Energy
Andrew Follett
Energy and Science Reporter
2:42 PM 07/19/2017
The consumer group Campaign for Accountability (CFA) asked the Federal Trade Commission (FTC) Wednesday to investigate rooftop solar companies for misleading sales practices targeting senior citizens and other vulnerable populations in the same manner sub-prime lenders did before the 2008 financial crisis.
CFA sent a letter to the FTC after reviewing consumer complaints about companies that install rooftop solar panels. The letter states that solar companies have engaged in false and misleading behavior to market and sell panels and asks the FTC to investigate.
“We see some tactics similar to 2008 sub-prime lenders,” Daniel Stevens, executive director of CFA, told The Daily Caller News Foundation. “These companies will go out and find seniors or low income vulnerable populations. They can easily convince them to sign up.”
Stevens said that in one case a solar company held a free dinner to lure senior citizens into a complex contract they couldn’t understand.
CFA reviewed more than 1,200 complaints to the FTC that showed a widespread pattern of apparent fraud and abuse by solar companies.
The complaints state that solar companies deceived consumers about the true costs of installing solar panels by luring them in with low price quotes that later proved to be false, required them to sign confusing contracts, and promising energy savings that never materialized. This often led to consumers being forced to pay the companies large amounts of money.
“When they sign a 20-year contract, the financial situation doesn’t work out,” Stevens said. “They end up paying more for energy than they paid for the solar panels. The consumers are being hurt.”
Seniors and the poor are more vulnerable to issues like this because they tend to spend a higher proportion of their incomes on basic needs like energy while living on fixed incomes. Elderly individuals and the poor are much more likely to sign a complex contract without understanding that it may require them to pay a large amount of money.
“In one situation we saw, the person who purchased the solar panels died,” Stevens said. “Somebody who’s father had passed away was trying to pay off the remaining contract. The company wanted $25,000 to cover the costs of the panels.”
“These contracts are structured in a way so the consumer doesn’t know if it will be in their financial interests to sign up,” Stevens said. “They can’t tell what they’re signing up for in some cases. A lot of this is variable. They don’t know how much sun will hit their roof during most periods.”
Solar subsidies end up hurting the poor 1.4 to four times more than the rich, according to a study by the National Bureau of Economic Research.
“Subsidies are one thing that causes solar companies to do this,” Stevens said. “Consumers will set a rate at which they have to pay the company. If the panel doesn’t produce enough electricity to cover the costs of installation, the consumer has to pay for it.”
Solar subsidies were so lucrative that solar-leasing companies installed rooftop systems, which run at minimum $10,000, at no upfront cost to the consumer. Stevens says that the consumer can end up paying thousands of dollars in hidden fees buried deep in the contract.
“A lot of these consumer complaints indicate bad practices are actually happening,” Stevens said.”Consumers are reporting in these complaints that they’re getting scammed.”
The FTC hosted a public workshop last summer about consumer protection issues in solar energy. The workshop concluded that solar leasing contracts that contain confusing wording about energy tax credits and falsely promised saving on utility bills. Some contracts effectively made consumers unable to sell or buy homes that had solar panels installed.
“The FTC can enforce the law,” Stevens said. “If they conducted an investigation and find that these companies are misleading consumers, they can hold them accountable for that. The FTC has said they’re interested in looking into this.”
Stevens said that the threat of an FTC investigation could force rooftop solar installers to enact reforms, such as simplifying contracts or publishing example legal documents. These reforms could make it much harder for fraudulent behavior or unethical business practices to pay.
Solar and wind power collect 326 and 69 times more in subsidies than coal, oil, and natural gas, according to 2013 Department of Energy data collected by Forbes. Green energy in the U.S. received $13 billion in subsidies during 2013, compared to $3.4 billion in subsidies for conventional sources of energy and $1.7 billion in subsidies for nuclear, according to data from the Energy Information Administration.
Even proponents of solar power recognize its reliance on subsidies. Without high net metering payments, rooftop solar “makes no financial sense for a consumer,” Lyndon Rive, CEO of SolarCity, told The New York Times last February.
