During my plus 25 years in the solar industry I have never utilized or promoted solar leasing. To me solar leasing companies were not solar companies trying to bring a value add to the customers. They were strictly financial mechanisms utilizing solar at the expense of the customer. Having said that companies like Sun Edison and Solar City really brought the industry to the front page of America due to the fact they were very financially profitable and could grow quickly. I believe that it is a short sited business model as the American consumer when purchasing large items tend to do their homework. It has become common knowledge that anyone can go to http://dsireusa.org/ and see what incentives are available. It becomes quickly clear how much Government incentives these solar leasing companies have been putting in their pocket that was meant for the consumer. First you get the consumer to get into a 20 year contract that is almost equal to their utility bill and then collect the government incentives that were due to the consumer. The problem has been that it is a large upfront cost and there has not been the availability of loans from traditional banks. I believe that if a incentive should exist it should be a low interest bank guarantee from the government to insure easier access to loans for the consumer. A large portion of our customers at NOW! SOLAR are agricultural based and they have a loan guarantee from the USDA that really helps (about 98% get their loan) when we approach traditional banking institution. The only one that has flat out been rude and said no has been Wells Fargo but the rest have been a joy to work with and have offered our customers great rates and easy options. The 30% tax incentive has been a great misnomer in the industry as most middle class customers have no need for the 30% tax incentive and fact is most sophisticated commercial customers do not really find a need for it either. This has been the solar leasing models sweet spot as they have structured mechanisms to take advantage of the 30% Federal Tax credit and turn it into a profit. There has not been one customer that I have personally spoke to that after I have explained the difference between owning their system and leasing that has said I would rather lease. They have said I could not qualify for a loan but I still really believe in solar so I am going to lease. I think that both Republicans and Democrats could really strengthen their political positions by coming up with a new bill that was structured around guaranteeing financing for customers to own their own systems as it is a true value add that every American would pat them on the back for. If we replaced this for the 30% Federal Tax incentive every homeowner would purchase solar. Think of the jobs this would create. It could truly make a politician a hero. Call me a dreamer but I believe in America and do not think our Government is too broken to not be a world leader in how to implement good policy. Whoever writes a bill for loan guaranty is going to wind up in the history books as it will create an astounding amount of jobs and put us down as the true world leaders in energy. We are proud Americans, we don't need money given to us we just need access to the financing. Please keep this in mind as you read the story below.
Published in The Daily Signal http://dailysignal.com/
Josh Siegel @JoshDailySignal
Photo: Getty Images
A different sort of green energy issue has sparked bipartisan action on Capitol Hill as lawmakers move to address allegations of deceptive practices in sales of rooftop solar panels.
Earlier this month, 12 Republican members of the House of Representatives wrote to the Federal Trade Commission, warning that leasing solar panels from a third party may be a harmful investment for homeowners.
Four House Democrats sent a letter in November to the U.S. Consumer Financial Protection Bureau, expressing similar concerns. In making sales pitches, they wrote, leasing companies “may be overstating the economic benefits of signing a long-term solar lease while failing to disclose important information.”
“To a lot of folks, these leases sound really good,” said Jeff Small, legislative director for Rep. Paul Gosar, R-Ariz., who spearheaded the letter to the FTC. “But when you dive into the details, it proves too good to be true.”
The House Democrats who wrote to the Consumer Financial Protection Bureau are Arizona’s Ann Kirkpatrick, Kyrsten Sinema and Ron Barber, along with Gene Green of Texas.
Solar leases are becoming a popular arrangement for those who don’t want to pay an upfront fee for rooftop solar panels, consumer advocates say. Leasing companies have access to federal tax credits for installing solar.
Leases usually have terms of 20 years and require monthly payments.
The congressmen suggest it’s difficult for consumers to calculate whether those payments will be less than the amount they save by generating their own electricity with solar power.
To encourage introduction of rooftop solar panels, many states approved a billing system called net metering , where homeowners can sell any excess power generated to their region’s electric company.
Steve Pociask, president of American Consumer Institute , a nonpartisan, nonprofit group, says third-party solar leasing companies “oversell” potential benefits to consumers from selling unused power.
“The question is, at what price am I selling it at?” Pociask said, adding that a state’s public service commission sets the price for excess power sold to a utility:
If I sell it at the retail price, it is a loss for the utility’s ratepayer consumer. That means that consumers that can afford to put solar panels on their roof are being subsidized by consumers who cannot afford to do the same. There is probably a fair price that would encourage a homeowner to want to do this, but right now [third-party solar panel leasers] are misleading consumers and stretching assumptions about the benefits of leasing solar panels.
Pociask recommends that the FTC come up with “common language” for contracts between a homeowner and a solar panel leasing company.
“These things need to be put in plain language,” Pociask said, adding:
If I am going to do a deal with you to sell or buy something, and I understand the contract better than you do, who is coming out on the better side of the deal? There should be a requirement that certain promises are known up front. There needs to be better information so people can make better buying decisions.
In their letter to the FTC, the Republican congressmen suggest there “appears” to be a need for a “resource center” for consumers to weigh the risks of leasing a rooftop solar panel.
The lawmakers note that customers have filed class-action lawsuits in California and Louisiana.
“Diversity in energy is a good thing,” Pociask said. “There is something attractive about solar energy. We all want to reduce our dependence on fossil fuels. But in the process, we’ve created a cottage industry that rips off consumers.”
In a story last month in the Arizona Republic, SolarCity Corp. of San Mateo, Calif., which controls most of the solar leasing market in the United States, defended its sales practices.
SolarCity accused the Arizona Public Service Co., the biggest utility in the state, of lobbying Congress to oppose its services.
“SolarCity depends on positive word of mouth to sell our systems, and unlike APS [Arizona Public Service Co.], we have to satisfy our customers in order to make money,” SolarCity spokesman Will Craven told the newspaper, adding:
People go solar because they talk to their neighbors, and they hear positive stories. Unlike APS, our customers know exactly what they’re going to pay for solar electricity for the next 20 years. It is known that [APS parent company] Pinnacle West has been lobbying Congress, and they are the likely source of this misinformation. However, as a market leader that prioritizes consumer protection, SolarCity looks forward to working with CFPB and members of Congress on this important issue.