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What do fly-by-night roofers, contractors who never finish the kitchen remodel and solar installers have in common? Nothing, say solar sector representatives who are working to ensure the industry remains one with a satisfactory reputation among customers. As more companies get into the business of installing rooftop solar, the Solar Energy Industries Association (SEIA), the Federal Trade Commission (FTC) and other entities want to make sure consumers know how to choose a vendor and how to make good purchasing decisions.

In fact, the FTC recently held a one-day public workshop, “Something New Under the Sun: Competition & Consumer Protection Issues in Solar Energy.” The event, held in an auditorium in Washington, D.C., explored consumer education about payments, construction risks, local rules and other details to consider when buying rooftop solar. The FTC also invited the public to comment via its website or by mail.

The FTC has long had an interest in solar power, FTC Chairwoman Edith Ramirez said in her opening remarks at the event. The agency held its first workshop on the solar energy industry in 1977.

“That symposium looked at the emergence of new technologies, including photovoltaic arrays for generating electricity, and stressed the importance of competition and consumer choice,” she said.

Over the years, the FTC has held workshops and issued reports and occasionally updated its Green Guides, which offer consumers information about companies’ environmental marketing claims. There are also tips on the FTC website with headings such as, “Is Solar Right For You?”

The commission also takes action, Ramirez said, if there is evidence of a law violation. For example, in March, the FTC and the U.S. Department of Justice brought a federal court action to stop a telemarketing operation that allegedly made illegal robocalls promising consumers energy savings. The calls were supposedly an effort to generate leads to sell to solar panel installation companies, and the complaint did not involve rooftop solar companies. Still, Ramirez said, “It serves as a cautionary reminder to all businesses to exercise care when selecting third parties to assist with their promotional efforts.”

During the week of the FTC event, SEIA posted on its website new standardized disclosure statements: the SEIA Solar Power Purchase Agreement Disclosure statement and the revised SEIA Solar Lease Disclosure. The documents are supposed to make it easier for consumers to compare solar offers from competing installers, as well as to understand the terms of a proposal before entering an agreement.

Dan Whitten, SEIA’s vice president of communications, says these efforts are important because the industry celebrated the 1 millionth solar installation in the U.S. and expects to hit 2 million in only two more years.

“This rapid growth would not be taking place if not for our customers’ routinely sharing their positive experiences with their friends and neighbors, and it won’t take place if we are not taking care of our customers,” he says. “Customer satisfaction is essential to our industry’s success, and it’s imperative that residential customers are protected, educated and armed with the best information possible so that they can make choices that are right for them and their families.”

Whitten says the association strives to make the process of going solar as straightforward and transparent for customers as possible. SEIA members are bound to follow the SEIA Solar Business Code, a national code of conduct for the industry that provides rules on advertising, marketing, consumer interactions and contracting. The code covers topics such as contract language, accurate and factual advertising, consumer privacy issues, renewable energy certificate claims, and others.

Whitten says it is too soon to tell how effective the new standardized forms have been.

“We are trying to make sure as many people as possible have access to them now,” he explains. “Our companies have not had time to incorporate the forms into their standard package of materials, though leading SEIA members have pledged to do so by the end of the year.”

Some states are offering their own tools for consumers. The New York State Attorney General’s office posted on its website “Going Solar: Tips and Considerations for Homeowners,” which explains the difference between direct purchases, solar leases, and power purchase agreements and includes definitions of some key terms and details to consider before entering an agreement. The Massachusetts Attorney General’s office posted a solar consumer advisory with tips such as “know your electricity usage,” “be realistic about savings” and “get multiple estimates.”

Solar experts say these helpful hints and other efforts reflect the industry’s growth, not any influx of complaints.

“There are questions when any industry is growing of how people do their marketing, how they get their contracts and all these issues of how you interact with consumers,” says Robert M. Margolis, senior energy analyst for the National Renewable Energy Laboratory (NREL). “The industry is working to figure that out as it goes along.”

Margolis, who spoke at the FTC event, says one of the key questions is whether there are unique features in solar that require different sorts of actions. He argues that the current tools for consumer protection are sufficient and the industry should follow the current laws and rules.

“Solar is a young industry, and there are always some potentially bad actors in any industry,” he says. “The U.S. Department of Energy has tried to stay ahead of it.”

Margolis says NREL played a significant role in consumer protection efforts with the Solar Access to Public Capital Working Group, which in 2013 developed standard contracts that are designed to help lower transaction costs and make it easier for consumers to get financing. The group consisted of solar industry stakeholders, including developers, law firms, financiers and analysts with expertise in solar energy projects. The customizable contract templates are meant to improve consumer transparency, increase private-sector investment and lower the cost of solar energy to end-users.

“Any contract can be confusing,” notes Margolis. “If you are signing a 20-year power purchase agreement, what happens if you move or if somebody dies? The standard contract they came up with tries to make it more standardized and the language reasonably clear.”

Clear language is important, as is truth in advertising.

“One look at many of today’s online solar ads, and red flags immediately go up,” says Vikram Aggarwal, CEO and founder of Boston-based EnergySage, an online marketplace for solar. “For example, ads that offer ‘free solar panels from the government’ simply mislead consumers into thinking that signing a 20-year solar lease contract has no costs associated with it.”

Aggarwal, who also spoke at the FTC event, says transparency and consumer education will help the industry. Empowered consumers can make better purchase decisions, and there are some ways to achieve this.

“As an industry, we should work toward a standardization of quote formats across all companies in order to take the guesswork out of comparing solar offers,” he says.

Also, Aggarwal says, solar consumers do not want to be approached by a door-to-door salesperson or by aggressive telemarketing. “Solar companies and lead generation companies should abide by the National Do Not Call Registry,” he says.

There will likely be more endeavors ahead to inform consumers, says Richard Sedano, principal and U.S. programs director for the Regulatory Assistance Project in Montpelier, Vt. On the federal level, the FTC can raise awareness about consumer issues, but it is also up to the various offices in state governments to coordinate efforts that help protect consumers. The state utility regulator can establish rules for interconnection, the state energy office can create an environment where customers get information about energy purchases, the attorneys general can use their existing consumer protection powers to enforce rules, and licensing boards can make sure tradesmen are certified where they need to be.

“There are multiple offices in state government that have an interest here,” he says. “There is not going to be one entity saying, ‘I am going to make sure solar is deployed well.’”

Sedano, also a speaker at the FTC event, hopes the FTC can coordinate efforts with the National Association of Attorneys General (NAAG). In fact, the NAAG included solar leases and consumer issues at a 2015 meeting.

“I think there is going to be a lot of attention to this, and there is going to be sincere effort from some associations and some states,” Sedano says.

 

Nora Caley is a freelance writer based in Denver.