Lawmakers Raise Questions about Deceptive Marketing in Solar Industry
The leases lock homeowners into decades-long agreements that some lawmakers say will likely exceed both the life of the roof and the time that the homeowner lives under it. What are the hidden costs of solar leases?
Federal lawmakers are raising questions about solar leasing companies that aggressively market zero-money-down leases but potentially overstate the savings and understate the risks. 
Solar leases have become an increasingly attractive option for homeowners who are looking to shave energy costs but who may not have the money to pay upfront for the panels. Installation costs for solar ownership can run upwards of $20,000. Homeowners who lease, by contrast, pay nothing upfront for installation.
Often, though, the leases lock homeowners into decades-long agreements that some lawmakers say will likely exceed both the life of the roof and the time that the homeowner lives under it.
A recent letter to the FTC signed by a dozen Republican members of the House of Representatives highlighted the concerns:
As a very new industry with a limited track record and little regulatory oversight, the solar leasing market may pose a considerable risk to the increasingly large numbers of American consumers that commit to the leasing product without all of the relevant information (not to mention the American taxpayer, who heavily subsidizes each rooftop solar project).
The Republicans asked the agency what options exist to ensure that consumers are fully apprised of the costs, benefits and financial risks of solar leasing arrangements and what recourse there is for the consumers to be held harmless for the remainder of the lease if a company fails.
They also pointed to the problems that arise when homeowners want to sell their houses after entering into 20- to 30-year solar leases.
A burden to bear
“We have already heard stories about consumers not being able to sell their homes or having to eat expensive leases because the new homeowner did not want to take on the lease burden,” said Jeff Small, legislative director for U.S. Rep. Paul Gosar, the House Republican from Arizona who spearheaded the letter.
“There are even more dangerous liabilities for customers that lease if these companies were to go under during that lease,” Small added.
Among other things, the letter calls for the creation of a “resource center” where homeowners can evaluate the risks involved with leasing solar panels before they commit financially.
An FTC spokesperson confirmed that the agency received the Dec. 12 letter but declined to comment further on the communications. The FTC’s Green Guides addresses the marketing of renewable energy such as solar but focuses on misleading environmental claims rather than misleading financial promises.
A comparison to the subprime mortgage crisis
House Democrats have also sounded an alarm. In a recent joint letter to the Consumer Financial Protection Bureau (CFPB), they warned that “easy financial terms, increased demand and a rapidly expanding industry” are the same factors that led to the subprime mortgage crisis.
U.S. Rep. Ann Kirkpatrick, also of Arizona, said she has received numerous complaints about solar rooftop leasing practices in the state and wrote in the letter:
At the core of my concerns are reports that solar leasing companies may be overstating the economic benefits of signing a long-term solar lease while failing to disclose important information during the sales process. For example, customers are quoted savings each month on their utility bills. However, who calculates those estimations and are they accurate?
One homeowner who met with Rep. Gosar shared a Solar City sales brochure that quoted inaccurate savings based on the customers’ current utility company rate increasing by 4 percent annually.
“This has never happened in Arizona,” said Small, Gosar’s legislative director. “The highest it has ever been was around 3 percent and usually it’s less than 1 percent.”
A Solar City spokesperson told the Arizona Republic that the company follows the law but will work with the CFPB and members of Congress to address concerns.
The CFPB did not return a request for comment. also requested comment from Solar City but has not yet received a response.
Tips for leasing solar
While the FTC and CFPB mull over the concerns raised by more than a dozen members of Congress, homeowners looking into leasing solar panels — as with any big investment — should proceed carefully. Here are a few tips:
Shop around — Get multiple bids so that you are not putting all your faith in the savings calculations of the one leasing company that is trying to win your business. 
Run the numbers yourself – The Department of Energy has a formula where homeowners can estimate the annual electricity production and electric bill cost savings for a grid-connected home solar system. 
Remember, it’s a long-term investment — You may not want to enter into a 20- or 30-year leasing arrangement if you do not plan on living in your home for the entire duration of the lease. If you choose to put your home on the market, prospective buyers may not want to assume the remaining cost of the solar lease. Inquire whether there are any early termination alternatives. 
No guarantee — Even the industry leader, Solar City, carries the following disclaimer at the bottom of its website: “Savings on your total electricity costs is not guaranteed.”
A spokesperson for the Solar Energy Industries Association did not return a request for comment.



Ray Boggs

3 years ago

Solar leases and PPAs are two of the most expensive ways to have solar on your roof, especially when compared to an outright purchase.

Today you can purchase a name brand, grid tie solar system for less than $2.30 per watt after applying the 30% federal tax credit. That translates into less than $11,000 for an average sized 4.7 kW solar system that can produce up to 600 kilowatt hours of electricity per month with only 5 hours of peak sunshine per day.

If you're considering a lease, not only will the system cost you far more in the end but you'll also probably have problems when trying to sell your home because what home buyer in his right mind will want to assume your lease payments on a used, outdated system when they can buy a brand new system with the latest technology and keep the 30% federal tax credit for thousands less.

Don't believe it ? Well then simply type the keywords "solar lease scaring buyers" into Google and you can read many accounts of homeowners and real estate professionals reporting difficulty when trying to sell a home with a 20 year solar lease or PPA attached to it.

Jane Leonard

3 years ago

Solar leasing company sounds good but as said, between the ups and downs the latter seems to be kept unveiled.

