A dozen Republican lawmakers have asked the Federal Trade Commission to look into whether deceptive practices are being used to market federally subsidized solar panels.
The legislators said there was evidence that homeowners were entering into long-term contracts with solar panel companies, unaware that the solar panels were actually reducing the value of their homes.
“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 lawmakers, led by Rep. Paul Gosar, R-Ariz., wrote.
The lawmakers pointed to reports by Bloomberg and NPR earlier this year, in which homeowners entered into decades-long leasing contracts for solar panels without realizing that the contracts would have to carry over to any new owners. That forced the owners to substantially reduce their asking price when re-selling their home, since prospective buyers were wary about taking over the solar leases.
The lawmakers also expressed concerns that third-party leasing companies were overstating the potential energy savings from the panels and aggressively marketing them through zero-money-down deals.
An estimated 70 percent of solar panel installations are done through leases, according to the GTM Research. Homeowners can apply for tax credits of up to 30 percent of the cost to install panels through the 2005 Energy Policy Act.
Under the standard deals, the homeowner pays a monthly fee to the installation company, which owns the panels and gets the tax incentives for them. The homeowner gets the electricity from the panels, reducing the house’s power costs. The lease deals typically run 20-30 years and are tied to the home, so they must be taken up by any new owners.
“At the minimum there appears to exist a need for a resource center for consumers to weigh risks before making a financial commitment,” the lawmakers wrote.
A spokesman for the FTC did not respond to a request for comment by Monday evening. The FTC has issued guidances for solar companies to avoid deceptive practices, but those guidelines have focused on whether the environmental claims regarding the panels are accurate.
In addition to Gosar, the letter to the FTC was signed by: Matt Salmon, Ariz.; Trent Franks, Ariz.; Lamar Smith, Texas; Jeff Miller, Fla.; Cynthia Lummis Wyo.; David McKinley, W. Va.; Andy Harris, Md.; Mo Brooks, Ala.; H. Morgan Griffith, Va.; Ted Poe, Texas; and Alan Nunnelee, Miss.
