SOLARPOWERONTHEROOFANDINTHENEIGHBORHOOD:
RECOMMENDATIONSFORCONSUMERPROTECTIONPOLICIES
BarbaraR.AlexanderConsumerAffairsConsultant
WiththeAssistanceof
JaneeBriesemeister
Consultant
March2016
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BarbaraR.AlexanderopenedherownconsultingpracticeinMarch1996.From1986-96shewastheDirector,ConsumerAssistanceDivision,attheMainePublicUtilitiesCommission.Ms.AlexanderreceivedherJ.D.fromtheUniversityofMaineSchoolofLawin1976.Herclientsincludenationalandlocalconsumerorganizations,statepublicutilitycommissions,andstateutilitypublicadvocates.Herareasofexpertiseincludeconsumerprotectionstoaccompanytheimplementationofretailelectric,naturalgas,andlocaltelephonecompetition,servicequalityperformancestandardsforelectric,naturalgas,andtelecommunicationsproviders,lowincomeprogramdesignandimplementation,consumerprotectionsassociatedwithpilotandsystem-wideinstallationofadvancedmeteringanddynamicpricingprograms,analysisofutilitycustomerserviceprograms,andresidentialratedesignpolicies.
JaneeBriesemeisterhasmorethan25yearsofexperienceinconsumeradvocacy,policydevelopmentandadvocacyissuecampaignsonthestateandnationallevels,andisnationallyrecognizedasaleadingconsumeradvocateonresidentialutilityissues.From2006-2014Ms.BriesemeisterwasSeniorLegislativeRepresentativeintheDepartmentofStateAdvocacyandStrategyatAARP.AtAARPshewasresponsibleforsupportingtheorganization’sstateofficesonconsumer-orientedlegislativeandregulatoryadvocacyforaffordableutilityservice,includinghomeenergy,telecommunications,waterandwastewater.Ms.Briesemeisterreceivedthe2011AARPLynBodifordAwardforExcellenceinAdvocacy,recognitionfromhercolleaguesnationwideforleadershipoftheorganization’sadvocacyforaffordablehomeutilityservice.AARPisthenation’sleadingadvocacyorganizationforpeopleage50andover.
TheauthorsgratefullyappreciatetheassistanceandsupportforthisReportfromthefollowing:
• RichardBerkley,PublicUtilityLawProjectofNewYork• PaulaCarmody,MarylandOfficeofPeople’sCounsel• LindaConti,ConsumerProtectionDivision,OfficeofMaineAttorneyGeneral• TanyaMcCloskey,PennsylvaniaOfficeofConsumerAdvocate• MarkToneyandMarcelHawiger,TheUtilityReformNetwork(TURN),California
Inaddition,theauthorsthankCarolBiedrzyckiofTexasRatepayersOrganizationtoSaveEnergy(ROSE)inTexasforherassistance.
However,theauthorsremainsolelyresponsibleforthecontentandrecommendationsofthisReport.
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TABLEOFCONTENTSINTRODUCTIONANDEXECUTIVESUMMARY 4
CHAPTERI:THEMARKETFORRESIDENTIALSOLARISGROWING,FUELEDBYNEWFINANCINGOPTIONS........................................................................................................................................................................................7
CHAPTERII:ITISDIFFICULTTOSHOPANDCOMPARECOSTSFORROOFTOPSOLARANDTHEPROJECTEDIMPACTSONARESIDENTIALCUSTOMERELECTRICBILL.......................................................12A. SOLARCOMPANYWEBSITESOFTENMAKEGENERICSTATEMENTSANDDONOTEXPLAINMANYDETAILSOFTHEPROPOSEDTRANSACTION..........................................................................................12B. ITISDIFFICULTFORCUSTOMERSTODETERMINETHEIROVERALLSAVINGSFROMINVESTINGINSOLARPRIORTOENTERINGINTOAPURCHASE,LOAN,LEASEORPPA....................15C. FEDERALANDSTATEINCENTIVESIMPACTCUSTOMERPAYMENTSANDSAVINGSFORSOLAR.....................................................................................................................................................................................17
CHAPTERIII:THECASEFORADOPTINGCONSUMERPROTECTIONSFORSOLARPOWERTRANSACTIONS.......................................................................................................................................................................19A. CUSTOMERCOMPLAINTSANDREVIEWS.....................................................................................................19B. STATEATTORNEYGENERALENFORCEMENTACTIONSANDCIVILSUITS...................................20C. LEGISLATIVEINITIATIVES...................................................................................................................................21D. STATEANDFEDERALGUIDANCEONENVIRONMENTALCLAIMS.....................................................23E. PROPOSALSFORINDUSTRYSELF-REGULATIONAREINSUFFICIENTFORCONSUMERPROTECTION.......................................................................................................................................................................24
CHAPTERIV:RECOMMENDATIONSFORCONSUMERPROTECTIONPOLICIESANDMANDATESFORRESIDENTIALSOLARTRANSACTIONS.........................................................................................................................26A. REGISTRATIONANDLICENSING.......................................................................................................................26B. DISCLOSURES.............................................................................................................................................................28C. CONTRACTTERMS...................................................................................................................................................31D. SALESANDMARKETINGCONDUCT.................................................................................................................35E. ENFORCEMENTANDPENALTIES;CUSTOMERCOMPLAINTS..............................................................36
CHAPTERV:COMMUNITYSOLARPROJECTS:ADDITIONALCONSUMERPROTECTIONS..................37
APPENDIXA:SUMMARYOFSTATEPROPOSEDLEGISLATION(2014-2015)............................................43
APPENDIXB:CRITIQUEOFTHESEIABUSINESSCODEFORSOLARTRANSACTIONSASASUBSTITUTEFORSTATEREGULATORYOVERSIGHTANDSTANDARDS.....................................................46
APPENDIXC:CONSUMEREDUCATIONALMATERIALS.......................................................................................51
ENDNOTES.................................................................................................................................................................................52
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INTRODUCTIONANDEXECUTIVESUMMARY
ThepurposeofthisReportistoaddresstheneedforessentialconsumerprotectionpoliciestogoverntheburgeoningmarketsforresidentialrooftopsolarsystemsandcommunitysolarprojects.
TheU.S.residentialsolarmarkethasexperiencedexplosivegrowthinthelastfive
years,fueledbylowercosts,stateandfederalincentives,andnewfinancingoptions,includingleasesandpurchasedpoweragreements,alsoknownasthird-partyownership.Communitysolar,whereaconsumersubscribestosharesinasolarsystemthatislocatedinaneighborhoodorcommunity,isarelativelynewandgrowingoption.
Consumersmaybeinterestedinsolarpowertohelptheenvironment,orsimplytosavemoneyontheirelectricbills.Whateverthemotivation,itisnoteasytocomparisonshopforsolarpower.Consumerswillbefacedwithcomparingthecostsofoutrightpurchase,apurchasepoweragreement,alease,oraloan.Whetherpurchasedorleased,theconsumerismakingalong-termfinancialcommitmentwiththeexpectationthatsavingsonutilitybillswilloffsetthemonthlycostofthesystem.Achievingthesesavingsinrealityisdependentonavarietyoffactors—includingcontractterms,federal,state,andlocalsubsidies,theestimatedincreaseinthecustomer’scostofelectricity,andtheperformanceofthesolarpanelsthemselves.Itwouldbeeasyforaconsumertobemisledintoapurchasebasedonexaggeratedassumptionsaboutfuturesavings.Indeed,consumercomplaintshavepromptedstatestotakeactioninthecourts,andproposeconsumerprotectionstoaddressactualandpotentialabusesandmisconceptions.
ThisReportdescribesthemarketing,salespractices,disclosures,andcontractualtermsconcerningthecostsandbenefitsofinstallingrooftopsolarsystemsorparticipatingincommunitysolarsystems.Whileseveralexistinglawsandregulationsmaybeapplicabletoresidentialrooftopsolarinstallations,thosepoliciesarenotspecificallytargetedtosolarinstallationsandtheassociatedfinancialtransactions.ThisReportrecommendsthatsolarenergyprovidersthatengageinsales,leasesandpurchasepoweragreements,aswellasthoseofferingcommunitysolarprojects,shouldbesubjecttooversightbyastateagencyandberequiredtoprovideconsumerskeydisclosures,faircontractterms,andbesubjecttopenaltiesforviolatingstatelawsandregulations.