Send tips to andrew@dailycallernewsfoundation.org.
HT/TA
South Miami passed a new law on July 18, 2017, requiring all new homes built in the city to have solar panels, the first such measure in Florida.
http://www.miamiherald.com/news/local/community/miami-dade/south-miami/article162307863.html#storylink=cpy
I’m surprised Seattle and Portland haven’t done the same.
How many days of Sun do you get in Seattle?
That’s not the point Jean. You’re just knit picking 😉
Solar savings estimator
Average home in South Miami
Estimated savings
Over 20 years……….. after solar purchase
………………….$1,000
Do an NPV calculation on this with a reasonable discount rate & I bet that number drops to < $300. A whopping ~$15/yr or a little over $1/month…. looks like the only one who really wins on this is the solar company
That assume you install it when new, or you just you re-roofed; otherwise, it doesn’t pencil out at all.
That’s assuming that the big increase in hurricanes doesn’t destroy the roof and the panels before the 20 years is up.
/sarc?
I’m surprised it is that much. I have run the numbers on this myself. Payback without subsides is 65 years for my house in RI. But people are putting these nasty looking things up all over the place.
Sorry, but that’s just nonsense.
I own a solar plant in CA and sell power through a grid-tie agreement with PG&E. The system, with battery backup and a 15kW propane backup generator cost ~$80K in 2009. It’s costs we fully recovered in 2015 and it’s warranted through 2029.
The net savings on the plant is very obvious. Prior to installation my electric bill was ~$600/month. It’s now ~$1800/year. The actual savings realized on this plant will be roughly $77,000.
BTW, I didn’t install a solar plant to protect the world from my carbon footprint; I did it for financial reasons and also because the property served by the plant is remote and subject to extended outages, some lasting as long as 4 weeks.
This isn’t a defense of unscrupulous solar sales-critters, of which there are many. However it is simply untrue that a correctly designed solar plant will only save an owner trivial amounts of money. Sure, you can sign a bad contract, no way to stop you from doing it. but that would be sort of stupid wouldn’t it?
In other words, Bartleby, the money, via conventional power rate surcharges/taxes to pay for your personal enrichment came out of the hard-earned money of citizens of CA, most of whom are much less well-off than you are.
Solar is a SC@M.
Janice writes
How do you figure? People use power and pay the power company for it. The power company in turn buys the power from the generating companies and in this case buys some from Bartleby. How is Bartleby taking money from others?
This pretty much guarantees that the cumulative intelligence of South Miami will trend downward over the next several decades… Actually I’d like to see if this holds up in court, since it can be construed as a “taking” for anyone that already owns a lot or parcel in South Miami, or for a person who materially wants to “rebuild” on an existing footprint.
Moderator the Security Screen Panel is back with a vengeance time to confront Word Press again.
Reply: Someone has to tell me what that means and suggest a course of action. Use the contact form.
The amount of energy produced by a PV system is strongly affected by site location. The roof slope needs to be oriented toward the south. The number of houses oriented in the proper direction is a small fraction of the total new houses built. For example, if your roof peak runs north-south, you get a choice of mounting your panels to work either in the morning or the afternoon, but not both. Installing panels on both slopes nearly doubles the number of panels needed to actually produce the amount of power they would if properly sited.
Another problem with the solar people is that they totally ignore the FTC Do Not Call Registry. They use robot dialers to target telemarketing calls at senior citizen homeowners.
Although I have been on the FTC’s Do Not Call Registry (which appears to be totally ineffective) since 2003, I was getting up to 30 calls a month from solar telemarketers. I was finally able to get the NoMoRobo call blocking service, which screens out almost all of them.
I talked to a number of the telemarketers who were setting up appointments. I told them that, because I didn’t know them, I wanted to meet them at a nearby Starbucks before letting them come to my house. None of them was willing to do that–they all wanted to get into my house.
The telemarketers always refuse to give their California contractor’s license number over the phone. They say they will provide it when they come to the house. That’s because they want to get into homes, with no one else around, to pressure elderly homeowners into having work that costs more than legitimate contractors would charge. And chances are that the quality of the work won’t be very good either.
