The company, owned by Tesla, relies on monthly payments from solar panel customers. But foreclosures can halt those payments, and SolarCity relies on only one credit check to vet customers.
SolarCity’s Ties to Foreclosure Cases Raise Questions on Vetting Policies
SolarCity, the nation’s leading installer of rooftop solar panels and a renewable energy darling, has pitched its value to investors on a simple premise: Once customers sign up to lease a system, they will make payments to the company month after month for at least 20 years.
But even when the customers look good enough on paper, it does not always work out that way.
In dozens of cases over the last three years, The New York Times has found, SolarCity has reached long-term lease agreements with homeowners shortly before or even after they defaulted on mortgages. In at least 14 cases, the homeowners were already in default, or had other liens on the property, by the time SolarCity filed paperwork about the panels with the government.
The cases raise questions about how well the company vets customers. In addition, it is unclear how many foreclosure lawsuits involve the company over all.
In September, a lawyer for SolarCity, Mohammed Ahmed Gangat, filed a document in New York state court arguing that the company needed to file another document late because it had in recent months been “inundated with hundreds of lawsuits in New York, and thousands across the country, all of which have named SolarCity as a defendant in a residential foreclosure action.”
But when asked about that filing, SolarCity said that it was currently involved in far fewer cases — 139 — and that the lawyer had been mistaken. The company said the court filing had been made without the company’s reviewing or approving it. Mr. Gangat is not a SolarCity employee.
“Out of more than 305,000 installed customers, SolarCity is currently involved in 139 such proceedings,” the company said in a statement. “The litigation is not adversarial — being named in the foreclosure proceeding provides us with advance notice that we need to reassign a contract, and many are immediately resolved with the relevant bank.”
The company is also involved in foreclosure proceedings outside the courts but said it could not say how many.
Mr. Gangat did not immediately respond to calls or emails.
If the lawyer’s figures are correct, SolarCity, which is now owned by the automaker Tesla, may be facing a threat to its financial performance that it has not disclosed to the government and investors. The foreclosures can lead to a pause, or an end, of the lucrative monthly payments customers pay for the leases.
If the lawyer’s figures are false, he could face disciplinary proceedings under ethics rules, depending on the circumstances. The company said it was planning to have the document filed in court on its behalf corrected.
In either situation, details of the cases identified by The Times raise questions about how well the company, relying on one credit check, vets potential customers.
What SolarCity offers its customers is simple in theory: savings on their electricity bills from the solar panels glistening on their roofs.
The company often pays most or all of the bill for the installation, worth $25,000 to $30,000 on average, and charges the customer an agreed-upon rate for the electricity the panels produce, typically 10 to 15 percent less than they would normally pay for power. In return, SolarCity receives steady monthly payments.
In the years since the company’s founding in 2006, it has lowered the FICO score, the widely used credit score created by the Fair Isaac Corporation, it requires to get its solar panels. It now uses a score of 650, generally considered a “fair” rating, as the cutoff.
But often, the score is assessed several months before a solar panel system is installed and registered — plenty of time for financial circumstances to change.
“For a consumer with a sub-700 score, it’s likely that there are already some indicators of risk there, but not a severe one to that particular lender, I guess, at that point,” said Rod Griffin, director of public education at Experian, a credit reporting agency.
SolarCity is not the only company to find itself in the midst of such lawsuits. Sunrun, a competitor, has been named in a small number of cases.
The foreclosure lawsuits do not appear to have made much of a dent in SolarCity’s bottom line. When a customer loses a home to a bank in foreclosure, the company also risks losing income from its energy system unless it can reach a deal to take the system back or contract with the new homeowners. Company executives say that even after figuring in foreclosures, more than 99 percent of contracts are ultimately reassigned, relocated or paid off in advance.
Executives at the company have never expressed much worry about the risks of foreclosures, boasting that customers tend to pay their electricity bills even when they are not paying anything else. “We have customers that are foreclosed,” Lyndon Rive, chief executive of SolarCity, said in an interview in 2012. “They’re still paying their electric bill, so they still pay us.”