Thepreferredapproachfor
oversightofsolarenergyprovidersofferingresidentialrooftoporcommunitysolarprojectsshouldbeuniformandcomprehensivejurisdictionbythestateutilitycommission,orotherequivalentstateagency.Solarenergybusinessesaremarketingtoresidentialelectricutilitycustomersforaproductthatisinexorablylinkednotonlytothe
ThisReportwillnotaddressissuesgovernedbyhomeconstructioncodesandoversight,northedisclosuresandoversightassociatedwithloansdirectlyprovidedbyfinancialinstitutions.ThisReportshouldbeviewedascomplementarytotheoversightbystateAttorneysGeneralunderastate’sUnfairTradePracticelaws,theFederalTradeCommissionunderthecomparableFederalUnfairTradePracticelaw,andanystateandfederalregulationsthatspecificallyaddressDoortoDoorSalesandTelemarketingSalesactivities.Theseexistingconsumerprotectionpolicies,whilevaluable,arenotcomprehensiveanddonotaddressthespecifictypesoftransactionsandassociateduniquefeaturesforrooftopsolarsystemsorcommunitysolarsystems.
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customer’smonthlyelectricbill(andthepurchaseofwhichmightevenappearontheutility’selectricbillundersomeproposals),butisalsolocatedintheutility’sdistributiongrid.Tosomeextent,utilitycommissionsalreadyregulatesolarpowerwiththeirdetailedpricingdecisionsonnetmeteringandvalueofsolartariffsthatarecrucialtothemarketingclaimsrelatedtoloweringahouseholdelectricbill.Oftenstatepolicyrequiresthestatepublicutilitycommissiontopromotesolarpowerspecificallyaspartoftheefforttoachieverenewableenergyandcarbonemissionreductiongoals.Commissionsthentypicallyrequireutilitiestomakeinvestmentstoaccommodatetheintegrationofdistributedgenerationandsolarenergyfacilities,whetherthroughindividualcustomerrooftopinstallationorlocalcommunitysolarprograms.Thus,itfollowsthatstateutilitycommissionsarethemostlogicalfocustooverseeretailsolarsales,andsuggestionstolimitthejurisdictionofutilityregulatorstoonlyafewtypesofsolartransactionswouldresultinlikelyconfusionbyconsumersastotheirrightsandremedieswhenshoppingforsolarsystems.However,statesmaydecidethatadifferentstateagencyshouldexercisethisoversightandjurisdictionandourrecommendationswouldaccommodateanalternativeapproach.
ThisReportproposesconsumerprotectionsspecifictosolarleaseandsaletransactions,withdisclosuresandcontractualprovisionsthatflowfromthelongstandingconsumerprotectionpoliciesthathavegovernedretailsalesofproductsandservicestoresidentialcustomers.
ThekeyrecommendationssetforthinChapterIVincludethefollowingpolicies:
RegistrationorLicensing;StateAgencyAuthority:Consumersprotectionsarenoteffectiveunlessagovernmentalagencyhastheauthoritytoinvestigatecomplaintsandtakeactionagainstbadactors,andsuchenforcementcannotoccurwithoutregistrationorlicensing.Regulatorsshouldknowhowtocontactauthorizedrepresentatives,investigatethebackgroundofabusiness,andtakeactionagainstaproviderforviolationsofstatelawsandregulations.
Disclosures:ACustomerTemplate:ThisModelwouldnotregulatethefinancialcontentsofthesolarprovider’soffer,butwouldrequireallsolarprovidersmarketingtoresidentialcustomerstousethesametermsanddefinitionsandmaketheiroffersinamannerthatallowsacomparisonofimpactsonthecustomer’selectricitybillsandobligationsundertheapplicablefinancialarrangement.
ContractProvisions:Standardizingcontracttermsanddisclosuresdoesnotinanywayregulateorlimitthepricechargedforasolarlease,purchasepoweragreementorsale.However,certaincontracttermsshouldbespecificallyaddressedand,insomecases,mandatedorprohibitedtopreventunfairdealingandone-sidedbargainsaboutfineprinttermsandconditions.
SalesandMarketingConduct:Consumerprotectionregulationapplicabletoretailsolarprovidersshouldexplicitlyprohibitmisleadinganddeceptivesalesandmarketing
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statementsandreferencethestate’sspecificunfairtradepracticeorgeneralconsumerprotectionlaw.Asellercannotmisrepresentthenatureoftheformalagreementorusestatementsthataredirectlycontradictedbytheformalagreementorcontract.
TermsattheSaleofaproperty:Therehavebeencomplaintsaboutthirdpartyfinancingarrangementsincludingaprovisiongivingthesolarprovider(theownerofthesolarpanelsinseveraltypesoffinancialarrangements)therighttoapproveanewhomeownerbeforetheleasecouldbetransferredtothenewowner.Severalstateshaveaddressedthissituationintheirproposedlegislation,andtherightsandobligationsatthetimeofthesaleofpropertyareakeydisclosureintherecentlyenactedArizonalaw.
EnforcementandPenalties;CustomerComplaints:Theproposedconsumerprotectionscannotbeeffectiveunlessthoseregulationscanbeenforcedandviolatorspenalized.Enforcementrequiresthatanagencyhavetheauthorityandnecessaryresourcestoinvestigatecomplaints,accessthesolarprovider’srecordsdemonstratingcompliancewiththeunderlyingconsumerprotectionandcontractrequirements,takeactionstorevokelicensesorregistration,andassessfinesorpenaltiestoensurecustomersareprotected.
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CHAPTERI:THEMARKETFORRESIDENTIALSOLARISGROWING,FUELEDBYNEWFINANCINGOPTIONS
TheU.S.residentialsolarmarkethasexperiencedexplosivegrowthinthelastfiveyears.Thisgrowthhasbenefitedfromseveralfactors.First,thecostofsolarpowerpanelshasdroppedsignificantlyinrecentyears.1Second,federalandstatesubsidiesandincentiveshavefurtherloweredthenetcosttoconsumers.Finally,thesolarindustryhasdevelopednewfinancingmethods,includingloans,leasesandpurchasedpoweragreements,thatlowertheinitialcosttoresidentialcustomers.Theresultisthatfinancialinvestorshavesupportedthedevelopmentofsolarpowercompanies,theirmarketingandsalesactivitieshaveexpandedtomanystates,andnewindustryentrantshaveproliferated.
Whenacustomerinstallssolarpanelsontheirroof,theyhaveinstalledatiny
generatingplantforelectricity.Theallureofsolartomanycustomersisnotitsinitialcost,whichissignificant,butthepotentialforthecustomertogenerateelectricityandreducetheamountofelectricitypurchasedfromthelocalutilityandcontributetothe“greener”generationofelectricity.But,thatisonlypartofthecustomerbenefits.Thecustomermaygeneratemoreelectricityundercertaintimesofthedayorundercertainweatherconditionsthanthecustomerneedsandsothis“excess”electricityisflowedbackintotheutility’sdistributionsystemandthecustomerispaidforgeneratingthisexcesselectricity.Fromthesolarcustomer’sperspective,theissueiswhetherthereducedusageandthepaymentsforexcessgeneration(theresultingmonthlyelectricbill)offsettheupfrontandmonthlycostsofthesolarinstallation,whetherpurchasedoutright,throughaloan,orleasedfromthesolarcompany.
Themethodormannerinwhichthecustomerispaidforgeneratingexcess
electricitybytheutilityisreferredtoas“netmetering”orthe“valueofsolar.”Themethodologyforcalculatingthevalueandthepaymentstothecustomerforthisexcesselectricityishighlycontroversialmainlybecausetheutilityisallowedtorecoverthecostsofthebillimpactsassociatedwithsolar(i.e.,reducedusageandpaymentsforexcessgeneration)fromothercustomers.Utilityratesareregulatedbythestatepublicutilitycommissionandautilityisallowedtosetratesthatrecoveritsapprovedrevenuerequirement.Asaresult,thereisagrowingconcernabouttheshiftincoststosupporttheelectricitysystemfromsolarcustomerstonon-solarcustomers.2ThisReportdoesnotaddressthisissue,butratherfocusesontheneedforconsumerprotectionpoliciesandprogramsthataddressthemarketing,sales,andcontracttermsassociatedwithresidentialsolarprojects—whetherinstalledonthecustomer’srooforaspartofacommunitysolarprojectfinancedbyagroupofcustomers.Indeed,severalstatesarereconsideringtheirnetmeteringpolices,andsignificantchangeshaverecentlybeenadoptedbyNevadaandHawaii.Appropriatedisclosuresandaccuratesavingscalculationsareallthemoreimportantforconsumersinthischangingmarketplace.