The caller ID phone numbers are “spoofed.” If you call back you get a message saying the number is not in service. So it doesn’t do any good to report them to the FTC, and without the contractor’s license number you can’t identify them to take legal action.
Here’s the link to Nomorobo call blocking:
https://www.nomorobo.com/
Too bad it only works on VoIP land lines and not copper.
to me spending 25,000+ to get 10,000 worth of electricity doesnt seem like a good deal?
Why, O, Why, with such and abundance of energy resources, do we have any subsidies on any form of energy in this country.
Because the IPCC has manipulated climate science in order to support their reason to exist. As a result, fear based propaganda demonizing CO2 works because what you are told to fear ostensibly has a scientific basis. Few have the ability to see through the fog of distorted science and most who do don’t bother to try and just accept what the ‘experts’ say because it all seems too fogy to comprehend.
The future will look back at these times and wonder how the rules of science allowed such a broken view of the climate system to persist for so long. This future is the inevitable salvation for climate skeptics since the scientific truth as dictated by the laws of physics will always win in the end. Hopefully the lesson learned will be to never again allow politics to dictate science.
The only “subsidies” that the fossil fuel companies get is a form of depreciation, similar to what every other company in the country gets.
If I put up solar here in northern California, I would have to chop down 50 to 100 redwoods.But first I would need a timber harvest permit, probable cost over $10,000. The loss of tree capture and storage of CO2, the costs (water and cleaning extra), and twenty year life of the panels, would result in losses all around to my pocket, the environment, and peace of mind. It sounds like something that California would pass a law to command my compliance.
Elon Musk of Tesla Motors I believe bought out Solar City, one of these flim-flam outfits.
I heard that Florida dow not allow net metering – any power being put on the grid has to be controllable by the grid operator. It was one reason for the very few solar panels in the Sunshine State.
I was wrong about Florida – they require net metering, and at retail rates. Paying a solar panel owner retail rates for their contribution to the grid (exceptions are usually that peak received power can only have its cost offset by peak contributions) is outrageous – that power is not worth even the wholesale rates that are paid to reliable , grid-controllable power providers. Dumping power on the grid that isn’t needed results in reliable grid power providers having to run at lower capacity, which increases the cost of their power, which must be paid by the consumer. Net metering amounts to continually subsidizing solar power panel owners. The Feds provide tax breaks of up to $6,000 for a rooftop system of 6KW, as I recall, and that more than pays for the panels. The owner then needs to pay for the inverter and the installation. NO way that can possibly cost any $25,000. Or even $15,000.
Nor would such a system contribute much. 6kW is 1/3 what it takes to run a 5-ton AC unit.
Keep in mind that these are ‘peak’ ratings derived under specific conditions. From the link:
https://us.sunpower.com/sites/sunpower/files/media-library/white-papers/wp-understanding-solar-system-ratings.pdf
“Standard test conditions are defined as follows:
• 1000 W/m2 solar insolation
• 25 °C solar cell temperature (which assumes roughly 0 °C ambient temperature)
• absolute air mass of 1.5”
The condition that is not listed is an insolation angle of incidence of 90 degrees (equivalent to directly overhead for a horizontally mounted panel).
Once you vary from ideal conditions, the power output, of course, declines. Having said that, I can’t imagine many, if any, locations that meet the “ideal condition’ for any length of time, if at all. For Florida, the 0C requirement is a show stopper but, the 1000 w/m2 may be achievable when the sky is cloudless and the sun is directly overhead.
In addition, Florida has added a new law to the State Constitution that prohibits local property appraisers from including solar panels in the value of the home for tax purposes. I think that is a good idea and keeps an increase in property tax from being a detriment to adding solar panels if one so desires.