When a customer loses a home to a bank, the ownership of the solar panels can become unclear. Banks often consider them part of the overall property as fixtures. SolarCity has argued that the panels are its “personal property.”
The company has succeeded in convincing some banks that the panels are not fixtures, according to court records. But several foreclosure lawyers who have not been involved with these cases said SolarCity might face an uphill battle, especially if it does not act in court to protect its ownership interest in the panels.
“SolarCity needs to contest every foreclosure to have any realistic chance of getting either paid for or the return of their solar panels,” said Christopher McCormick, a lawyer in Connecticut who spent a decade representing banks in foreclosure proceedings and now defends homeowners in the cases.
“Those panels are pretty valuable,” he said. “It makes sense that the company would not want to lose them.”
Even if foreclosures are a problem for SolarCity, its services may help some customers get by during rough financial times. Alexis Hickerson, a resident of West Haven, Conn., said she had the company install panels while she was still trying to work out a deal with her bank to keep her home after she and her husband lost money on investments.
According to court records, Ms. Hickerson stopped paying her mortgage on Feb. 1, 2016. SolarCity filed paperwork with the government on May 6, 2016, about the installation. Ms. Hickerson said she was now going through a short sale of her home.
Ms. Hickerson said her power bills had been lower with SolarCity. The company, she said, will be able to either lease its panels to the new buyers of her home or remove them.
“I am happy with SolarCity,” she said in a phone interview. “It’s one thing that hasn’t been a problem.”
Read original story at: https://www.nytimes.com/2017/02/22/business/solarcity-foreclosure-cases.html
Three House Democrats – Henry Cuellar (Texas), Emanuel Cleaver (Mo.) and Bennie Thompson (Miss.) – are asking CFPB to investigate “unethical business practices” among some “bad actors” in the rooftop solar industry. “Our fear is if bad actors continue to operate unrestrained, the industry’s reputation will be so tainted that American consumers will shy away from embracing this important form of clean energy,” they write in a letter obtained by ME Thursday.
Full letter available to subscribers at: https://www.politicopro.com/f/?id=00000159-dcaa-d10a-abf9-ddefd18d0001
Firefighters are having trouble fighting solar panel fires. It is dangerous to the first responders because of fear of electrocution, buildings collapsing from the weight, and limited access to the center of the fire. The panels also make it challenging to get the fire out because a fire on the roof disables the source of ventilation and makes it even harder.
Why solar panels frustrate firefighters
New Jersey’s growing solar energy industry is creating some new hazards for firefighters and prompting the firefighting community and solar industry officials to develop new safety measures.
Firefighters say rooftop solar panel systems are in many cases limiting their ability to vent smoke from burning buildings, and firefighters must contend with panels that produce electrical current and can’t be shut down as long as the sun is shining.
“It changes the way we fight a fire,” said Atlantic County Fire Training Director Michael Corbo. “It’s a safety issue.”
Solar industry officials acknowledge the concerns and say they’re involved in research to limit the potential danger firefighters and other first responders face from live solar panels. They also said recently enacted fire code regulations in New Jersey require access aisles through the rows of solar panels that often cover the expansive flat roofs of everything from industrial buildings to schools.
Dan Whitten, spokesman for the Solar Energy Industries Association in Washington, D.C., said the organization continues to support better building, fire and electrical codes and technological advances to improve safety for first responders.
“In fact, we have sought out opportunities to collaborate with firefighters on code and standards development such as improved firefighter access pathways, system-based fire testing methods and rapid shutdown system design that result in state-of-the-art solutions,” he said.
Some of those solutions don’t have to be elaborate.
All but about a dozen properties in Vineland are serviced by the city-owned Vineland Municipal Electric Utility.
The utility provides the Fire Department with the addresses of buildings on which solar panels are installed so firefighters know what to expect before arriving on the scene, said Vineland Fire Chief Bob Pagnini. There is no reason why, in other municipalities, either the companies that install the panels or the regular electricity provider can’t provide similar notifications, he said.
Such a notification wouldn’t be onerous, said Lyle Rawlings, president of the Mid-Atlantic Solar Energy Industries Association, which covers New Jersey, Pennsylvania and Delaware. The notice could be included in the packet of forms a company must fill out for municipal code enforcement offices before starting a project.