Thesolarindustryconsistsofthreedistinctmarkets:individualcustomerrooftopsolar;utility-ownedsolarpowergeneratingfacilities;andcommunitysolar.Rooftopsolaris,asthenameimplies,typicallyinstalledonanindividualcustomer’sroof.Utility-owned
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solarpowerfacilitiesarelargerarraysofsolarpanelsthatareinstalledonthegroundandformpartoftheutility’sgenerationmixforallitscustomersandtheprudentcostsforthesefacilitiesareincludedinratespaidbyallcustomers.Communitysolarisusuallyinstalledonthegroundandfinancedbyaprivateorpubliclyownedorganizationtoserveagroupofcustomersinaneighborhoodordefinedgeographicarea.Solarpowerisaformof“distributedgeneration”becauseitisaformofgenerationofelectricitythatcanbelocatedthroughoutthedistributionsystemofanelectricutility,verydifferentfromthemoretraditionallargepowerplantsthathavehistoricallybeenusedtoproduceelectricity.ThisReportdoesnotusetheterm“distributedgeneration”becausethatisagenerictermthatcanincludegenerationresourcesotherthansolar.ForeaseofreferencethisReportusestheterm“solarpower”or“solarenergyfacilitiesorsystems.”
Throughtheendof2014,morethan600,000homesandbusinesseshadinstalledon-sitesolar,typicallyontheroof.Theresidentialmarketgrewbymorethan50%annuallyin2012,2013,and2014—atrendthatsomeexpertspredictwillcontinuefor2015and2016.Thesesystemsgenerateapproximatelyone-thirdofthetotalU.S.solarelectricityproduction.Themarketforresidentialsolarisexpandingrapidlyacrossthecountry.Twenty-onestateshavenowaddedmorethan100MWofsolarPV.Yetthetopfivestatesstillaccountfornearlythree-fourthsofcumulativeU.S.PVinstallations,withapproximatelyhalfofallresidentialsolarinstallationsinCalifornia.3Preliminary2015dataconfirmsthesignificantgrowthinresidentialsolarinstallationsby66%comparedto2014andconstitutes29%oftheentireU.S.solarmarket.Actualactivityremainsconcentratedintenstates.4
Homeownerscancontractwithasolarenergycompanytohaveasolarsystem
installedontheirrooftop(orelsewhereontheirproperty).Thehomeownermaybeofferedaloanorthirdpartyownershiparrangementtolowertheinitialinvestmentcostsofthesystem.Althoughrarejustafewyearsago,72percentofresidentialsolarsystemsinstalledin2014werefinancedthroughathird-partyownershipmodel(i.e.,solarleasingorathird-partypowerpurchaseagreement(PPA))5.Whilethird-partyownershiphasbeenontheriseintheresidentialmarket,someanalystspredictitsgrowthwillslowdownandthatfinancingtrendsmayshiftbacktoloanproducts.6
Dependingonthethirdpartyownershipagreement,thesolarcompanywilloftenbe
responsibleforfinancing,permitting,designing,installing,andmaintainingthesolarsystem.Underthetypicalthirdpartyownershipagreement,thehomeowneralsoassignsanytaxincentives,rebatesorotherincentivestothesolarprovider(thethird-partyowner).Theassumptionisthatthesebenefitshavebeenfactoredintothecontractterms.
Thefollowingfinancialarrangementscanbeofferedtoacustomerinterestedin
rooftopsolar,7butnotallsolarcompaniesofferalltheseoptionsandseveraloftheseoptionsarenotavailableinallStatesduetostatelawsthatmayimpacttheabilityofsolarproviderstooffersomeofthesefinancialoptions,particularleasesandPPAs.
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CustomerOwnershipoftheRooftopSolarSystem:CustomerPurchase:Thehomeownerobtainstheirownfinancing(oftenintheformofahomeequityloan)topurchasethesystemandthereisnoongoingrelationshipbetweenthehomeownerandthesolarcompanyaftertheinstallationofthesystemotherthanpotentialrepairandmaintenanceorwarrantyissues.LoanAgreement:Thehomeownerentersintoaloanagreementwiththesolarcompanytofinancethepurchasepriceofthesystem,thuseliminatingthehomeowner’sobligationtoobtaintheirownloan.Solarcompaniesthatofferthismodelhaveenteredintoagreementswithfinancialinstitutionstosupporttheirloanoffersandthesetermsmaydifferfromwhatthehomeownermightbeabletoobtainindividually.
Third-PartyOwnershipoftheRooftopSolarSystem:
PurchasePowerAgreement(PPA):Thesolarcompanyretainsownershipofthesolarsystemandthehomeownerbuysalloftheelectricityproducedbythesolarsystematanagreed-uponpriceperkWh.Thispricetypicallyrisesoverthetermofthecontract.Thehomeownertypicallyisnotrequiredtoinvestanysignificantcapitalcosts.PPAsareusuallylonger-termcontractswithtermsofupto20years.Lease:Thehomeownerentersintoaleaseagreementandmakespre-establishedmonthlypaymentstothesolarcompany,whoretainsownershipofthesystemforthecontractterm.Ineffect,thehomeownerisrentingthesolarsystemandhastherighttouseallthepowerproducedbyit.Theleasepaymentstypicallyriseyearlyoverthecontracttermandarenottiedtotheoutputofthesystem.Unlessthecontractincludesaperformanceguarantee,thehomeownercouldexperiencehigherorlowerelectricbillsdependingontheelectricaloutputassumedatthetimeofthetransaction.Thefollowingchartsummarizesthedifferentattributesassociatedwithaloan,a
lease,andaPPA:
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PurchasewithLoan Lease PPATypesofLoansincludesecuredandunsecuredsolarloans,homeequityloans,homeequitylineofcreditandPACEloans
Typesofleasesinclude$0downoracustomdownpayment,withmonthlypaymentsthattypicallyescalateeachyear.Optiontopre-pay(functionslikeacashpurchase,withtheleasingcompanyretainingalltaxcreditsandrebates).
Sameaslease
Meetqualifications,suchasminimumcreditscore.
Typicallyaminimumcreditscoreisrequired,butnotalways
Sameaslease
Termsof5-20years;3.5-7.5%interestrates.Somestatesoffersubsidizedloans.Interestonaloanmaybetaxdeductible.
Contractfor20-25yearperiod Sameaslease
Purchaserretainsanyincentivesandtaxcredit.
Leasingcompanyretainsanyincentivesandtaxcredits.
Sameaslease
Homeownerownsthesystemandisresponsibleformaintenance.
Leasingcompanyownsandmaintainssystem.However,consumermayhavesomemaintenanceresponsibilities,suchastreetrimming.
Sameaslease.
Consumermakesloanpayments.Hastherighttouseallofthepowerproducedbythesystem.
Consumerpaysamonthlyleasepaymentinexchangefortherighttouseallofthepowerproducedbythesystem.Ifthesystemproduceslesspowerthanpredicted,thecostwillbehigher.
ConsumeragreestobuythepowergeneratedbythesystematasetpriceperkWh.
Attheendoftheloanperiodtheconsumerownsthesystem.
Attheendoftheleasetheconsumercanbuythesystematthefairmarketvalueorpricespecifiedinthelease;havethecompanyremovethesystemorrenewthelease.Howisfairmarketvaluedetermined?
Sameaslease
Systemtransfersatsaleofhome.
Buyermayhavetoqualifytotakeoverleasepaymentsorsellermayberequiredtopurchasesystembeforesale.
Sameaslease.
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Whetherloan,leaseorPPA,thesearesignificantfinancialoutlaysforaconsumer,potentiallywithtermsthatmaynotbefullyunderstoodby,ornecessarilyfavorableto,thepurchaser.Whilecertainpoliciesrelatingtoresidentialsolar,suchasnetmetering,remaincontroversial,thereisagrowingawarenessoftheneedfordevelopingandimplementingbasicconsumerprotectionpolicesrelatingtothesaleandleasingofsolarsystems.
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CHAPTERII:ITISDIFFICULTTOSHOPANDCOMPARECOSTSFORROOFTOPSOLARANDTHEPROJECTEDIMPACTSONARESIDENTIALCUSTOMERELECTRICBILL
Whenshoppingforarooftopsolarsystem,customersarepresentedwithawidevarietyofoptionsthatincludeoutrightpurchase,apurchasepoweragreement,alease,oraloan.Customersmayhearaboutsolarpoweroptionsdirectlyfrommarketersintheformoftelemarketingsalescalls,door-to-doormarketing,web-basedadvertisements,andrecommendationsfromneighborsandfriends.Whiletheideaofsolarpowerisfairlysimpletoexplain—installsolarpanelsonthehomeowner’sroof--itisnoteasytocomparisonshopforaresidentialrooftopsolarsystem.Whetherpurchasedorleased,theconsumerismakingalong-termfinancialcommitmentwiththeexpectationthatsavingsonutilitybillswilloffsetthemonthlycostofthesystem.Achievingthesesavingsinrealityisdependentonavarietyoffactors—includingcontractterms,federal,state,andlocalsubsidies,theestimatedincreaseinthecustomer’scostofelectricity,andtheperformanceofthesolarpanelsthemselves.Whilesomeorevenallprospectivecustomersmayalsobemotivatedbytheenvironmentalattributesofsolarsystemsandtheirpotentialtodisplacethegreenhousegasorcarbonemissionsassociatedwithmoretraditionalpowerplants,mostconsumersalsoexpectbenefitsintheformofareducedmonthlyelectricbill.Thesavingspotentialforrooftopsolarsystemsisparticularlyimportanttocustomerswhocannotaffordtofinancethepurchaseofthesolarsystemthemselves.
