Uncovering the Hidden Challenges of Rooftop Solar Installations
In the realm of renewable energy, the solar industry is currently experiencing a turbulent period. Over 100 solar companies have filed for bankruptcy this year, causing tens of thousands of installations to be delayed and leaving homeowners in a state of uncertainty.
This industry-wide crisis has led to a plethora of issues for solar panel owners. For instance, taxpayers who have acquired a solar panel system often receive incorrect tax information from salespeople. Adding to this, if a case under the Holder Rule is filed, the homeowner may be entitled to a full refund of any payments made on the loan, cancellation of the remaining loan balance, and compensation for attorney's fees.
Southern California attorney Kevin Kneupper and his associates receive between 50 to 100 calls per week from frustrated and angry solar panel owners who cannot obtain service. Kneupper's consumer protection law firm is one of the few that have concentrated on the financial tragedy in the solar industry.
Leasing a solar system, which is not a good time for potential customers due to the high number of solar companies filing for bankruptcy, typically costs home sellers thousands of dollars. This is due to the potential issues with buyers not wanting to continue the lease agreement or dealing with the expense and repairs needed to remove the panels.
Moreover, because of the devious ways some contracts have been written, it may be difficult to find a lawyer to take a case, and ideally, if a lawyer does accept the case, it will be on a contingent fee basis, where the attorney is paid only if they win.
Many homeowners who leased solar panel systems were told that the value of their home would increase with the addition of solar and that maintenance would be provided by the dealer for the life of the system. However, this is not always the case, as some companies have been known to make gross misrepresentations and omissions regarding potential tax credits and benefits.
If a solar panel installer goes out of business and doesn't honor the warranty, a breach-of-contract claim can be brought against the lender that financed the purchase or the company that bought the debt, under the Federal Trade Commission Holder Rule. Furthermore, a lien might have been filed against a homeowner's property, and one of these companies may try to foreclose if the homeowner is unable to pay, making getting a lawyer involved immediately critical.
When leasing solar panels, key risks and red flags to consider include the lack of ownership of the system, potentially lengthy lease terms, penalties and hidden fees, and the financial impact if the leasing company fails or if state policies change. Since leased panels remain the property of the leasing company, you do not gain a home asset or increased resale value. Lease contracts often span 15 to 25 years but may include clauses that let providers raise rates, impose penalties for missed payments, or charge substantial fees for early termination or buyout.
Additionally, some state-level policy risks exist. For example, in California, proposals and political actions threatened to break or modify existing solar contracts and reduce buyback credits, which could harm consumers financially and reduce property values if solar systems become less valuable in a sale. This highlights that regulatory uncertainty could impact the financial benefits of leased solar panels.
Choosing a leasing company requires caution. It is critical to verify the company’s reputation and financial stability, as leasing through an unreliable or unethical provider risks service interruptions, unexpected cost increases, or loss of benefits. Independent reviews and a provider’s track record are essential factors.
Other considerations include potential complexities around tax credits and ownership transfers. Lease buyout options can be costly and may require repaying tax credits, adding to the expense if you try to exit early. The looming expiration of federal solar tax credits at the end of 2025 also adds pressure and uncertainty for new solar contracts.
In summary, leasing solar panels carries risks related to long-term contractual obligations, lack of system ownership, financial penalties, company reliability, and evolving regulatory frameworks. Carefully review lease terms, assess provider reputation, and understand state and federal policy impacts before deciding to lease.
Dennis Beaver practices law in Bakersfield, Calif., and welcomes comments and questions from readers. Predatory financing, false claims, high-pressure sales tactics, subpar installations, negligent maintenance service, refusal to honor warranties, and gross misrepresentations are common practices in the solar industry. More than 17,000 jobs have been lost in the solar industry due to company bankruptcies.
- The turbulent period in the solar industry has led to numerous issues for homeowners, such as incorrect tax information from salespeople and the potential for financial tragedy when solar companies file for bankruptcy.
- Leasing a solar system can be risky, especially during this period of instability, as it typically costs home sellers thousands of dollars, and it may be difficult to find a lawyer to take a case if the leasing company fails or if state policies change.
- Regulatory uncertainty and evolving policy frameworks can impact the financial benefits of leased solar panels, making it crucial to assess state and federal policy impacts before deciding to lease.
- Dennis Beaver, a lawyer in Bakersfield, California, warns against predatory financing, false claims, high-pressure sales tactics, subpar installations, negligent maintenance service, refusal to honor warranties, and gross misrepresentations that are prevalent in the solar industry, which has resulted in the loss of over 17,000 jobs due to company bankruptcies.