Rawlings said while he’s heard the concerns from firefighters for some time, he doesn’t see finding solutions as being a combative situation between the solar industry and firefighters. Both sides are still learning how to cope with the impact of new technology, he said.
New Jersey ranks fourth in the United States in installed solar capacity with 1,695 megawatts, according to the Solar Energies Industries Association. More than 1,700 more megawatts of solar electric capacity are expected to be installed in the state during the next five years, according to the organization.
With that explosion of solar arrays comes problems for firefighters.
For instance, about 7,000 solar panels on the roof of a burning warehouse in Delanco, Burlington County, caused access problems for firefighters in September 2013. Six months later, firefighters said they faced electrocution risks from the panels in controlling a blaze at a warehouse in Berlin Township, Camden County.
Last month, firefighters battling a blaze in Providence, Rhode Island, said their efforts were marred by concerns that the extra weight from solar panels could cause a premature roof collapse. A recent fire in Merrick, New York, caused some solar panels to melt and fall on firefighters.
Corbo said the state holds information classes related to dealing with fire and solar panels twice a year. Atlantic County will hold a similar course depending on the number of firefighters interested in attending, he said.
“The majority of the fire service knows about the solar panel issue,” he said.
But roof access continues to be major problem, Corbo said. Firefighters unable to vent smoke through roofs now have to vent the materials in a more horizontal, side-to-side manner through windows or walls, he said. Firefighters may not want to work inside some structures for fear of premature roof collapse aided by the weight of a solar panel, he said.
“We have to adapt,” he said.
Rawlings said some of the new technologies include devices that attach to each solar panel and prevent electric current from leaving the panel, further limiting electrocution concerns. The solar panels will continue to be “hot,” he said, and remain so as long as there is sunlight.
“Common sense still applies” for firefighters dealing with solar panels during the course of their duties, he said. Wearing insulated gloves is one protective measure, he said.
But even with all the new safety advances, Rawlings estimates there are still about 45,000 solar arrays built under old fire, electrical and construction codes.
“Firefighters are still going to be faced with older systems that don’t meet the new codes,” he said. “They will continue to need training on how these systems work.”
An elderly woman’s home was set ablaze from a fire started by the solar panels on the roof. It did not take long for the weight to cause the roof to collapse resulting in even more damage to the home. The panels intended to be cash saving culminated in tens of thousands of dollars worth of damage to the home.
SOLAR FLARE Pensioner’s home gutted after its cash-saving solar panels ‘set fire to the roof’
Firefighters rescue three cats from the blaze which caused tens of thousands of pounds damage
A PENSIONER’S home has been devastated by fire after cash-saving solar panels on the roof reportedly ‘burst into flames’.
A neighbour broke into the elderly woman’s home in sleepy Warligham, Surrey, as fire raged through the end-of-terrace property.
The blaze was quickly brought under control but the roof collapsed and the first floor is very badly damaged.
The semi-detached house was empty at the time of the blaze but firefighters rescued three cats from inside.
An elderly neighbour, who is in a wheelchair, was also rescued from the adjoining house.
The woman hadn’t noticed the fire raging and didn’t answer the door when neighbours knocked to alert her to the danger.
Two ambulances, four fire engines and fire service support vehicles dashed to the scene after the blaze was reported at 9.30am this morning.
Debbie Miles, who lives opposite, said a firefighter told her the fire started in solar panels on the roof.
“The panels caught fire and the roof has collapsed,” the child minder said. “It’s so lucky no-one was inside at the time.
“It was absolutely bellowing, but you couldn’t smell anything, it didn’t smell like fire.
“There were lots of flames. It’s very scary because you don’t think it’s going to happen near you.
“The firemen got here quite quickly so luckily it didn’t spread to the next-door house.
“One of our neighbours had to break in to the neighbour’s house to get her out. She was quite shaken up.
The ambulances were called for her but thank goodness everyone was ok.”
Pumps from Banstead, Croydon, Godstone and the aerial ladder platform from Leatherhead were this afternoon still at the scene.