“Step right up, ladies and gentlemen, and gaze upon the wondrous creations here before me…”
Another problem is PACE loans. Info here https://www.housingwire.com/articles/38245-heres-the-controversy-surrounding-pace-loans
These sit in front of the first mortgage, like a tax lien. Often loaned at rates much higher than the mortgage, they can add $400 or more to a monthly payment, and if you don’t make the payment, well, there goes your house. It’s a feel good program for green energy, but the payoff if energy savings often doesn’t match the monthly payment, and now you have a lien on your house and you may not be able to sell it.
I didn’t notice any mention of liens being applied to homes with solar panels on them. I thought that was standard practice since the company is putting thousands of dollars on the roof, thus they put a lien on the property so that you can’t sell it. Surprise! You didn’t know there was a lien on the property? If you are underwater on your home or just trying to get out of a house that doesn’t fit your needs, if you have solar panels installed, you may have to pay off the lien before you can sell the house. Last I knew, you couldn’t get a mortgage to buy a house that had liens against it, so your options to sell are limited to cash buyers only. Seems like another “hook” in the real estate scam game to me, but maybe I am just naturally paranoid. Cash only houses generally end up as rentals, so people with lower incomes can’t buy to get out of rentals, they’re stuck.
To be fair, this is a problem with scamsters, not solar panels themselves. The lure of clean renewable energy is just the bait used to hook the victims. If it weren’t solar power it would be something else.
Suggested answer to those telemarketers: Just-announced projected sea level rise puts the house under water and worthless for long-term solar investment.
Alternative answer: I’m purchasing carbon credits instead. Some callers don’t know what carbon credits are.
One of my favorite ploys before NoMoRobo was to ask if they have any elderly relatives. When they said Yes, I asked: Do you like them? When they said Yes again, I asked: How would you like it if people kept calling them trying to rip them off?
It appears as if free enterprise really is not so free for the customers in a crony capitalism situation. Life is tough. It’s even tougher when you’re stupid.
There are always those evil people who want to take advantage of the elderly and poor. They will get their reward.
If only.
Both in the US and certainly the UK there are companies which will happily exploit the elderly and inadequate. Government and charities do far too little to protect their interests.
To stop these parasites we do need legislation – ensuring they have taken independent advice or agreements become null and void would deter most companies.
We also live in an era of cheap credit with limited or no effective check on the ability of the consumer to pay. In the UK the current problem is in the way new cars are financed.
As all these activities are driven by excessive greed (different from capitalism). We need to ensure that penalties are effective for those who abuse trust, and the banks structured so that if they go bust they are not bailed out by the taxpayer.
There’s only so much you can do to protect people from themselves, without taking freedom away from everyone.
That looks like Anthony’s house in the picture.
That’s what I thought. Those panels are probably charging his electric
golf cartrunabout.Ya mean, buyer beware? Just like every other purchase?
Is there a Fannie/Freddie equivalent servicing photovoltaic and windmill contracts?
Seems like everyone is ignoring the hidden costs of having an expensive solar panel and battery backup placed on their home. As an example, when I retired I had time to re-landscape the front of my home. Only spent about $2,500 in materials and greatly improved the “Curb Appeal” of the home. The next spring the County assessor made his annual rounds and latter that summer I got my “revised” assessment, $10,000 had been added to the valuation of my home. That added ~~$250 a year in taxes, $20 a month on my mortgage payment for the required Tax escrow account.
Here is what is going to happen to all of these new solar panel owners. The assessed value of the home is going to be increased. A $30,000 increase in value would be about a 10 – 20% increase in assessed value and about a 10 – 20 % increase in Taxes. Then the Insurance company is going to look at the fact that your home is worth more and that you may carry “Replacement Value” coverage. You now get a 10 – 20% increase in your insurance. That totals between $100 and $200 more in monthly payouts to save $100 – $200 on your electricity. Thus you are not going to break even ever.
So, you say it is not going to happen where you live. Think again, any competent underwriter is going to realize that they can collect a larger payment for that $30,000 you added to the value of your home. In CA and FL they are forcing new homes to come equipped with panels. That means that right off the bat they are going to be paying for these in Taxes and Insurance And for the 30 years that they are paying for their home – even though they will need to buy a replacement every 10 to 15 years. There is another $100,000 that could have been added to your IRA and made your retirement much easier. The fact that states are forcing new homes is also going to speed up the awareness of Tax collectors and Insurance companies of the need to include these in their rates.
