Solar contractors, including SolarCity and Sunrun, are in the crosshairs of both Republicans and Democrats in Congress who seek an end to what they call “potentially deceptive sales tactics” associated with the companies’ zero-down, 20-year lease business model.
Spurred by consumer complaints that the massive savings they were promised never materialized, 12 Republicans and four Democrats have asked two federal regulatory agencies to investigate concerns that “these leases are not offered in good faith or with accurate disclosures.”
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Recent letters by the GOP to the U.S. Federal Trade Commission and by Democrats to the Consumer Finance Protection Bureau come on the heels of a year-long investigation by journalists into SolarCity, one of the nation’s largest solar contractors.
Owned largely by billionaire Elon Musk, SolarCity pioneered the leasing business model to take advantage of state and federal tax breaks paid to solar-energy owners.
“I do not want the future of solar energy harmed if there are consumer scams going on that will cause thousands of people to question the entire solar industry based on their own bad experience,” said U.S. Rep. Paul A. Gosar, R-Ariz. “A free market depends on fairness, openness and honesty.”
Gosar, an advocate of solar, initiated the GOP probe after receiving complaints from constituents.
“Someone brought in an actual brochure SolarCity uses in a sales pitch, and the savings were based on utility rates increasing by 4 percent annually,” said Jeff Small, Gosar’s legislative director. “At least in Arizona, this has never happened. The highest it has ever been was 3 percent. Usually it’s 1 percent.
“Every little thing we looked into raised the hairs on the back of (Gosar’s) neck, so he asked us to dive into it more and wasn’t pleased with what we found.”
The letters by Gosar and U.S. Rep. Ann Kirkpatrick, D-Ariz,, contain several pointed questions with the same theme:
- What protections exist for customers entering into a solar contract?
- What safeguards are in place to ensure customers have full disclosure pertaining to the contract?
- What is being done about consumer complaints?
“Customers are quoted savings each month on their utility bills,” Kirkpatrick wrote. “However, who calculates those estimations, and are they accurate? Also, it is my understanding that early solar lease payments are teaser rates that make solar energy payments seem affordable.”