A spokesman for Surrey Fire Service told The Sun Online the investigation into the exact cause of the blaze is still ongoing.
The owner of Salt River Solar in Arizona was sent to prison and hundreds of his customers were released from their lease with the company because fraud was so rampant. Problems were reported statewide involving equipment that was paid for and never installed, equipment that did not work, and lack of promised service.
Judge voids hundreds of solar leases in Arizona
Ryan Randazzo, The Republic | azcentral.com
Published 10:50 p.m. MT June 22, 2015
Fraud was so rampant at a now-defunct rooftop-solar-installation company in Surprise that the owner is not only serving a five-year prison term, but a judge has released hundreds of customers from their leases with the company.
Michael Allen Fricker, 55, owned Salt River Solar and Wind, which installed rooftop solar arrays throughout Arizona.
Fricker was sentenced last month to five years in prison by Pima County Superior Court Judge Casey McGinley of Tucson, who also released 1,157 customers from their leases.
Most of those customers never saw their solar panels installed, even though many had paid deposits. But 344 customers who did receive installations are among those released from their leases, court records say. It’s unclear whether any have been making monthly lease payments or if they paid leases up-front, whether they stopped paying when the company went out of business two years ago.
“This person was a serial financial predator,” said Ryan Anderson, director of communications for the Attorney General’s Office, which worked with the FBI on the case. “Mr. Fricker was engaged in a pattern of fraud that extended beyond his activities in Tucson.”
Anderson said the Attorney General’s Office was flooded with complaints statewide for problems involving equipment that was paid for but never installed, equipment that did not work properly, and customers who did not receive promised service.
Salt River Solar and Wind ceased operations in 2013 after the Registrar of Contractors revoked its license, but the Attorney General’s Office and the FBI continued their investigation.
Public records suggest Salt River Solar and Wind installed about 500 leased solar arrays in SRP and APS territories from 2009 to 2012, and hundreds of additional systems were canceled in 2012 as the company ran into trouble.
Some Tucson Electric Power customers could be eligible for restitution because Fricker’s activities in that utility’s territory were what the AG’s Office and the FBI targeted for prosecution.
Fricker required at least 25 TEP customers to pay him both an up-front deposit and the value of the TEP rebate they would get for the solar setup, with the promise they would get the rebate when it was paid, according to a criminal investigation by the Tucson office of the FBI’s Phoenix division.
But when TEP paid those rebates, totaling thousands of dollars in most cases, Fricker never paid it back to the customers.
Fricker was indicted on multiple felony charges in January 2014. On Oct. 29, he was convicted of fraudulent schemes and artifices, and illegally conducting an enterprise. He agreed to pay up to $1 million in restitution.
He could have avoided prison, but the FBI found Fricker violating a term of his plea agreement by marketing solar products in California, court records say.
The court revoked Fricker’s release conditions and ordered him held at the Pima County Jail pending sentencing. On May 18, McGinley sentenced Fricker to prison.
“That’s where he needs to be,” said Carol Girvan of Tucson. “We are on a long list of people that have been swindled by Mr. Fricker.”
Girvan and her husband, Paul, paid Fricker’s company $17,800 in 2011 for a solar system. Fricker agreed to repay them $15,500 from TEP when the utility paid the rebate on their solar panels.
The panels were installed, though far behind schedule. TEP paid the money to Fricker, but he never paid the couple.
“When you are a senior citizen, and a veteran like my husband, this is a life savings for us that we will never recoup,” Girvan said.
Her neighbor is even worse off, Girvan said, because the neighbor paid Fricker but never saw the solar system installed, she said.
The Girvans can’t collect on the service agreement they were promised because the company is defunct.
“If anything happens to the panels, now they are our responsibility,” she said. “You feel like you are a victim twice.”
Salt River Solar and Wind also had problems with a federal tax-credit program, which is likely the reason the company struggled financially.
As part of the American Recovery and Reinvestment Act, developers were offered grants to cover 30 percent of the cost of solar installations. Normally, developers get a 30 percent tax credit, but the cash grants were meant to kick-start the industry during the economic downturn.
