Rooftop photovoltaic sites from other companies can often hide costs

Deceptive and high-pressure sales tactics in third-party solar transactions can leave rooftop solar customers in a difficult position.

Under the contracts, now aggressively marketed to communities of color, homeowners pay a monthly fee to use the company’s rooftop solar panels and receive the energy-saving benefits that rooftop solar panels provide. The third-party owner collects leasing fees and generous federal tax credits.

Sales tactics such as focusing on more vulnerable homeowners or creating a sense of urgency to drive sales hinder the growth of an industry that experts say could be an important part of increasing the state’s use of renewable resources.

“There has been an increase in consumer complaints regarding rooftop solar sales and contracts,” said Jenifer Bosco, senior staff attorney at the National Consumer Law Center. “It’s really unfortunate because we think this is an area where consumers can really benefit from renewable energy if it’s done the right way.”

Sellers sometimes target older home owners or people with limited English proficiency and promise “free solar panels” – a claim that is not entirely false, as the panels are sometimes installed at no upfront cost, but make no mention of the monthly fees that the homeowner will have to pay over the course of a decades-long contract.

They may overestimate the benefits of solar energy or make claims about how much a homeowner can save on energy bills that may not be sustainable in the long run with changing utility rates.

Sometimes sellers may claim to be affiliated with a utility company, but an Eversource representative said the utility does not issue its stamp of approval to any third-party solar installer.

Often, the salesperson at the door urges the homeowner to make a decision right away, something Bosco cautioned against given the potentially high costs and long timeline of the transaction.

CNET, a consumer technology review site, estimates that the average price for a solar panel lease is $50 to $250 per month, which can mean a price of up to $75,000 for a contract that often lasts 20 or 25 years.

Instead of making a choice locally, Bosco said consumers should get a variety of offers and find out if a third-party solar deal is right for them.

“Consumers really need to take a step back, get quotes from different contractors, find out if it makes sense for them, find out if they qualify for any programs or incentives, and not just sign up just because someone is there for you door, saying, ‘This is great, but you have to make the decision now,'” Bosco said.

Corey Ramsden, vice president of Go Solar programs at the D.C.-based nonprofit Solar United Neighbors, compared finding a third-party solar provider to finding a contractor for any other type of home improvement.

“If someone comes to your home and sells you solar power, regardless of how they finance it, you should stop and get more than one quote before you make a decision – just like any other deal you might enter into for your home like air conditioning or any other home repairs,” he said.

Sales practices related to third-party solar contracts are on the radar of Attorney General Andrea Campbell, who said in a statement to Banner that these systems can benefit both parties.

Her office encouraged consumers to take their time when considering a contract and review the terms of the contract for issues such as financial obligations, the length of the contract, maintenance costs and what happens if the homeowner wants to move in the middle of something , which may be a transition period. contract for several dozen years.

In a statement, Campbell said her office will continue to support consumers in making informed choices and enforce consumer protection laws when they see bad actors operating in the marketplace.

Transactions with third parties typically take the form of a solar panel lease or power purchase agreement. In the first case, similar to leasing a house or car, home owners pay a fixed monthly fee for the panels and receive the electricity generated. Purchasing energy is more like paying a utility bill, in which the customer pays for the energy produced by the solar panel at a set price per kilowatt hour.

Both may be subject to escalators, elements written into the contract that increase these rates over time. Under either agreement, consumers are not eligible for tax credits under the Inflation Reduction Act related to the installation of solar panels – these benefits go to the third-party operator.

In Massachusetts, through a system called net metering, energy from roof panels first goes to the home where the panels are installed. If a household uses less energy than the panels produce in a month, the customer receives a credit from their utility company on the next month’s bill.

Ramsden concluded that there was no particular advantage of one model over the other. Power purchase agreements can allow a homeowner to pay less in the winter when less energy is produced, while lease agreements provide a predictable monthly payment.

Other ways to use solar energy

Consumers who want to use solar energy also have other options. Bosco was hesitant to specifically endorse power leasing or purchase agreements, instead recommending that homeowners consider installing their own panels with a low- or no-interest loan.

“It would just be getting a loan,” Bosco said. “And just like with a car, not relying on the dealer to give you a loan because you know they might not give you the best terms.”

Last month, the Massachusetts Community Climate Bank, an initiative through the quasi-public agency MassHousing, launched a new program aimed at offering loans to consumers to purchase solar panels and other clean energy improvements to their homes.

Bosco also pointed to community solar projects as another solution for renters or home owners who can’t or don’t want to install panels on their own roof. In one version of this approach, the customer pays monthly for the part of the photovoltaic panel that is not located in his home, and receives an addition to his bill for the energy generated by this installation.

Massachusetts has its own solar offering for low-income communities through the Solar Massachusetts Renewable Target program. The SMART program enables people to engage in the clean energy transition, but the system faces obstacles related to limited community solar projects and complex billing setups.

The department expects third-party solar contracts to play a role as the state uses a mix of approaches to achieve solar and net-zero carbon emissions goals by 2050, according to a representative from the state Department of Energy Resources (DOER).

The state’s 2050 Clean Energy and Climate Plan estimates that 27 gigawatts of solar power will be needed to meet emissions reduction benchmarks. According to the Solar Energy Industry Association, the state’s capacity is about 5 gigawatts.

DOER likened sales concerns to growth concerns in a relatively young industry. Joseph Curtatone, president of the Northeast Clean Energy Council, said it’s something to watch out for as the industry grows, but it’s not a death sentence for what he called the available solar energy pathways.

“As our solar energy landscape evolves, informed choices enable homeowners to contribute to a sustainable future while enjoying the economic benefits of solar energy,” Curtatone said. “But we want to make sure they are truly informed.”