A. SOLARCOMPANYWEBSITESOFTENMAKEGENERICSTATEMENTSANDDONOTEXPLAINMANYDETAILSOFTHEPROPOSEDTRANSACTIONAreviewofsomeofthetopsolarcompanywebsites8revealsthepotentialforconfusionandconfirmsthedifficultyofshoppingandcomparingthevariousoptionsordeterminingtheprojectedsavingsinthecustomer’smonthlyelectricbill.Inalmosteverycase,thesolarcompany’swebsitemakesgenericstatementsaboutelectricbillsavings,butasksthecustomertocalloremail(andthenreceiveasalescall)forapricequote.
• ThesolarcompanyBrite’swebsitepromotesaresidentialcustomerlease
(http://www.britelease.com/).Whiletherearenosampleleasedocumentsavailableonthiswebsite,theCompanyoffersanodownpayment15-yearleasewithaperformanceguaranteeandclaimthatconsumers“startsavingimmediately.”Thesitestatesthatelectricityratesriseanaverageof5to6%annually.Infineprint,thecustomerisinformedthatthereisa2.5%annualescalationinleasepayments.Thewebsitedoesnotincludeanylinkstobrochures,references,oreducationalmaterials.
• SunEdison(www.sunedison.com)onlyofferspurchasepoweragreementsforresidentialsolarinsixstates.Whilethewebsitepromotes“potentialsavings,”therearenoexplicitpromisesorestimatesofsavingsandthe“frequentlyaskedquestions”portionofthewebsitegenerallyidentifiesthecustomerspecificinformationneededtocalculatebenefitsandcosts.Thecompany’ssolarsystemispromotedasalongterminvestmenttoreducetheelectricbill,addvaluetothesaleofthehome,andasanactiontoreducecarbonemissions:
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Idon’tplanonbeinginmyhomefor20years,whywouldIaddsolar?Regardlessofhowlongyou’llbeinyourhomeitalwaysmakessensetogosolarformanyreasons.Financially,youwillbesavingmoneythefirstmonthyougosolarandeverymonthyouareinthehome.You’llalsobeabletosellyourhomeformoreasaresultbecauseitisamoreenergyefficienthome.Lastlyyou’llbereducingyourcarbonfootprintbynotusingthedirtyenergythattheutilitycompaniescurrentlyprovide.Aneffectthatwillnotonlybefeltbyyoubutbyyourchildrenandgrandchildren.Willmysystemincreasethevalueofmyhome?Yes!Theamountdependsonthemarketconditionsatthetimeyousellyourhome,theareaofthecountryyouliveinandtheamountofmoneyyouaresaving.However,mosthomeswillappraiseanywherefrom$5,000-$15,000more.
SunEdison’swebsiteexplainsthattheCompanywillnotchargethecustomeranyupfrontcostsfortheinstallationofthenewsolarsystemandthecustomerwillpayfortheenergythatthesolarsystemgenerates,“ataratetypicallythatislowerthanyouarecurrentlyproviding”(sic).Specifically,“Afterallofthefreeequipment,maintenance,andmonitoring,theonlythingyouhavetopayforwithourPPAisthepoweryoursolarpanelsproduce.Welockinaratethatisusuallylessthanyourlocalutilitycompany’smarketrate—whichmeansyou’refreefromthevolatilityoffuturerateincreases.Plus,ifyouproducemorepowerthanyouuse,weputitbackonthegridandyougetacreditfromyourutilitycompany.Ifyouproducelesspowerthanyouneedyoucanstilluseenergyfromyourenergyprovideratyouragreeduponprice.”
• Sungevity(www.sungevity.com)promotesa“savingsgraph,”thatreliesonaprojected
electricityrateincreasederivedfromnationalaverageelectricityrateincreasedatafrom1993-2013:“Thesooneryougosolar,thesooneryoucansave.”Thiscompanyoffersloans,leases,andaPPA,butdoesnotincludeanyofthesampledocumentsonitswebsite.Whilethereisafineprintdisclaimeraboutthe“estimates”forelectricitypricesandsavings,thepromotionalmaterialpresentsasavingsgraphwithastraightlinethatimpliesthepriceforsolarwillremainconstantfor20years.Yetthereisafineprintdisclaimerthatincludesawiderangeofcustomerleasepaymentsandthefactthatthereisanescalationclauseforthe“fixed”leasepayments:
Systemsize,cost,andavailabilityvaryaccordingtolocation,electricityusage,andutilitycompany.A5kilowattsystemleasestartsat$40-$140permonthfor20yearsonapprovedcredit.Paymenttermsvaryandmayincludefixedpaymentsorescalatingpaymentsatarateof1.5-2.9%annuallyfor20years.Zerodueatleasesigning.Nosecuritydepositrequired.ContactSungevitySalesforafreecopyofourwrittenperformanceguarantee.
• Sunrun’swebsite(www.sunrun.com)prominentlystatesthatitscustomersare“typically
saving20%”andthat“electricityratesareskyrocketing”aswellasthefollowingstatements:“Noneedtobuy.AsolarleaseorPPAcanbeaslittleas$0down.”“AsaSunruncustomeryou’llsave20%ormoredependingonhowhighyourelectricratesare,howmuchsunshineyouget,andfinancialincentives.”“TheaverageU.S.homeownercouldsave$84amonthbygoingsolar.
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Insomestates,it’smorelike$150amonth.”“Over20years,savingscanreach$20,000ormore.”Thewebpagewiththelargeprintreferenceto20%savings,includesanasterisktothefollowingstatement:
*SavingsclaimbasedonaverageSunruncontractsignedbeforeSeptember15,2014,paymentbyautomaticdebit,andanassumedannualutilityrateincreaseof3.5%.Actualsavingswillvary.Savingsdependsonseveralfactors,includingproducttype,systemproduction,geography,weather,shade,electricityusage,andutilitystructuresandrateincreases.Seesunrun.com/save20fordetails.
Sunrunoffersloans,outrightpurchase,leases,PPAs,andaprepaidoption.Thereisno
presentationofthecontractdocumentsonthewebsite.Withregardtochoosingamongthevariousoptions,Sunrunpresentsaseriesofquestionsthatpromotethe“payasyougo”and“norecurringbill”options.WithrespecttothechoicebetweenaleaseorPPA,thereisadisclosurethatthisoptionisdependentonthestatelawatthecustomer’sresidence.Whileseveralstatementsaremadewithregardto“flatmonthlypayments,”thereisnomentionofanypriceescalationincontract.
• SolarCityisthelargestresidentialsolarcompany.Onitswebsite(www.solarcity.com)the
CompanyidentifiestheStatesinwhichitoperatesandofferspurchase,loans,leaseandPPAswithexplanationsofeach.Unlikeothersolarcompanywebsites,SolarCityincludesactualPPAandleasedocumentsavailableforreviewbycustomers.SolarCitypromotessolarprimarilyasameansofreducingcarbonemissions.While“savings”aregenerallypromotedtoprospectivecustomers,theonlyspecificexampleisamentionofasavingsofupto40%ontheentirehomeenergybillwithasolarloan,butingeneralthewebsiteoptionsstatethatpaymentswillbelessthanthemonthlyelectricitybill.Whiletheactualleaseorcontractdocumentsreferenceapaymentescalationrate,thereisnoreferencetothisfeatureonthewebsiteorinpromotionalstatements
• Vivint(www.vivintsolar.com)emphasizespayinglessforelectricityandincludesabargraph
comparingmonthlyelectricbillsversussolarpoweredelectricbillsinHawaii,astatewithhighelectricityratesthatisnottypicalofotherjurisdictions.TheCompanyemphasizesacontractwithazerodownpayment,withafineprintreferenceto“forqualifiedcustomers.”Whilethechartpresentsapurported20yearsavingsestimate,thefineprintsaysthechartisnotbasedonactualsavings.Thewebsitedoesnotincludesamplecontractsoranyexplanationofhowcustomerpaymentsescalateovertime.TheonlypurchaseoptionexplainedonthewebsiteisaPPA(“OurPowerPurchaseAgreement(PPA)isthereasonwecanofferyouanaffordablesolarsolution.Youagreetopayforthepowerourarrayproduces,andweagreetodesign,install,finance,andserviceasolarenergysystemforyourhome.”).TheCompanyalsopromotescustomerquotationsandsavingsexperiencesonitswebsite.
