Federal Government Addresses Solar Complaints

TThe federal government is taking steps to address the growing number of frauds plaguing the troubled residential solar industry.

The U.S. Treasury Department, Consumer Financial Protection Bureau and Federal Trade Commission told TIME they were launching a unified effort on Aug. 7 to encourage consumers to report fraudulent behavior while also educating consumers about what these evildoers are doing. By getting more consumers to report fraudulent solar companies, government officials said, they can more effectively track complaints and try to hold companies that violate the law accountable.

“We are beginning this effort with an alert to raise awareness of these frauds and allow consumers to file complaints with key regulators that can put a stop to bad actors,” said U.S. Treasury Deputy Secretary Wally Adeyemo. “We look forward to working side by side to advance the goals of helping consumers reduce the cost of energy in their homes, while protecting them against unfair, abusive and deceptive practices used by a small number of companies.”

The residential solar industry has grown a lot in recent years, thanks in part to incentives provided in the Inflation Reduction Act. But not all of this growth came from customers being fully informed about what they were buying. Solar companies rely heavily on independent contractors who are incentivized to make a sale. These door-to-door salespeople have little obligation to ensure that consumers are getting a good deal; in fact, some make more money the higher the price they charge consumers for a system. Hundreds of lawsuits allege that these salespeople overpromise and underdeliver, often telling people they won’t have an electric bill or will receive a government check if they sign up for solar panels. (The federal incentive is actually a tax credit, so it comes in the form of a tax break rather than a government check.) Other lawsuits allege that solar sellers forged signatures on electronic records or otherwise concealed what people are signing.

See more information: How Solar Sales Brothers Threaten the Green Energy Transition.

The government’s effort is a modest first step. It provides fact sheets to consumers on what they should know before signing up for solar panels. The fact sheets warn about sales pitches that say solar energy is a government program or that guarantee that customers will not have an energy bill. Consumers should also be wary of sellers with limited-time offers or other high-pressure sales tactics, sellers who use only electronic records and electronic signatures, and companies that charge excessive fees such as termination fees or sign-up fees, they say. the communications.

Federal warnings outline what consumers should do if they are scammed. Filing a complaint is critical, agencies say, in ReportFraud.FTC.gov, as well as with the Consumer Financial Protection Bureau. Some states also have consumer protection agencies where consumers can file complaints.

While the warnings are an attempt to educate consumers, the government’s previous efforts to regulate solar companies have fallen short. Attorneys general in several states have filed lawsuits against solar companies in recent years, but have often reached settlements that amount to a slap in the face. New Jersey, for example, reached a settlement with Vivint Solar Developer LLC in 2019 that saw Vivint (now owned by SunRun) agree to pay $122,000 and “significantly change” its business practices to resolve allegations that it engaged in into deceptive sales practices and violated consumer protection laws. In 2022, consumers filed another lawsuit against Vivint and SunRun, alleging that Vivint “continues to engage in deceptive door-to-door solicitation practices” that violate consumer laws.

See more information: The rooftop solar industry could be on the brink of collapse.

Meanwhile, consumer complaints about solar panel sellers have soared in recent years. The FTC received 5,331 complaints containing the phrase “solar panels” between January 1 and September 19, 2023, a 31% increase from all of 2022 and a 746% increase since 2018, when it received just 630 complaints .