Solar Snake Oil There are several solar power companies, both local and national, that are misleading consumers. They are signing up new customers at an alarming rate into 20 year contracts. These contracts are known as PPA’s. PPA stands for “power purchase agreement”. These solar power providers frequently promise substantial savings with no upfront costs to attract customers and offer free equipment, installation, maintenance etc. It all sounds really good, but there is no free lunch as they say. Wikipedia defines PPA’s on their website:
https://en.wikipedia.org/wiki/Talk:Power_purchase_agreement These contracts are supposed to allow consumers and business to benefit from clean renewable solar energy without having to purchase a solar power system. These companies attract consumers by offering a low or even no cost solar power system, including, free installation, free service, free maintenance etc. The main Idea is that they will save money on the electricity produced by the solar power system. The solar power system is actually the property of the solar power company, which at this time is operating as an unregulated utility. The basic idea sounds good. No upfront costs, clean energy, low monthly payments (that actually increase every year). I almost fell for this myself. One problem with the scenario is that the consumer gives up quite a few things in exchange. The companies who are providing the use of their solar power systems get huge tax credits and incentives called: solar renewable energy credits also known as SREC’s. These tax credits and incentives could greatly offset the cost to the consumer if they were to purchase a solar power system. These savings can be as much as 50% off the purchase price.
The consumer could finance the remaining cost at today’s low interest rates and in a short period of time, the solar power system could pay for itself. One national solar power provider claims to be the largest of its kind in the USA. This company is called Solar City. They promote their services through two major, well known national chain stores in several states. I’m sure most people are familiar with Home Depot and Best Buy? The stores may not be aware of what’s going on. I would like to think that once these stores get wind of Solar City’s deceptive business practices, that they would sever their ties to Solar City. Solar City also uses network marketing, radio and television advertisements, door to door, telemarketing and pop up website ads and other efforts to gain a large share of the solar power market, which is growing rapidly. In Solar City’s network marketing plan, called Solar Ambassador, customers and non-customers can participate sharing the Solar City opportunity with friends, family, businesses etc. It’s a three tier payout for new customer referrals.
So if an ambassador gives a referral that signs a contract with Solar City, they get paid $250 for that contract and more if that referred customer also refers other customers and so on. I have no problem with free enterprise. But the problem as I see it is that this company and their associates are promoting their services in a deceptive and misleading fashion. In my case they told people that I had referred, that I had signed a contract when in fact I didn’t. They promised that I would save more than they actually quoted me in their proposal to me. They asked me to sign a document stating that my installation was complete and that it has been inspected and approved by the local electrical inspector. None of which is even remotely true. When I called the local inspection office I was able to reach the chief inspector. I explained my situation to him and he told me he was aware that Solar City was pulling a large amount of building and electrical permits for solar power system installations.
When I told him that Solar City had applied and paid for permits on my behalf and that I had never given authorization for them to do this, he was not surprised. He told me that Solar City is doing this so much that they actually caused a back log in the Howard counties permit tracking system. He also informed me that he had placed Solar City’s permits on hold and will not issue them any new permits until the company remedies the situation. Solar city has paid for these permits and in a lot of cases never completes the installation. This is likely because a fair amount of potential customers are not signing their contracts. This probably costs Solar City quite a bit as the county has a no refund policy on permits once they are issued. Companies like Solar city and other solar power providers are vying for customers as the Federal 30 % tax credit is due to expire at the end of 2016. They are pocketing massive amounts of federal funds, probably intended for consumers.
Currently there is no cap on these tax credits. The way the tax credits are administered, is that they go to the owner of the solar power generating system, in this case, companies like Solar City. There are several solar power companies offering the PPA’s to consumers and they are actually costing consumers dearly. Another notable company, Sungevity, operates out of Lowes home improvement stores. They have very similar marketing strategies. And they are all getting the federal tax credits, SREC’s and even $1000 currently offered in the state of Maryland. Some states have even higher local incentives. These companies are hungry for customers as the Federal tax credits are due to expire at the end of 2016. They are pocketing massive amounts of federal funds, most likely intended for consumers. But the way they are administered, they go to the owner of the solar power generating system, in this case, companies like Solar City, Sungevity and numerous others. Most solar power companies are offering the PPA’s to consumers and it appears that they are actually costing consumers dearly.
Some consumer complaints have suggested that these companies are lying to their potential customers about what they will supposedly save by using their service as their utility provider. And they are locking the consumer into a long term contract that can cause a lot of long term financial problems. The offending companies actually put a lien on the home. But they call it a different name in their contracts, but according realtors and mortgage consultants that I’ve spoken with, it is still a form of lien and falls under the same rules that apply to liens on real property. So when the consumer goes to refinance or sell their home, the lien needs to be removed somehow. So if the potential purchaser decides not to take over the contract, then the owner has to pay out the rest of the contract for something that will now cost them several thousands to remedy. Hopefully we can alert consumers to be very careful before signing up for something that will cost them dearly in the long run and get into a deal that is really too good to be true.