Evenacasualreviewofthesewebsitesconfirmsthatthereareamyriadoffactorsto
considerandweighinacustomer’schoicetoinstallsolarpower.Thereisthepotentialforconsumerstobeconvincedtobuyorleasesystemsunderunfavorableloanorleasetermsthatdonotactuallyproducesavingsatthelevelpromotedinsalesandmarketingmaterials.Asdescribedinoneconsumereducationpiece:“[W]ithsomanysolarfinancingoptionsnowavailable,themarketplacefortheseproductshasbecomeincreasinglycomplex.Itcanbehardtochooseamongthedifferentpackagesandvendors.Thedifferencebetweenthemmaynotbereadilyapparent.Somecontractsarefilledwith
15
confusingtechnicaljargon,andkeytermscanbeburiedinthefineprintofacustomercontact.”9B. ITISDIFFICULTFORCUSTOMERSTODETERMINETHEIROVERALLSAVINGSFROMINVESTINGINSOLARPRIORTOENTERINGINTOAPURCHASE,LOAN,LEASEORPPA
Thesalespitchissimpleenough—thecostofinvestinginsolarwillresultinsavingsonthemonthlyelectricbillthatoffset,ormorethanoffset,themonthlypaymentforthesolarsystem.Solarpowersystemsarealsomarketedtoresidentialcustomersasameansofloweringpollutionfromtraditionalpowerplantsandcontributingtothecallforreducingcarbonemissionsandhelpavoidglobalwarming.
Theimpactofarooftopsolarsystemonacustomer’sfutureelectricbillisnotsimple.
EstimatingfutureenergypricesandtheoutputofasolarPVsystemisnecessarilydependentonassumptionsandpredictions,aswellastheveracityandqualificationsofthesolarmarketersandinstallers.Inadditiontotheactuallease,PPAorloanterms,aconsumer’sactualmonthlysavingsinenergybillswilldependsignificantlyontheincreaseinelectricityratesoverthecontractterm,anynetmeteringorvalueofsolartariffprograms,aswellasneworincreasedfixedchargesorothernonbypassablefeesandsurcharges.Anyavailabletaxcredits,rebatesorotherincentivesapplicabletothecustomer’sinstallationwilllowertheoverallcostofthesystem.Propersiting,sizing,installation,andperformanceofthesystemisalsoessentialfortheconsumertoachievethemaximumsavingsattheleastcost.
Toillustratethepointofhowprojectedsavingsvarygivenassumptionsaboutfutureutilityrates,considerthefindingsinanarticleontheMotleyFoolwebsite.InAprilof2014theMotleyFoolobtainedquotesonsolarleasesfromSolarCityforhomesinConnecticutandCalifornia.10TheSolarCityquotesassumedelectricityratesinbothjurisdictionswouldriseatarateof4.8%eachyear.TheMotleyFoolfound:“Ifweusethehistoricalcompound20-yeargrowthrateofelectricity,theConnecticutquotestillresultsinsignificantsavingsovertwodecades,butfarlessthanthe$23,942quotedbySolarCity.TheCaliforniaquotewouldactuallyresultinahighercostofelectricityfromsolarusingthehistoricalaveragegrowthrate.”
AnexamplefromconsumereducationalmaterialsdevelopedbytheAgCenteratLouisianaStateUniversitygivesahypotheticalexampleoftwodifferentfinancingoptions.Comparingthetwooptions,theexampleshowsonescenariowheremonthlypaymentsforsolarwouldbe$16higherthantheinitialmonthlyelectricbill,andanothernettingsavingsof$30permonth.Again,thesavingstoconsumersarehighlydependentontheriseinthepriceofelectricity:“Maintenanceexpensesmaybeincurred,andproductionvarieswithweatherandshadechanges.Electricityratescouldrisemorethanexpected,whichwouldincreasetheannualsavingsfromthesolarpowerproducedandshortenthepaybackperiod.Conversely,ifutilityelectricratesfallorexpensesrise,thereversehappens(savingswouldbelessandthepaybackperiodlengthened).”11
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Gettinganestimateiscrucial,butcomparisonshoppingamongthevariouspurchase
andloanoptionsisdifficult.Itisunderstandablydifficulttogiveconsumersquotesovertheinternet,givenallthefactorsthatmustbeconsideredinsizingandpricingasolarsystem.Manysolarinstallersareeagertogiveconsumersquotesbasedonanactualevaluationofthecustomer’sproperty,butacustomerwouldhavetoobtainsuchinformationfromseveralsolarcompaniesandavarietyofsolarpurchase,loan,orleaseoptionstocomparetheimpactontheirmonthlyelectricbill.Astheexamplesaboveshow,solarprovidersusedifferingestimatesofthefuturepriceincreasesforelectricity—thehighertheestimatedpriceincreases,themorecosteffectivesolarbecomes.Consumersmaynotunderstandthatevenaftergettingavarietyofcostestimatestheymaynotbeabletocomparethemonan“applestoapples”basis,giventhevaryingassumptionsmadebyeachprovider.
Thereareafew“savingscalculators”availabletoconsumersthatarenotdirectlyassociatedwithanysolarcompany.TheCaliforniaEnergyCommissionhaslaunchedtheSolarAdvantageValueEstimator,orSAVE.Thetool“estimatesthepresentvalueofasolarphotovoltaic(PV)system;providingamethodtocalculatetheenergysavingsvalueofasolarsystemincludingtheestimatedvalueinannualenergysavings.TheCaliforniaEnergyCommissiondevelopedSAVEinresponsetoexpressedinterestfromrealestateprofessionals,andotherstakeholders.”12ThecalculatorworksforCaliforniaaddressesonly.Itusesa2%annualescalationinenergyprices.TheNationalRenewableEnergyLabsNRELPVwattscalculator13offersdefaultsettings(unlikeCASAVE)andalsoincludesinformationonallavailablefederalandstateincentives.
Amorecustomer-friendlyoptionthatallowsconsumerstocomparequotesonan
“applestoapples”basisisEnergySage.14ThiswebsitehasthesupportandbackingoftheU.S.DepartmentofEnergy,NewYorkStateEnergyResearch&DevelopmentAuthority,ConnecticutGreenBank,andMassachusettsCleanEnergyCenter.Accordingtothewebsite,“EnergySagegetsyouquotesfrommultiplequalifiedinstallers,calculatestheimportantfinancialmetricsandmakesiteasytocompareyourquotessoyougetagreatdeal!Allatnocost!”EnergySagestatesthatitprescreensinstallersbasedon“reputation,experienceandqualityofservices.”Thewebsitesaysitsstaffwillanswerquestionsand“helpguideyourdecision.”
Yet,eventhebestsavingscalculatorcannotprovideanaccurateestimateofsavings,
becausetherearesimplytoomanyvariables.Theseincludethelocationandconditionofthehome,shade,conditionoftheroof,localrestrictions,sizeofthesystem,escalationofpayments,insurance,taxes,repairs,maintenance,andmore.Additionalconsiderationsincludethecertificationandreputationoftheinstaller,responsibilityformakingrepairs,homeownerassociationrestrictions,andresponsibilityforroofdamage,tonameafew.
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C. FEDERALANDSTATEINCENTIVESIMPACTCUSTOMERPAYMENTSANDSAVINGSFORSOLAR Thistransactionismadeevenmorecomplicatedbytheexistenceoffederal,state,andlocalsubsidiesassociatedwiththeinstallationofrooftopsolarsystems,someofwhicharetemporaryinnatureandcanexpireorbechanged.
Federalsubsidies:Certainresidentialdistributedgenerationinvestments15receiveaninvestmenttaxcredit(ITC)of30%ofeligiblecosts,withnoupperlimit(exceptforfuelcells).Rentalpropertydoesnotqualifyforthetaxcredit.Ataxcreditreducestheamountoftaxesowedbyataxpayeronaone-timebasis.Forexample,ifthevalueoftheITCwere$6,500andthefederaltaxowedwere$6,500,thetaxpayerwouldpaynotaxfortheyear.SinceitwasfirstenactedintheEnergyPolicyActof2005theITChasbeenextendedandexpanded.TheCongressionalResearchServiceestimatesthattherevenuecosttothefederalgovernmentoftheITCwas$500millioninFY2013and$600millioninFY2014.
