. In 2015 an Arizona judge released more than 1,000 customers from their leases from a predatory company that failed to install nearly three-quarters of the units and withheld state payments owed to customers.
In other states predatory companies can install panels claiming the cost to the homeowner will be significantly lower than buying electricity from the utility company, but when utility rates remain steady, the rates charged by the solar installer increase over time costing the homeowner more than if the panels had never been installed. As solar becomes more popular, stronger consumer protections will be needed to stop predatory companies like these.
Recent improvements in efficiency and decreasing costs of production will make rooftop solar an ever larger producer of electricity in America, however Alabama lawmakers should stay vigilant in future policymaking to ensure that the hidden costs are not shifted to non-solar users, especially low income consumers who cannot afford higher electric bills. Smart policies can protect all consumers and help make energy more affordable.
Alex Ayers is the executive director of Family Businesses for Affordable Energy (FBAE). FBAE launched the Make Solar Safe initiative for consumers and policymakers to better understand how to protect solar power customers from predatory companies, unsafe construction, and other hazards.
Two of the largest solar rooftop companies in the nation are again under investigation for potentially fudging their books. This time, it seems the companies have been failing to disclose the true percentage of their customers that cancel contracts prior to having the solar panels installed.
Customers that have cancelled contracts after signing have claimed they were “strong armed” or even threatened by sales people. In 2016, approximately half of SolarCity’s contracts were cancelled prior to installation, and nearly 40 percent of Sunrun’s were.
SEC investigates Bay Area solar power companies Sunrun and SolarCity
By Riley McDermid, May 4, 2017
Two Bay Area solar technology companies are being probed by the Securities and Exchange Commission over whether or not they have adequately disclosed how many customers signed up for solar systems but later canceled their contracts.
San Francisco-based Sunrun and San Mateo-based SolarCity (which is owned by Tesla) are now being investigated by the SEC for potentially obfuscating how many customers they are losing, a person familiar with the matter told the Wall Street Journal.
“The SEC recently issued a subpoena to Sunrun and interviewed current and former employees about the adequacy of its disclosures on account cancellations, said the person familiar with the investigation,” the paper reports. “The SEC is also looking at SolarCity, the person said.”
The issue is an important one because cancellations can gauge the financial health of a company — and because there have been ongoing allegations that some customers feel pressured into buying solar services, which they then cancel.
“Some customers say they were strong-armed into buying solar-energy systems by sales representatives who threatened to sue them if they didn’t proceed with a project or to place a so-called mechanic’s lien on their homes—a measure used to force a homeowner to pay for a home-improvement project,” the Journal reports.
“Others say they didn’t realize they had actually signed contracts. Many said they believed they were just giving permission for a consultation.”
These cancellations at both companies, which are publicly traded, have become increasingly important to investors worried about their growth and the future of solar tech in general.
“Cancellations grew to be so large at SolarCity that in early 2016, before the company was sold to Tesla, about half of its customers were backing out of contracts before solar panels could be installed, according to people familiar with the matter,” the Journal reports.
“At Sunrun, that cancellation figure grew to be as high as 40 percent earlier this year, according to people familiar with the figure. The cancellation rates were especially high among customers who were approached by salespeople at their doorstep or while they were shopping at big-box stores, these people say. The increase in cancellations caused Sunrun to halve its growth expectations in 2016 from 80 percent to 40 percent, one of these people said.”
“[SolarCity] has remained focused on reporting the quality of our installed assets, not pre-install cancellation rates,” a spokesperson said in a statement. “Our growth projections have always been based on actual deployments.”
Yesterday, Mississippi Attorney General Jim Hood announced the creation of the Consumer’s Guide to Solar Power in Mississippi. The guide is meant to help consumers educate themselves on the basics of solar energy, financing options, and questions to ask installers to ensure professional installation.
Attorney General Announces the Consumer Guide to Solar Power in Mississippi
Attorney General Jim Hood is pleased to announce the creation of the Consumer’s Guide to Solar Power in Mississippi.
In December 2015, the Mississippi Public Service Commission (PSC) issued a groundbreaking rule allowing net metering in the state. Net metering is the process by which individual utility customers who use solar panels or other renewable energy generators can sell their excess power back to the power companies. The electricity produced by the customers using renewable energy generators can be placed on the electric grid to offset their power bill.
“Renewable energy including solar power can be beneficial to the environment while providing a costs savings for the consumer,” Attorney General Hood said. “It is critical to determine whether the investment for the renewal energy in a solar system is the right choice for your home or business. This guide offers tips and resources to help make that determination.”
The Attorney General’s Office is a member of the Mississippi Net Metering Working Group (Working Group), which was created under the new Order Adopting Net Metering Rule issued by the PSC. The Working Group is tasked with considering and addressing consumer protection and safety standards. The Consumer Protection Division of the Attorney General’s Office developed the guide with input from the Working Group and multiple stakeholders. The guide is a product of an ongoing multisector effort to protect consumers in this new arena, and the office appreciates all of the feedback received.
“Our neighboring states have experienced problems with licensing of solar contractors, so we want to be sure our office provides help and guidance to consumers in our state when making decisions in their solar installation,” General Hood said. “We tried to do this by way of legislation, but because that was tied up in the Capitol, we have produced this guide as a resource.”
Adding solar panels to meet a home or business energy requirements may help reduce electric bills, contribute to saving the environment, and increase the value of the property. However, adding a solar power system to a property is a big decision, and consumers should understand the basics of solar energy, financing options, and which questions to ask the experts. It is also important to know what to ask when hiring an installer. For more information and for a copy of the guide, go to www.agjimhood.com.