US Senator Demands Answers on Red Cross' Finances
Prompted by an investigation by ProPublica and NPR, Sen. Charles Grassley asks the charity to explain how it has used donations from the public
Citing an investigation by ProPublica and NPR, Sen. Charles Grassley is asking the American Red Cross to explain more clearly how it uses public donations, specifying how much money goes to services and how much to overhead. 
"The public's expectation for an important, well-known organization like the Red Cross is complete, accurate fundraising and spending information," Grassley, R-Iowa, said in a statement. "In reaction to the news reports on this topic, I'm asking the Red Cross to elaborate on how it calculates the facts and figures given to the donating public."
Americans typically look to the Red Cross whenever disaster strikes, giving generously. The iconic charity took in over $1 billion in donations in 2013.
In response to Grassley's request, the Red Cross said it is setting up a briefing for the senator's staff that will happen sometime later this month. "We welcome and look forward to the opportunity," Red Cross spokeswoman Suzy DeFrancis said.
Grassley's request was first reported by the Chronicle of Philanthropy.
At issue are statements made by Red Cross CEO Gail McGovern and echoed on the charity's website and in other published materials that "91 cents of every dollar that's donated goes to our services."
But that oft-repeated figure is not borne out by the charity's statements in annual reports and tax filings. These documents show that fundraising expenses alone have eaten up as much as 26 cents of every donated dollar in recent years.
After our inquiries last month, the Red Cross removed the statement from its website. The Red Cross said at the time that the claim was not "as clear as it could have been, and we are clarifying the language."
Grassley has long pushed for tougher regulations of nonprofits and has a history with the Red Cross. In 2007, he pushed through legislation that overhauled the governance structure of the charity, which was chartered by Congress over a century ago.
Grassley isn't the only one nosing into the Red Cross' operations. The Government Accountability Office, the investigative arm of Congress, is looking into the charity's troubled response to Superstorm Sandy, which hit New York and New Jersey in late 2012.
The GAO's inquiry, which was first reported by the Chronicle of Philanthropy, began last February after a request from the staff of Rep. Bennie Thompson, D-Miss., the ranking member of the Homeland Security Committee. Since then, the GAO and the Red Cross have been discussing the parameters of the study. The GAO says it plans to finalize its methodology "within the next couple of weeks" and then begin working on the inquiry itself.
The scope of the GAO's probe is expected to encompass more institutional questions, including "What are the nature and extent of the oversight to which the organization is subject, and is it sufficient?"


Health Expectancy

Life expectancy is a narrow way to judge quality of healthcare and lifestyles


If you have been to a medical college, you would have heard of ‘life expectancy’ many times over. People have misconceptions about this concept. During a lecture at Hyderabad, to a group of intelligent and educated people, I told them that life expectancy is only a statistical term and should not be equated with life span. One audience member, a chartered accountant, got quite upset and insisted that I was wrong in my understanding of the concept, that they were one and the same. Moreover, he thought that it was his specialty, since the ideas are oft-used in the actuarial field. A few days later, he called to say that he was mistaken, indeed.


Decades ago, I was surveying blood pressure among people, to see the effect of the environment on blood pressure, I used to go to my old village and later to larger cities.


What surprised me was that the majority of elderly people in that village had very little contact with doctors and hospitals. Many of them had not taken any drugs or vaccinations in their lives and they were apparently very healthy and working very hard. They could make do with what nature had to offer by way of herbal drugs for their minor ailments like our homebred cats and dogs do. I used to be curious when, on my daily walks, I used to see cats and dogs eating grass, but now I know that we could learn from them. Our villagers those days loved one another and helped each other. That is the true definition of health, i.e., enthusiasm to work and enthusiasm to be compassionate. I was curious to know more about it as until then, I thought (I was taught and made to believe as my seniors did) that unless one goes for regular check-ups and takes preventive drug ,treatments diseases could kill one at a very young age.


After a good amount of research, I found that aboriginal races like the American Indians, the Innus of Canada and our own forest dwelling forefathers, did not have any contact with modern medicine, neither did they suffer from any major illnesses as we do now. As per the records of those times available on leaves and stone inscriptions, the major causes of death were old age and predation. That was when I coined a neo-logism. Here I would like to introduce a new term, which may anger many people. “Health expectancy”—the number of years a newborn baby can live without the need for doctors and hospitals. Further thinking and study on my part revealed that this is the highest in our country. Later in life, I saw this phenomenon myself in the villages of Bihar and Uttar Pradesh. Then I hypothesised that health expectancy is highest in our country and many other poor countries, but lowest in the ‘developed’ West, especially USA. Many children there start on drugs right from infancy, with lorry-loads of all kinds of vaccines (nearly 30 vaccines are administered in the USA, in the first six months of life). The thought of those 30-odd vaccines trying to coax the poor 150 genes in the 9th chromosome that oversee the immune response in the body frightens me. I can understand one vaccine at a time cajoling the immune system to produce antibodies again the desired germ, but common sense tells me that 30 of them almost simultaneously nudging a gene might send those genes into a tizzy. Now, many scientists believe that one could avoid reductionist chemicals getting into the system as they are rejected by the human body’s intelligence. Douglas C Wallace, a professor of genetics, showed in his epoch making study using a highly sophisticated computer chip, the MIT chip, that the body throws those many of the drugs we pump into our body into the liver to get destroyed. The human body thinks that they are one among the new poisons. That is the basis of the famous ‘first pass effec’” in pharmacology. He also showed that this phenomenon does not happen with holistic herbal drugs (Genetics 2008; 179: 727). In short, health expectancy would be a good parameter for public health officials to depend on, rather than life expectancy in future. God save mankind from chemical poisons.


There are three types of lies—lies, damn lies, and statistics.” — Benjamin Disraeli


(Professor Dr BM Hegde, a Padma Bhushan awardee in 2010, is an MD, PhD, FRCP (London, Edinburgh, Glasgow & Dublin), FACC and FAMS.)


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