ThemarketvalueofsolarcompaniesisheavilydependentonthefederalITCbenefit.As
reportedbySEIA,BloombergNewEnergyFinanceestimatedthatiftheITCexpiredinstalledsolarcapacitywoulddecreasebynearly8gigawattsin2017,comparedto2016levels.16Therefore,theCongressionalactionthatadoptedafive-yearextensionoftheITCinlate2015omnibusbudgetlegislationwasasignificantfactorintheclaimsofsolarlobbyrepresentativesthatitwouldallowfora$133billioninnew,privatesectorinvestmentsintheU.S.economyby2020.17ItistypicalunderleaseandPPAagreementsforthethird-partyownertoclaimthevalueofthistaxcredit.Thus,theresidentialcustomerdoesnotdirectlyclaimthetaxcredit,butmustrelyonthesolarprovidertorealizethevalueofthetaxcreditinthetermsofthetransaction.181920
Stateandlocalsubsidiesandincentives:Stateandlocalgovernmentsprovideavarietyoffinancialandpolicyincentivestobothresidentialandcommercialcustomersforsolarinstallations.Financialincentivesaretypicallydefinedasdirectpayments(suchasrebates),taxcredits,andsubsidizedloans.Policyorregulatoryincentivesincludetheapprovednetmeteringpolicyorvalueofsolartariff.Solarinstallationsmayalsobesubjecttolocallicensingandpermittingstandardsandfeesthatcouldimpactthecostofthesystem.
Stateandlocalfinancialincentivescansignificantlyreducecoststoconsumersinstallingsolarsystemsorotherdistributedgeneration.Asearchofanationaldatabaseofrenewableenergyandsolarenergyincentivesandstateregulatorypoliciesforresidentialincentivesrelatedtosolaridentified612stateandlocalprogramsacrossthecountry.21
Accordingtothe50StatesofSolarreport:“Atthestatelevel,thegeneraltrendsarethatsolarrebateincentivesaredecreasing,solartaxincentivesareexpiring,renewableportfoliostandardsarenearingtheir
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targets,netmeteringcapsarebeingreached,andnetmeteringandratedesignareundergoingregulatoryandlegislativereview.”22
Changesinstateandlocalsubsidiesandincentivesforsolarinstallationswillalterthefinancialtermsofthesolarprovider’scontractandleaseoptions,includinginsomeinstancesforexistingcontracts.Sincethevalueofsolartothecustomerisprimarilylinkedtosavingsinenergyexpenditures,theinteractionsamongtheapplicablesubsidiesandincentivepaymentsisnotknowntomostcustomersandgenerallynottransparentinthepaymenttermsofthesolarprovider’scontractdocuments.
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CHAPTERIII:THECASEFORADOPTINGCONSUMERPROTECTIONSFORSOLARPOWERTRANSACTIONS
RecentStateAttorneyGeneralenforcementactivities,Statelegislativereforms,andnationalpublicityhaveheightenedaninterestinunderstandingandconfrontingtheneedforspecificconsumerprotectionpoliciesforresidentialsolartransactions.23
Thereareseveralstateandfederallysponsoredpublicationsandweb-based
resourcesthatattempttoprovideunbiasedconsumereducationalmaterialsaimedathelpingresidentialcustomersunderstandthevarioussolarsystemtransactionsandcomparethevariousfinancialmodels.24Whilevaluable,consumereducationcannotsubstituteforstateoversightincludingspecificdisclosureandcontracttermregulationsgoverningthesecomplexdocuments.ArecentarticlebyanationalmediawebsitedevotedtorenewableandsolarenergydevelopmentssummarizestheseconcernsandinitiativesandhighlightedrecentlegislationadoptedinArizonaandthecallsfromsomeU.S.Congressmentoseekgreateroversight.25
ThisChapterdocumentsthenatureofthecustomerconcerns,StateAttorneyGeneralenforcementactivities,andasummaryoftheCaliforniaandArizonastatutorypoliciestogoverncertainaspectsofresidentialsolartransactions.AppendixAprovidesasummaryofotherproposedstatelegislationtoadoptconsumerprotectionsforcertainsolartransactionsconsideredin2015,butthatwerenotadopted.A. CUSTOMERCOMPLAINTSANDREVIEWS Inlightofthecomplexityofsolarenergycontractterms,thesignificantcoststoconsumers,andthesite-specificnatureofanyanalysisofcostsandbenefitsorimpactsonacustomer’selectricbill,itwouldnotbesurprisingforsomecustomerstofilecomplaints,buttheymaynotknowwheretoturn.CustomersmightfindtheirwaytotheStateAttorneyGeneral’sconsumeroffice,typicallythesectionoftheAttorneyGeneral’sofficethatdealswithunfairtradepracticeissues.OthercustomersmightfileacomplaintwiththelocalBetterBusinessBureau.Severalweb-basedcomplaintorcustomersatisfaction-ratingservicesreportoncustomercomplaintsaboutsolarinstallationandcontractterms. InDecember2013,GreenTechMediapublishedareviewofthetopfivesolarinstallersbasedoncustomercommentsandreviewsmaintainedbyYELP,apopularcustomerreviewwebsite.26ThereviewfocusedoncustomerratingsofSolarCity,VerengoSolar,VivintSolar,RECSolarandSungevityinCalifornia.Asaresultofthereviewofnegativecommentsaboutanyofthesesolarcompanies,theauthorconcluded,“Clearly,upsetcustomersweremostannoyedwithpushysalestacticsandhiddenfeesincontracts.Themostpositivereviewscamefrompeoplewhofeltliketheentireprocesswastransparent.”
Notingthatupto10%ofthetotalcostofthesolarsystemisestimatedtobecustomeracquisitioncosts,theauthornoted,“Reducingthosecostsmeanscrafting
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bettermanagementsoftwareandmoreattractivefinancingoptions,aswellasfindingnewretailoutletsviawhichtoreachconsumers.Butgettingcustomerstoactuallysignacontractrequirestraditionalsalestacticslikedoor-to-doorvisits,phonecallsandadvertising.”Also,theauthor,relyingonhisanecdotalexperience,statedthathehadheardfarmorepositivereviewsabouttheinstallationprocessthannegative,butthat“hardsalestacticsaretheuncomfortablerealityofcustomeracquisition."
AnotherwebsitethatpublishescustomerreviewsandexperienceswithsolarinstallersandsolarcompaniesisConsumerAffairs.27Thiswebsiteinformsviewersthatitacceptscommercialadvertisementsforitswebsite,butstatesthatitdoesnotreflecttheirreviewsorcustomercomments.Whilethereisnointenttosuggestthatthenegativecommentsorcomplaintsreflectedonthisoranyotherwebsiterepresentsastatisticallyvalidindicatororthattherearewidespreadnegativeexperiences,thefactthatnegativecommentsandcomplaintsexistcanprovidearedflagtosuggesttheneedforreforms.ThenegativecommentsaboutsolarinstallersreflectawiderrangeofissuescomparedtothosenotedaboveinthereviewofYELPdatafrom2013dueinparttoitsinclusionofmorerecentsolarmarketingactivitiesinmultiplestates.Inadditiontocommentsaboutpushysalestacticsandlackofclearexplanationofcontracttermsandfees,thesereviewersdescribedclaimsofsavingsontheelectricbillthatdidnotoccur(“IwastoldIwouldbeoffthegrid.”);disputesaboutdamagestotherooforinoperablesystemsthatwerenotrepairedinatimelymanner;delaysininstallation;andmisrepresentationofthetransaction.FromaMassachusettscustomer:
“Backin2013[]notifiedmeandtoldmeIqualifyforsolarpanelsbecauseIwasalowincomefamily.Theyputthesolarpanelson.Ireceivedabillforquitealot.Icalledthem.TheytoldmeIamina20yearcontractonlease.Nobodynevermentionedanyofthistome.TheytoldmeIsignedthepaper.Itwasfineprint.IfeelthatIwastrickedandcoercedintodoingthis.Iwanteveryoneouttheretobeawareofthesepeople.Theyarenothingbutaripoff.SonowIsitherestuckwitha20yearcontractwithanextrabilleachmonth.IfIknewanyofthisupfrontofcourseIwouldn'thavedoneanyofthis.Theyarenothingbutaripoff.Ifyouseethemcomingruntheotherway.”
