For two years in a row, Rhode Island residents have been burdened with unprecedented electricity rate hikes as high as 47%. It’s no wonder solar installations are up 30% over last year, as more homeowners explore solar energy to lower and predict their energy costs.
Yet as the popularity of solar increases, so do bad actors – dishonest companies seeking to defraud hardworking homeowners. When this happens, it is the government’s responsibility to act and protect its residents. That is what the solar industry is experiencing: 20 state attorneys general suing over 40 U.S. solar companies.
As the CEO of Smart Green Solar LLC, I am intimately involved in this national trend, being on the receiving end of a lawsuit from R.I. Attorney General Peter F. Neronha.
This lawsuit occurred despite our company being rated within the top 5% of solar companies in the U.S., No. 1 in Rhode Island, having an A+ Better Business Bureau rating, a 4.7 star Google rating, and a net promoter score 35 points above the industry average.
(Editor’s note: The R.I. Office of Attorney General sued Smart Green Solar LLC in June, alleging that the company engaged in unfair, deceptive trade practices in sales and financing. The Superior Court case is pending.)
While no company is without flaws or humans who make mistakes, I believe the lawsuit occurred because we were an easy target, perhaps even a scapegoat. So how does the industry shift the attention of attorneys general to the actual bad actors in the solar industry so that reputable companies can continue to help homeowners?
First, we must educate homeowners on the three most common deceptive business practices so that consumers can alert their attorneys general when they encounter them:
Power production promises. When homeowners negotiate a lower monthly cost for their panels, some solar companies quietly downgrade the customer’s system. The payment will be lower, but the system will only produce 80% of the electricity the customer needs. The end result is a continued electricity bill on top of the cost of their solar system.
Pushing leasing over ownership. Buying solar panels provides the greatest return on investment for customers. However, some solar companies fail to offer a purchase option because they profit more from leases. Unbeknownst to the homeowner, their lease comes with a 2.9% [or greater] annual escalator. After decades of leasing and annual increases, customers don’t own their system and forfeit the 15 years of free power that solar buyers enjoy after payoff. Many customers don’t realize they’ve been lured into leasing until after the contract signing and have no recourse.
Unfortunately, lawsuits by attorneys general nationwide are actually encouraging companies to push leasing to avoid the tax credit issues cited in many lawsuits. When a customer leases their solar energy system, tax credits aren’t an option.
Rigid contract terms. It’s industry standard to offer homeowners a three-day contract cancellation window, after which a company begins preparing for the installation. Some customers realize shortly after that three-day period that their agreement is flawed. Unfortunately, many solar companies force homeowners to honor the contract, leaving them feeling victimized.
Many state attorneys general want to paint a narrative that the entire solar industry is flawed and corrupt. But it’s imperative that AGs conduct their due diligence and target the actual bad actors.
If you are a solar customer who has been deceived, your state attorney general is your path toward resolution. Telling your story will help them discover who the problematic companies are. Until their business practices are exposed, reputable, well-meaning solar companies will see their ability to help homeowners impeded.
As a local business owner with a customer-centric company built on the principles of discipline, integrity, accountability and loyalty, I rest in knowing that my company stands on a sure foundation. We will continue to put customers first and work each day to provide affordable, renewable energy to families struggling under the weight of soaring and unpredictable electricity bills.
Jay Gotra is the CEO of Smart Green Solar LLC in Providence.