Solar City Reviews
Solar Snake Oil There are several solar power companies, both local and national, that are misleading consumers. They are signing up new customers at an alarming rate into 20 year contracts. These contracts are known as PPA’s. PPA stands for “power purchase agreement”. These solar power providers frequently promise substantial savings with no upfront costs to attract customers and offer free equipment, installation, maintenance etc. It all sounds really good, but there is no free lunch as they say. Wikipedia defines PPA’s on their website:
https://en.wikipedia.org/wiki/Talk:Power_purchase_agreement These contracts are supposed to allow consumers and business to benefit from clean renewable solar energy without having to purchase a solar power system. These companies attract consumers by offering a low or even no cost solar power system, including, free installation, free service, free maintenance etc. The main Idea is that they will save money on the electricity produced by the solar power system. The solar power system is actually the property of the solar power company, which at this time is operating as an unregulated utility. The basic idea sounds good. No upfront costs, clean energy, low monthly payments (that actually increase every year). I almost fell for this myself. One problem with the scenario is that the consumer gives up quite a few things in exchange. The companies who are providing the use of their solar power systems get huge tax credits and incentives called: solar renewable energy credits also known as SREC’s. These tax credits and incentives could greatly offset the cost to the consumer if they were to purchase a solar power system. These savings can be as much as 50% off the purchase price.
The consumer could finance the remaining cost at today’s low interest rates and in a short period of time, the solar power system could pay for itself. One national solar power provider claims to be the largest of its kind in the USA. This company is called Solar City. They promote their services through two major, well known national chain stores in several states. I’m sure most people are familiar with Home Depot and Best Buy? The stores may not be aware of what’s going on. I would like to think that once these stores get wind of Solar City’s deceptive business practices, that they would sever their ties to Solar City. Solar City also uses network marketing, radio and television advertisements, door to door, telemarketing and pop up website ads and other efforts to gain a large share of the solar power market, which is growing rapidly. In Solar City’s network marketing plan, called Solar Ambassador, customers and non-customers can participate sharing the Solar City opportunity with friends, family, businesses etc. It’s a three tier payout for new customer referrals.
So if an ambassador gives a referral that signs a contract with Solar City, they get paid $250 for that contract and more if that referred customer also refers other customers and so on. I have no problem with free enterprise. But the problem as I see it is that this company and their associates are promoting their services in a deceptive and misleading fashion. In my case they told people that I had referred, that I had signed a contract when in fact I didn’t. They promised that I would save more than they actually quoted me in their proposal to me. They asked me to sign a document stating that my installation was complete and that it has been inspected and approved by the local electrical inspector. None of which is even remotely true. When I called the local inspection office I was able to reach the chief inspector. I explained my situation to him and he told me he was aware that Solar City was pulling a large amount of building and electrical permits for solar power system installations.
When I told him that Solar City had applied and paid for permits on my behalf and that I had never given authorization for them to do this, he was not surprised. He told me that Solar City is doing this so much that they actually caused a back log in the Howard counties permit tracking system. He also informed me that he had placed Solar City’s permits on hold and will not issue them any new permits until the company remedies the situation. Solar city has paid for these permits and in a lot of cases never completes the installation. This is likely because a fair amount of potential customers are not signing their contracts. This probably costs Solar City quite a bit as the county has a no refund policy on permits once they are issued. Companies like Solar city and other solar power providers are vying for customers as the Federal 30 % tax credit is due to expire at the end of 2016. They are pocketing massive amounts of federal funds, probably intended for consumers.
Currently there is no cap on these tax credits. The way the tax credits are administered, is that they go to the owner of the solar power generating system, in this case, companies like Solar City. There are several solar power companies offering the PPA’s to consumers and they are actually costing consumers dearly. Another notable company, Sungevity, operates out of Lowes home improvement stores. They have very similar marketing strategies. And they are all getting the federal tax credits, SREC’s and even $1000 currently offered in the state of Maryland. Some states have even higher local incentives. These companies are hungry for customers as the Federal tax credits are due to expire at the end of 2016. They are pocketing massive amounts of federal funds, most likely intended for consumers. But the way they are administered, they go to the owner of the solar power generating system, in this case, companies like Solar City, Sungevity and numerous others. Most solar power companies are offering the PPA’s to consumers and it appears that they are actually costing consumers dearly.
Some consumer complaints have suggested that these companies are lying to their potential customers about what they will supposedly save by using their service as their utility provider. And they are locking the consumer into a long term contract that can cause a lot of long term financial problems. The offending companies actually put a lien on the home. But they call it a different name in their contracts, but according realtors and mortgage consultants that I’ve spoken with, it is still a form of lien and falls under the same rules that apply to liens on real property. So when the consumer goes to refinance or sell their home, the lien needs to be removed somehow. So if the potential purchaser decides not to take over the contract, then the owner has to pay out the rest of the contract for something that will now cost them several thousands to remedy. Hopefully we can alert consumers to be very careful before signing up for something that will cost them dearly in the long run and get into a deal that is really too good to be true.