B. STATEATTORNEYGENERALENFORCEMENTACTIONSANDCIVILSUITS
TheAttorneysGeneralinseveralstateshavetakenactionagainstsolarcompaniesandsolarinstallersusingtheirauthorityunderexistingstatelawsonfraudanddeceptivetradepractices:
• TheAttorneyGeneralofArizonahassettledacriminalcomplaintagainstasolarretailerthatmarketedsolarpanelinstallationspromisingrebatesfromthelocalutilitythatwerenotdeliveredeventhoughtheutilitypaidtheretailertherequiredrebate.Over$1millioninrestitutionwasmadeavailabletocustomers,butthelocalutility’ssolarrebateprogramisnowdefunct.28
• TheAttorneyGeneralofArizonahasalsosettledaconsumerfraudcasefiledagainstasolar
energyinstallerthatmadethousandsoftelemarketingcalls,conductedhighpressuresalespresentations,andsoldproductsthatdidnotresultinthepromisedreductioninenergy
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bills.ManyofthecustomerswhocalledtheAttorneyGeneraltocomplainaboutthissolarproviderhadactuallyexperienceincreasedelectricbillsaftertheinstallationofsolarpanelsduetoequipmentcosts.29
• TheAttorneyGeneralofMassachusettsannouncedasettlementwithSoltasEnergy
Corporationoverallegationsthatitviolatedthestate’sConsumerProtectionandFalseClaimsactsbyfailingtohonoragreementstosellnetmeteringcredits.
• In2014theLouisianaAttorneyGeneralinvestigatedSaderPowerEnterprisesforalleged
violationsoftheLouisianaUnfairTradePracticesActrelatingtoallegationsthatSadermisledconsumersabouttheamountofcostsavingsfromtheuseofsolarequipmentandthecostsofleasingtheequipment.
• A2013classactionlawsuitispendingagainstSunruninaLosAngeles,CASuperiorCourt
thatallegesthatthissolarprovider,oneoftheleadingprovidersofsolarleasesandpowerpurchaseagreements,ismakingfalseclaimsabouttheprojectedriseinelectricityprices.30
Somedisgruntledcustomershavefiledtheirowncivilactionsagainstsolarcompanies.InLouisianaaclassactionwasfiledagainstSaderPower,allegingunfairtradepracticesbypromisingclaimsofsubstantialsavingsoncustomerelectricbills,butsomecustomersendeduppayingmorefortheirmonthlyelectricbillaftergettingsolarpanels.ThislawsuitisstillpendinginU.S.DistrictCourtforEasternDistrictofLouisiana.31 C. LEGISLATIVEINITIATIVES Inmoststates,theAttorneyGeneralhasauthorityoversolarmarketingandsalesactivitiesbycommercialentities,includingsolarproviders,aspartoftheirUnfairTradePracticestatutes.Thesestatutestypicallyapplytoconsumertransactionsgenerallyandprohibitunfairanddeceptivetradepractices.Asindicatedabove,severalAttorneysGeneralhavemadeuseofthisauthoritytoinitiateinvestigationsandbringformalenforcementactionsagainstseveralsolarproviders.However,thesegenericconsumerprotectionstatutesdonottypicallyreflectspecificdisclosureandcontracttermsthatarespecifictosolarsystemmarketingandsalesactivities.Asaresult,severalstateshaveconsidered,butfewhaveadopted,morecomprehensiveregulatoryprogramsthatlinkthetraditionalunfairtradepracticepolicieswithspecificenergyand/orregulatedutilityoversight. Californiaadoptedspecificdisclosureobligationsforsolarprovidersin2008.Thesedisclosures,whileminimal,providesomekeyprotectionsforconsumers:
Anindependentsolarenergyproducercontractingfortheuseorsaleofelectricityortheleaseofasolarenergysystem,toanentityorperson,foruseinaresidenceshallincludeadisclosuretothebuyerorlesseethat,ataminimum,includesallofthefollowing:
• Agoodfaithestimateofthekilowatthourstobedeliveredbythesolarenergysystem.• Aplainlanguageexplanationofthetermsunderwhichthepricingwillbecalculated
overthelifeofthecontractandagoodfaithestimateofthepriceperkilowatthour.
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• Aplainlanguageexplanationofoperationandmaintenanceresponsibilitiesofthecontractparties.
• Aplainlanguageexplanationofthecontractprovisionsregulatingthedispositionortransferofthecontractintheeventofatransferofownershipoftheresidence,aswellasthecostsorpotentialcostsassociatedwiththedispositionortransferofthecontract.
• Aplainlanguageexplanationofthedispositionofthesolarenergysystemattheendofthetermofthecontract.
Further,thisstatuteauthorizesthePublicUtilityCommissiontorequiresolar
energyproviderstoprovideadditionaldisclosurestoabuyerorlesseeasaconditionofreceivingratepayer-fundedincentives.
Thelawalsorequiressolarenergycompaniestorecordanoticewhensolarelectricityproducingequipmentisinstalledonresidentialproperty.Thecodeisquitespecificthatsuchnoticeshallberecorded“againstthetitle”totherealproperty.Thecodealsosaysthatthisnotice“doesnotconstituteatitledefect,lien,orencumbranceagainsttherealproperty”.
Arizonamostrecentlyadoptedlegislationin2015,withthestatutetotakeeffectonJanuary1,2016.32Whiletherearenospecificprovisionsregardingcomplaintsandenforcement,thenewrequirementsamendTitle44(Chapter11,RegulationofParticularBusinesses),asectionofArizona’slawthatisundertheenforcementpowersoftheAttorneyGeneral.
Thenewstatutoryrequirementsincludespecificdisclosuresandcertaincontracttermsforthesale,lease,orfinancingofasolarenergydevicethatisintendedtobeusedprimarilyforon-siteconsumption.Anysuchagreementmust:
a.Besignedanddatedbythepersonbuying,financingorleasingthesystem;b.Beinatleast10-pointtype;c.Includeaprovisiongrantingthebuyerorlesseetherighttorescindtheagreementwithinthreebusinessdaysaftertheagreementissignedandbeforethesystemisinstalled;d.Provideadescription,includingthemakeandmodeloraguaranteeconcerningenergyproductionoutputthatthesystemwouldprovide;e.Separatelysetforththetotalpurchasepriceorcostforthelifeoftheagreement,anyinterestorfeestobepaid,andthetotalnumberofpayments,paymentfrequency,theamountofpaymentandthepaymentduedate,ifthesystemisfinanced;f.Identifypotentialtaxobligations;g.Discloseandseparatelyidentifytaxincentivesandrebatesthebuyermaybeeligibleforandanyconditionsorrequirementstoobtainthesetaxincentives,rebatesorotherincentives;h.Disclosewhetherthewarrantyormaintenanceobligationsmaybesoldortransferredtoathirdparty;i.Discloseandseparatelyacknowledgetheabilitytomodifyortransferownershipofasystemortherealpropertytowhichthesystemisaffixed,includingwhetheranymodificationortransferissubjecttorevieworapprovalbyathirdpartyandincludethecontactinformationoftheentityresponsibleforapprovingormodifyingthetransfer;
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j.Provideasummaryofthetotalcostsofoperating,maintaining,financingandconstructingthesystem;k.Provideanestimateoftheutilitychargesimpactedbypotentialutilityratechangesfromwithinplusorminus5%rangeofanannualincreaseordecreasefromcurrentutilitycostsiftheagreementcontainsanestimateofutilitychargeswiththeinstallationofasystem;andl.Includeadisclosurestatingutilityrates,structuresandprojectedsavingsaresubjecttochangeandtaxincentivesmaychangeorbeterminatedbyexecutive,legislativeorregulatoryaction.Thenewlawexemptsanindividualorcompany,actingthroughitsofficers,
employeesoragents,thatmarkets,sells,solicits,negotiatesorentersintoanagreementforthesale,financingorleaseofasystemaspartofatransactioninvolvingthesaleortransferofrealpropertytowhichthesystemisorwillbeaffixed.Finally,thestatutespecifiesthatanyagreementcontainingblankspaceswhensignedbythebuyerorlesseeisvoidableuntilthesystemisinstalled.
InadditiontothelegislationadoptedinArizonaandCalifornia,consumerprotectionlegislationrelatingtoresidentialsolarsystemswasintroduced,butnotadopted,inseveralstatesduringlegislativesessionsendingin2015includingIndiana33,Washington34,Louisiana35,andNevada.36Theselegislativeproposalsvariedindetailandspecificprovisions,butallincludeddisclosures,authorityforalicense,orregistrationwithagencyoversightandenforcement.AsummaryoftheselegislativeproposalsisincludedinAppendixAtothisReport.