Also there is the needed maintenance which easily is going to be about the same amount as you spend on Furnace and AC maintenance – another $250 a year, Plus the expense of needed cleaning or the loss of efficiency if you don’t.
Do some calculations.
For the last 50 years I have calculated the value of adding a solar collector on the roof compared to investing that money in S&P. With all factors considered it has always been a loss to invest in Solar. The fact that I invested that money has made my retired life very easy.
Usur, great valid points. Reminds me of my car insurance. I had a 15 year old Nissan Maxima not worth $2000. I loved the car, but the Maxima is known for higher insurance claims (insert reasoning here). I have a clean record. My buddy with a brand new $60K Acura MDX was paying $800 less for insurance, I can only assume due to less claims on this type of vehicle. Point being, just like cell phones, it is not the cost of the phone itself, you need to look at the surrounding maintenance, replacement and liability costs. It’s the monthlies that always get you, they always want you on the monthly payments.
{After writing the below, I’m inserting this caveat here: DO NOT READ THIS UNLESS YOU LIKE “HUMAN INTEREST” STUFF — No, I’m not deleting it; it helped me to write it. Thank — you — WUWT for helping me cope with “life”!!!!}
I encountered the solar door-to-door scammers in Salinas, CA in 2015. As the two perky, fresh-faced, 20-somethings in royal blue polo shirts strode up my front walk, I stepped outside and told them quietly but sternly that they were pushing a scam based on a lie about human CO2 and I was not interested — at all.
Instead of just turning and leaving, they wanted to ARGUE with me. That makes for lots of sales. Aggressively arguing with your customer.
“You are just trying to fool people into buying your product,” I called out (hoping to alert my more gullible or ignorant neighbors) as I went inside and firmly shut the front door behind me.
And their companies are going bankrupt! Yay 🙂
But, you know what? I saw recently in a case I’m familiar with that one of those sales people used that experience to land a really good high-tech “Lead Sales Executive” job — with no college degree or relevant technical ed or expertise. At. All.
Aarrrgh. I should be happy for them, right? I’ll try. It’s been a rough year as I finally have come to realize — really, really, realize — that my 7 years of college and 3 degrees (Management, Marketing, Communication; Computer Science-Business; Law) are WORTHLESS in the job market. On the other hand, if you are young, very pretty (especially if you are kind of sleazy, too), and pushed the solar sc@m well, guess what you get? A great job as a “Lead Sales Executive.”
I will be cleaning houses. Oh. Well.
Life is difficult when you have scruples. I have often remarked I could be a millionaire many times over if I just didn’t have scruples. There are millions of people that could easily be taken, without you ending up in jail. If only you lacked a conscience and your life was completely about the accumulation of money from the foolish and naive.
I used to clean houses. It’s at least honest work and there’s continual job security! While sometimes I would get frustrated at the messes people made, I’d remind myself that messes were why I had a job.
Thanks, Sheri, for your support. I wish I had your positive attitude about cleaning — ugh, ugh, and double UGH.
Take care.
Janice
Janice,
I have been an avid reader of this site for several years with an occasional comment here or there. Having said that, your comments are usually a breath of fresh air and I have noted the many times you reached out to other regular contributors with a word of kindness, encouragement, or condolence, when needed. If my impression of you is correct, and I believe it is, the world could use more people like you.
I am reminded of a saying from my maternal Grandmother who hailed from Rocky Mount NC before moving to Charleston SC in the 1930’s where she met, and married, my Grandfather. Upon learning that I had performed a ‘good deed’, which could be as simple as being kind to someone in need of kindness, she would remark that I had just earned “another star in my crown”, a reference to the time when I will meet, and be judged by, St. Peter.
With this in mind, you may have a serious problem because your crown, filled with so many stars, may be too heavy to wear. But, no worry, if I beat you there I will be proud to help you carry it.