Program rules required developers to complete installations before they could apply for reimbursement. But funding was not guaranteed, and even after systems were built, the government delayed approval of some applications and denied others.
U.S. Treasury records indicate that Salt River Solar and Wind was paid for systems that were never installed. It also was rejected or denied payment for some systems that were placed in service.
Many customers paid their leases up-front, so releasing them from the contract won’t save them any money.
That is the case with Richard Moon. He and his wife own the Moonlight Manor assisted-living facility in Surprise.
They paid about $60,000 up-front for a solar lease with Salt River Solar and Wind.
Moon said the installation took longer than expected, and that the company never delivered the software promised that would help track the electricity production of the system.
He also said that because the company went out of business, he had to call in another company to perform about $500 of maintenance that should have been done by Salt River Solar and Wind.
Potential victims of Salt River Solar and Wind are encouraged to contact Amy Bocks with the Attorney General’s Office at firstname.lastname@example.org. Claims must be submitted to the court by Aug. 14.
Michael Fricker and his wife, Theresa, also were accused in a civil lawsuit in 2012 of committing fraud, and a Maricopa County Superior Court judge ordered them to pay more than $265,000 plus court costs and attorney’s fees.
Court records also show that in 2000, Fricker was convicted in Oregon on a misdemeanor charge of writing a bad check and a felony charge of forgery. Records show he was sentenced to two years’ probation.
An Apple facility to be used as a data processing plant endured a rooftop fire from solar panels. The building was evacuated and 3 different fire station crews were called to the scene to prevent the fire from spreading inside.
Crews battle fire at Apple facility in Mesa
Officials battled a second-alarm fire at an Apple facility in Mesa on Tuesday morning.
Mesa Fire Department said the fire started shortly before 11:30 a.m. near Elliot and Signal Butte Roads.
The fire appeared to be on solar panels on the roof of the building over a loading dock. The fire did not appear to be burning inside the building itself, officials said.
Mesa firefighters said a second alarm was called partially because the facility is so large. “We also wanted to make sure we get a great deal of resources here in the event that we had to section off this fire and keep it from spreading to different parts of the building,” said Forrest Smith with Mesa Fire. “It gives us the resources and the equipment that in the event this fire took off on us, we could really surround it and keep it from spreading.”
Crews from Mesa, Gilbert and Superstition Fire worked together to get the fire knocked down in 35 minutes.
About 50 employees had to be evacuated and there were no reports of any injuries.
Apple has plans to use the building as a data processing plant.
The cause of the fire is under investigation.
Read original article at http://www.abc15.com/news/region-southeast-valley/mesa/crews-battling-fire-at-apple-facility-in-mesa
A dental office went into flames because of solar panel malfunctions forcing the dental office and adjacent chiropractic office to evacuate. The fire caused challenges for the fire department because the panels harness so much energy at the roof where firemen usually rely on on ventilation.
Solar panels catch on fire at dentist office in Latham
Fire officials said solar panels on a building may be the cause of a fire Friday morning.
The fire happened just before 10 a.m. on Route 9 just north of the circle. A dental office and a chiropractor’s office are both located in that building and had to be evacuated. Route 9 was closed in both directions.
Authorities said the fire started on the roof, and it was likely caused by a solar panel malfunctioning.
“I heard the boom,” Dr. Jocelyn Tameta said. “So I looked out the window and there’s smoke coming out, and next thing you know, everybody is saying, ‘Get out of the building. The roof is on fire.’”
Tameta’s dental practice is on the second floor of the building. The building owner said the solar panels were installed about five years ago, and they have not had any problems.
“It’s not common,” Steven Kasselman of Kasselman Solar said. “It’s actually very rare.”
Kasselman is the president and CEO of Kasselman Solar. His company didn’t install the panels on the Route 9 building, but he explained that the system in place is older and uses DC electricity, which he said is more dangerous than AC electricity.
“We install what’s called micro inverters, which isolate the DC string to each individual solar panel,” he said. “So essentially, all of our systems only have AC electricity on the roof.”
