Consumer group asks state to investigate solar companies' sales practices

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Workers install solar panels on a home.

(AP Photo/Reed Saxon)

Consumer advocates are pressing Attorney General Ellen Rosenblum to investigate sales practices that they contend are designed to trick homeowners into buying or leasing solar panels.

The Washington, D.C.-based Campaign for Accountability requested the investigation this week after reviewing 58 consumer complaints filed with the Oregon Justice Department since 2012.

The group said the complaints showed "a widespread pattern of apparent fraud and abuse by solar companies," including consumers being deceived about the true cost of installing panels and promised energy savings that never materialized.

Daniel Stevens, the advocacy group's director, said the practices appear to violate Oregon's Unlawful Trade Practices Act. He has asked attorneys general in Florida, California and Texas to launch similar investigations.

"Solar companies often seem to target vulnerable populations, leaving senior Oregonians and those living on fixed incomes with higher monthly utility costs and loans that often exceed what they can afford to pay, plunging them into debt," Stevens claims.

The state of Oregon has never undertaken any systematic look at the rooftop solar industry, which is about a $40 million a year market.

Kristina Edmunson, a spokeswoman for the Justice Department, said the agency was reviewing the request for the investigation and the underlying complaints.

"For the majority of the consumer complaints, we have been able to resolve the complaint by working with the person who filed the complaint and the various companies," she said.

Solar usage has been growing steadily in Oregon. It provides about 1 percent of the total electricity used in the state, but is dominated by utility scale and commercial systems. There are about 10,000 residential systems in the state with a capacity of about 54 megawatts, according to the Oregon Solar Energy Industry Association. The group projects that total will grow tenfold over the next decade, driven by tumbling prices.

But the upfront costs of installing a residential system are still substantial - just under $23,000 for the average 6 kilowatt residential system in Oregon, according to the association. Financing can also be complicated as it involves federal and state tax credits, incentives from the Energy Trust of Oregon, and a utility billing mechanism that credits homeowners for the electricity they provide to the grid.

Lawmakers are currently debating a bill that would extend the state's residential energy tax credit program, which provides a tax credit worth up to $6,000 for rooftop solar systems. The credit is set to expire at the end of the year, but solar, environmental and labor advocates are asking lawmakers to extend it for an additional six years.

For years, one of the most popular ways of paying for a residential system was third-party financing, which offered consumers a low- or no-money down way to lease a system or make fixed monthly electricity payments.

But those arrangements are often ill-understood by customers and subject to potential abuse. Some states have banned them. Lawmakers and consumer watchdog groups have held hearings and petitioned the Federal Trade Commission and the Consumer Financial Protection Bureau to look into solar contracts, ban arbitration clauses and investigate claims regarding the costs savings of installing solar.

Jeff Bissonette, executive director of the Oregon Solar Energy Industry Association, said his group had looked into complaints filed with the Justice Department and the Oregon Public Utility commission, and found the numbers to be relatively low - lower than those being cited by the Campaign for Accountability. He said the state has strict licensure requirements, and installers need to be accredited to deal with state tax credits and incentives from the Energy Trust, which limits fly-by-night operators. Bissonnette also said that third-party financing is falling out of favor with both consumers and installers.

The letter to Rosenblum singled out one company: California-based SolarCity. It outlined several complaints filed against the solar giant by Oregonians who claimed they'd been misled about costs, tax credits and energy savings by the company.

SolarCity responded with a statement. "The solar energy industry is already subject to significant regulatory oversight and there are a host of laws that govern the offering of solar products and services. Our solar power purchase agreement and lease contracts tell customers the exact rates they are going to pay for solar electricity for the next 20 years, a level of pricing transparency that no utility in America provides."

- Ted Sickinger

503-221-8505; @tedsickinger

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