This is because we are not judged by our job, our income, or, thank goodness, by whether we have solar panels. We are judged by our good works and I imagine there is no shortage of those recorded in your book.
I’ll conclude with another thing that she taught me that has served me well in life; “a little bit of sugar goes a long way.” You are obviously a very sweet lady and I imagine that you are loved and appreciated for that much more than you realize.
Ray in SC
Dear Ray,
You just added another star to that crown of yours for that very gracious letter of comfort and encouragement to me. And your grandmother smiled and smiled (I think God lets our loved ones in Heaven see the good things that happen to us).
How kind, how very kind of you to take the time. Today has been especially hard. I guess that’s why I let loose up above *blush.* When a woman at yet another “sorry, your experience and skills are not what we are looking for at this time” job today told me she was sure I would soon find a job (“You present yourself so well”) I had to hurry out the door as the tears started streaming down my face. If she only knew how little my natural abilities (with sales/communication) are worth in the eyes of the job market, she would not have said that (something about that just broke my heart for some reason). It’s just gone on so long….. so many years….. . I’m so weary.
But, YOU (thank you so much!) reminded me that it is my worth in God’s eyes that matters. We live for an audience of One.
I started this thread full of disappointment (and shameful envy). Thanks to you I have moved along toward acceptance and peace. No hope (short of heaven 🙂 ), but, acceptance and peace are very good!
And, you know what? In spite of it all, as one of my favorite movie lines says, I like me. (John Candy in “Trains, Planes, and Automobiles”). And “it is well with my soul.” It is well, I am quite certain, with your soul, too, Mr. Ray.
With so much gratitude for your kindness,
and with admiration for your fine character (and your wonderful memory — you noticed and remembered me and my comments! 🙂 ),
Janice
P.S. A song for you (music below lyrics, in video):
“Light Your World”
For little Roy. 🙂
Who hands out bouquets — like the one you handed me today. #(:))
Light Your World (performed by Newsong)
(youtube)
I see a lot of FUD above. Here are the actual numbers from the system I have installed at my house in Australia.
Nominal system size 5 kW. Cost to me $6800. Subsidy (paid direct to installer) circa $4000
Actual performance over the 7 months so far exceeds the estimates from one of the more technical on line estimators, by about 20% (I used weather from a large and unpleasant city that has smog type issues). Over a year it will generate 5963 kWh, according to the calculator. Of that I will use 600 kWh directly. The rest is fed in to the grid, at 14 c /kWh
However, obviously we use electricity when the sun isn’t shining, and that is 1000 kWh per year, and cost me 24 c/kWh
I also pay $500 per year in fixed costs
So, my total cost per year is 1000*.24+500-(5963-600)*0.14, =-$11. For free electricity.
If I didn’t have the solar I’d be paying something like $592 per year for electricity, so a crude rate of return after tax is 9%, a number I’d be pleased with from my other investments.
Yes i have ignored the finite life and repair costs for the installation. At my other off grid house I have 25 year old panels that still produce >90% of their (pathetic) rated capacity,
$4,000.00 + ($.14/kwh * 5,363kwh * ) = $4,000 one-time plus $751.00/year of: Other People’s Money
Congratulations on cannily taking advantage of the solar sc@m. Hey, you didn’t invent it (big grin – -shrug). So, since you are only taking advantage of a sc@m set up by the enviro-Madoff’s of the world, you feel just fine about it. Money. You serve Money instead of Truth and right.
Janice your approach and your sums are wrong. If you check the AEMO dashboard you can see the wholesale price for generated electricity is around `10 c/kWh, why should I not get that? Secondly, I pay more for my electricity that I draw than if I did not have PV, and I pay a higher connection fee per day.
If I subtract out the those differences, and work on the full cost of the installation ,the crude return drops to 4%, which is not especially good but beats most safe investments after tax.
Greg,
Just wait until your property tax goes up because you added “value” to your home. You should also check with your insurance company to make sure you have enough coverage for the new solar panels. If not, then your premiums will go up. Those two things may eat up all your savings.