Latham Fire Chief Thomas Bergin said it was a challenging blaze, and the flames spread into the attic, which meant their plan of attack had to be different.
“There’s a lot of energy in those panels, and of course, they’re on the roof where we need to ventilate,” he said.
Officials said no one was injured, but there was substantial damage to the dental office.
The tenants did have fire insurance, but it’s unclear how long it will take to repair the damage.
Solar companies are using misleading and deceptive promises when advertising. The cost savings and rebates that the companies promise are not finding their way into the consumer’s wallet. One buyer said they “will likely never recoup the money spent for the panels.”
Arizona Solar Customers Complain About Deceptive Marketing Practices
By Peter Fricke
2:31 PM 04/07/2015
Solar companies in Arizona claim they are victims of “slanderous campaigns” by electrical utilities spreading unsupported allegations, but letters from consumers tell a different story.
The Arizona Corporations Commission launched an inquiry last December “to study business models related to solar distributed generation,” inviting interested parties— including consumers, solar panel manufacturers, power companies and interest groups—to submit comments, which are posted on the commission’s website.
Among the earliest respondents was The Alliance for Solar Choice, a coalition of the nation’s largest rooftop solar companies, which filed its response to the inquiry in mid-February.
Adopting a somewhat defensive posture, TASC asserted that Arizona has “the most hostile environment in the country for those in the otherwise blossoming distributed solar industry,” a condition it attributes to “dishonest campaigns” by utilities like Arizona Public Service, the state’s largest electric utility.
TASC accused APS of “running slanderous campaigns against the solar industry,” saying the utility has “presented nothing but unsupported claims of alleged malfeasance.”
However, the latest batch of consumer letters, made available last week, reveals numerous frustrations over misleading and deceptive promises from solar panel manufacturers. This suggests that allegations of malfeasance have more support than the group initially believed.
The most common complaints involve promises made by solar companies that installing solar panels would result in significant monthly savings on electricity, and that customers would receive hundreds of dollars per year in rebates and tax credits. In reality, the letters allege, the cost savings and rebates are a fraction of what customers were told to expect, leading many to believe, in the words of one correspondent, that they “will likely never recoup the money spent for the panels.”
The concerns go beyond mere financial considerations. One writer claims that, “shortly after getting the system, there were many birds and pigeons around our home which led to many bird droppings,” and says they cannot afford the $800 that SolarCity charges to bird-proof the system.
“SolarCity should have told us that this would become a problem before they put the system on our house,” the writer argues. “Or they should have included the bird proofing in the cost of installing the system.”
The ACC says that in the course of its proceedings, it has “heard arguments and anecdotal evidence regarding the advantages and disadvantages of business models relating to both the leasing of and purchase of distributed solar electric generation equipment,” and hopes to shed further light on the competing claims through the ongoing inquiry.
Read full article at http://dailycaller.com/2015/04/07/arizona-solar-customers-complain-about-deceptive-marketing-practices/
The rooftop solar panel scam is the latest homeowner fraud. Homeowners are promised to save energy, have a low installation cost, and save on their monthly bills. But instead they are not told about the lien on their property when entering the solar panel lease or the steady increase in payments year after year if the electric utility doesn’t raise the rates.
Roof-Top Solar Panels — the Latest Homeowner Fraud
Friday, 14 Mar 2014 03:46 PM
One man thought he was going to lower his use of electricity and pay less each month by installing solar panels. However, he is now paying more, is stuck in the contract for 20 plus years, and dislikes the eyesore of the panels on his roof. Others who used SolarCity endures shoddy installation and a raised monthly bill as well.
Customers tell horror stories of solar company that gets $422M in tax dollars
February 26, 2014
We all get them — telemarketing callers pushing home solar-energy systems that will save us from rising electric bills.
Most of us generally hang up. But in 2012, Jeff Leeds, who lives in the Northern California town of Half Moon Bay, listened. His 3,100-square-foot home features 91 incandescent bucket lights, a 180-gallon fish tank, three large refrigerator-freezers and a huge entertainment system. His electric bill was averaging $350 per month.
The sales pitch Leeds was hearing on the phone sounded ideal: Lease a system from SolarCity, the nation’s second-largest solar electrical contractor, for a low monthly fee and reap the rewards of cheap electricity.
“For a $600 fee up front, I would pay $182 a month for the next 20 years,” Leeds said. “They have a performance guarantee. If I don’t make enough electricity, they said, ‘No problem, don’t worry, we will write you a check.’ I thought, ‘I’m covered.’”
Tacked on to that would be what the company called a small bill from the local utility company allowing the customer to use the grid and to cover the use of any electricity Leeds drew from the utility rather than from his SolarCity solar panels.
Now, 15 months later, the local utility company has raised its rates and instead of a lower bill, Leeds is pushing $500 a month with no way out for the next two decades. And he has the eyesore of solar panels that cover most of his roof.
“As a customer, you have no say,” Leeds said. “With a solar lease, you are putting the stuff on your roof. You have a signed contract with the devil and you are stuck with the stuff.”
SolarCity looked into Leeds’ case after receiving a call from Watchdog.org and offered this comment: “Mr. Leeds’ system did produce less than we guaranteed last year so he will be compensated for that under his performance guarantee.”
Was Leeds’ case an aberration?
SolarCity has generated a high number of cases of shoddy installation, said Gerald Chapman, building inspector manager for San Mateo County, which includes Half Moon Bay.
“SolarCity seems to be the biggest offender,” Chapman told Watchdog.org.
By contrast, he said, SolarCity’s small business competitors — he called them “the little guy” — “wants to do it right.”
“We pride ourselves on installation quality, but if we do make a mistake, we make it right,” countered Jonathan Bass, SolarCity’s vice president of communications. “We are rated A-plus by the Better Business Bureau, the highest rating they provide. Our work has been inspected and approved by more U.S. building departments than any other solar provider.”
Who is SolarCity?
The Obama administration’s 2009 stimulus package created an open trough of cash subsidies, leading to an explosion of solar-energy companies. Some of those — Solyndra is the most prominent example — went bust spectacularly. But such high-profile failures and reports of widespread abuse have done little to dampen entrepreneurial enthusiasm.
With rebates, tax breaks and the steady climb of electric rates, more and more Americans have been signing on for solar. But retail solar technology remains expensive — upward of $20,000 per home.
That’s where SolarCity comes in.
Founded in California in 2006 by Elon Musk — PayPal and SpaceX founder and CEO of Tesla Motors, creators of the luxury electric car — SolarCity leverages a unique business model to make solar more affordable. It leases systems to homeowners, typically for a 20-year period.
SolarCity has accepted more than $11 million in federal stimulus funds to make its business run. But the real public support appears elsewhere. Because SolarCity technically owns the energy systems it installs, SolarCity — not the homeowner — earns the federal tax break intended as an incentive to go solar. So far the company has earned $411 million in such tax breaks. The company also may earn additional income on state subsidies.
If that lease is a financial boon to SolarCity, it may prove problematic for SolarCity consumers. No matter how rapidly solar technology evolves, the SolarCity lease ties each homeowner to technology that is cutting edge only at the signing of the 20-year contract.
“Our approach is to install systems to the highest engineering standards,” SolarCity says on its web site. “SolarCity has assembled one of the most experienced clean-energy project design and installation teams in the world.”
The marketing has paid off. SolarCity claims some 90,000 customers in 14 states, and says it signs a new customer every five minutes. The company says its customers include Home Depot, Walmart and the U.S. government.
SolarCity vs. inspectors
Yet consumer-oriented sites like Yelp and the Better Business Bureau , the organization that rates SolarCity an A+, feature criticism from unhappy customers whose complaints follow a similar theme — shoddy installation, poor customer service and hidden fees. Many of the postings have an almost panic-stricken tone as the consumers plead for some sort of resolution to their nightmarish scenario.
More often than not, the negative comments attract the attention of SolarCity officials, who post resolutions to the various problems. Many of the consumers complain that they have spent months trying to remedy faulty installation, only to receive either continuous boilerplate responses from customer service or no response at all.
One California man got a front-row seat at the conflict between SolarCity installers and municipal building inspectors who are sent to sign off on the system before it is allowed to operate.
“The city came out during installation and an inspector gave them the codes and requirements,” said the consumer, who asked not to be identified. “The city guy told them exactly what he wanted and what was necessary, and they still put in the wrong breakers and the wrong wiring. The inspector came back out and looked at it and said, ‘You guys put the wrong breakers on — I told you guys what I needed for the code.’”
The consumer said nearly three weeks went by with no word from SolarCity. He finally called and talked to a manager who said the system had a design problem.
“I said, ‘What do the designs have to do with the breakers? Why not have the right design from the get-go?’” he said.
In all, he claimed, it took four months to finish.
Four months was blazing fast compared to the experience of San Diego lawyer Andrew Athanassious. He first talked to SolarCity in June 2013, eager to get a system installed on his massive home before a large September 2013 utility rate hike. Despite a contract, Athanassious said SolarCity later told him his roof was “not the right material” and he’d have to pay an additional $7,500.
Athanassious is no building contractor, but he said SolarCity’s installers should have known what they were getting into.
“It’s obvious what kind of roof I have. It’s clay tile. It’s not like you could think it’s anything else,” he said.
That was on Aug. 1. Athanssious said SolarCity virtually ignored him for the next two months. He finally agreed to split the cost of the system with SolarCity because they were still the lowest-priced contractor and because finding another solar company would take too much time. SolarCity finally installed the system in October. Unlike Leeds, subsequent electricity costs haven’t been a problem. Athanassious’ utility bill was $410 per month and now it’s zero. He pays SolarCity $357 per month for a lease, saving about $50 a month.
SolarCity responded: “Mr. Athanassious’ system did require a roof upgrade, and we sourced it for him at the lowest cost.”
But Athanssious has problems that remain. During installation, contractors rewired his swimming pool heater incorrectly when they were working on the home’s electric panel. They still haven’t fixed that, he said. And SolarCity has started tacking on $15 per month to Athanassious’ bill because he refuses to pay via direct deposit, a surcharge hidden in the contract.
Other consumers have been hit with the $15 fee as well, and they’ve complained on Yelp and to the Better Business Bureau.
“When I signed up, I was led to believe that they had online bill paying,” Athanassious said. “When I called them, they said they don’t have online payment capability.”
Stefano Chioetto of Denver has his system installed last February. A building inspector discovered that the installed inverter was incompatible with the utility grid and the system would not operate. For the next 50 days, Chioetto checked with SolarCity on the progress of a replacement part. He said he was given only vague answers like,
“We are doing our best and are committed to fixing your system ASAP,” according to his Better Business Bureau complaint.
“They found out that the inverter they actually needed was very expensive and they had to shop around and had no idea where to find it to fit in their budget,” Chioetto told Watchdog.org, saying he discovered this from an outside solar energy expert that he contacted.
Meanwhile, the summer months had arrived and Chioetto was annoyed that he couldn’t use his panels. After he complained to the BBB, the problem was fixed almost immediately — two months after the building inspector’s discovery.
But now he has a new problem. Chioetto lives in a townhome and shares a roof with his neighbor, who has decided to get solar panels of his own. He discovered that SolarCity installed the panels about 18 inches onto the neighbor’s side of the roof even though the dividing wall is clearly visible even from the ground, both men said.
“It’s very obvious that it’s going over a foot and a half,” said the neighbor, who did not want to be named. “You can absolutely see the property line without going on the roof.”
SolarCity admitted that was a problem.
“Mr. Chioetto had a grid parameter that is unusual in a residential site, and we ultimately found a compatible inverter that could support it, and we are redesigning his system to appease his neighbor and still offer him the same performance,” SolarCity said in its emailed statement.
The neighbor decided against using SolarCity because it kept changing terms of the contract by continuing to reduce the amount of electricity that would be produced. Meanwhile, he says, SolarCity hasn’t fixed the encroachment.
“They said they are researching modules that are smaller, and it’s back-ordered until May,” the neighbor said. “I don’t know if I believe that.”
Read original article at http://watchdog.org/130098/solarcity-horror-stories/