D. STATEANDFEDERALGUIDANCEONENVIRONMENTALCLAIMS
Mostsolarprovidersmarkettheirproductsas“green”or“renewable”andmostconsumersbelievesolarisenvironmentallyfriendly,yetinactuality,theseclaimsmaynotbecompletelyaccurate.Questionsrelatingtohowsolarprovidersmarkettheirsolarsystemsbyclaimingrenewableor“green”energyattributeshasbeenaddressedbytheFederalTradeCommissionandinabulletinrecentlyissuedbytheVermontAttorneyGeneralentitled“GuidanceforThird-PartySolarProjects.”37Solarprovidersshouldnotclaimthattheirproductwillgivethecustomer“renewable”or“green”electricitysimplybecausethesolarpowergeneratedbythesystemhasvalueasaRenewableEnergyCertificate(REC).ARECisacertificatethatprovesthattheholderhasgeneratedorhaspurchasedelectricitywithcertainrenewableattributes.RECscanbeboughtandsoldinprivateandpublicmarketsandRECsareimportantattributestoensurecompliancewithstaterenewableenergymandatesandrequirements.However,unlesstheRECisspecificallyassociatedwithsolarenergy(which,insomestatesisregisteredasa“SolarREC”),theuseofaRECthatmayhaveattributesforrenewableenergyotherthansolarenergyshouldbecarefullydescribed.
TheVermontguidanceclearlystatesthatsolarproviders,includingcommunitysolarproviders,cannotpromoteprojectsasclean,renewableenergyifthesolarproviders
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retainandthenselltherenewableenergycredits.Thatpracticeisknownas“doublecounting”theRECs,anditisdeceptive,accordingtothisGuidance.
E. PROPOSALSFORINDUSTRYSELF-REGULATIONAREINSUFFICIENTFORCONSUMERPROTECTION Tradeassociationsforcompaniesintheresidentialsolarelectricindustrytypicallyopposetheadoptionoflegislationorregulationsthatwouldimposespecificconsumerprotectionrequirements.Ratherthansubmittogovernmentregulation,tradeassociationsoftenpromoteindustryself-regulationasasubstitute.
Forexample,inapendingproceedingbeforetheNewYorkPublicServiceCommissiontoadoptcertainregistrationandconsumerprotectionrequirementsonsomeDistributedEnergyResource(DER)providers,theSolarEnergyIndustriesAssociation(SEIA)submittedcommentsinopposition:
Asthenationaltradeassociationforsolarenergythathasbeenworkingacrosstheleadershipoftheindustrytobuildaself-regulatoryframework,theSolarEnergyIndustriesAssociation(SEIA)stronglyencouragesthatNewYorkallowSEIAandthesolarindustrytoself-regulate,ratherthansubjecttheNewYorksolarindustrytowell-intentionedbutpotentiallycostlyregulations.Asawhole,theSEIASolarBusinessCode(Code)adoptedbySEIA’sBoardofDirectorsandpublishedSeptember14,2015,providesahigherlevelofconsumerprotectionthantherulesproposedbyPSCStaff(Staff)inthisMatter.38
SEIAhasadoptedaCodeofEthics,aswellasModelLeaseandPurchaseAgreementsdevelopedbytheNationalRenewableEnergyLaboratory.Mostrecently,SEIAhaspublishedaSEIASolarBusinessCodethatconsistsofTheCodeconsistsoffivesections:GuidingPrinciples;Unfair,Deceptive,orAbusiveActsorPractices(UDAAP);Advertising;SalesandMarketingInteractions;andContracts.39
SEIAanditsmembersadoptedtheCodewithoutpublicinputorparticipationand,asa
privateorganization,couldnotpossiblydosoinanycase.Thesefactssupportthepropositionthatany“regulations”or“codeofconduct”applicabletoretailsolarprovidersshouldbeundertakenbyagovernmentalagencywithnoticeandopportunityforallpartiesandinterestedpersonstoparticipateandhaveinput.SEIA’sCodedoesnotreflecttheinputforconsumerrepresentativesandgovernmentalagencieswiththenecessaryexpertise.
Theself-regulationofthisemergingconsumermarketisnotanadequatesubstitutefor
meaningfulandenforceablelawsandregulations.Theattemptatself-regulationbySEIAisatestamentthatthereisaneedforoversightofstandardsandenforcement.TheSEIAcode,whilerecognizingtheneedforsomeuniformityinstandardsanddisclosures,isneithersufficientnorcomprehensive.WhilemanyoftheprovisionsoftheCodewouldbebeneficialtoconsumers,theCodeisnotasufficientsubstitutebecauseitisvoluntaryandunenforceableinanypublicprocessthatwouldincludefinesorordersforrestitution.Finally,aprivatemembershiporganizationisunabletorequirenon-memberstocomplywithitsproposed
25
policiesandanymemberthatobjectedtoanyprovisionoftheCodeoranyattemptto“enforce”theCodecouldandlikelywouldseveritstiestotheorganization.
AppendixBisamoredetailedcritiqueoftheSEIACode.
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CHAPTERIV:RECOMMENDATIONSFORCONSUMERPROTECTIONPOLICIESANDMANDATESFORRESIDENTIALSOLARTRANSACTIONS
ThisChapterrecommendsstatelawand/orregulationstogoverntheretailsalesofsolarpowertoresidentialcustomersforinstallationonacustomer’sresidence,typicallyonthecustomer’sroof.ChapterVaddressescertainuniquefeaturesassociatedwithcommunitysolarprograms,butitisintendedthatthedisclosureandoversightpoliciesrecommendedinthisChaptershouldalsobeconsideredforcommunitysolarprograms.Nosellerofgoodsandservicesshouldcommitunfairtradepractices,makedeceptivedisclosures,ormisrepresenttheproductorserviceinmarketingandsalesactivities.Theseproposalsarespecifictosolarleaseandsaletransactions,withspecificdisclosuresandcontractualprovisionsthatflowfromthelongstandingconsumerprotectionpoliciesthathavegovernedretailsalesofproductsandservicestoresidentialcustomers.Inaddition,theserecommendationsareintendedtocomplementexistingstateandfederalconsumerprotectionlawsandregulationsthatapplytotelemarketingsalescallsanddoor-to-doormarketingtoresidentialcustomers,aswellasfederalfinancialtransactionlawsanddisclosuresthatapplytoloansissuedbyregulatedfinancialinstitutions.Theserecommendationsalsodonottakeprecedenceoverexistingstateorlocalhomeconstructionandrepairregulationsthatmaybeapplicabletotheinstallationforsolaronacustomer’shome.
TheproposedpoliciesinthisReportareorganizedinthefollowingtopics:
A. RegistrationorLicensing;StateAgencyAuthority
B. Disclosures:ACustomerTemplate
C. ContractProvisions
E. SalesandMarketingConduct
E. EnforcementandPenalties;CustomerComplaints
A. REGISTRATIONANDLICENSING
Apersonshallnotsell,leaseorinstallarooftopsolarsystemoracommunitysolarsystemorsellelectricitygeneratedbysuchsystemsunlessthepersonhasregisteredwiththeCommissionbysubmittingaformasprescribedbytheCommission.
1.TheCommissionshalladoptregulations:
(a)RequiringaregistrationformsubmittedtotheCommissiontoinclude:
(1)thename,streetaddress,mailingaddress,electronicmailaddressandtelephonenumberoftheregistrant;
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(2)thenameandcontactinformationofanyregisteredagentoranypersondesignatedbytheregistranttoreceivenoticesandothercommunicationsfromtheCommission;
(3)thename,address,andtitleofeachofficerordirector;
(4)ifthecompanyispubliclytraded,thecompany'smostrecentannualreportfiledwiththeUnitedStatessecuritiesandexchangecommission;
(5)ifthecompanyisnotpubliclytraded,thecompany'scurrentbalancesheet;
(6)thecompany'slatestannualreport,ifany;
(7)astatementdescribingeachactivitydescribedinthischapter/sectioninwhichtheregistrantintendstoengage;
(8)astatementdescribingeachjurisdictionwheretheregistrantoritsaffiliateoperates;
(9)astatementdescribingthemanagerialandtechnicalqualificationsoftheregistrant;and
(10)anyotherinformationrequiredbytheCommission;
(b)RequiringaregistranttosubmittotheCommission:
(1)Anexampleofeachconsumercontractandagreementforthesale,loan,lease,orpurchaseagreementinwhichtheregistranthasindicatedheorsheintendstoengage;and
(2)Anupdatedexampleoftheagreementifapreviouslysubmittedexampleisnolongerreasonablyaccurateoriftheregistrantintendstoengageinanactivitydescribedinthischapter/sectionforwhichtheregistranthasnotyetsubmittedanexampleofanagreement;
(c)RequiringaregistranttosubmittotheCommissionanamendedregistrationformifanyinformationprovidedtotheCommissiononaregistrationformorapreviouslysubmittedamendedregistrationformisnolongercorrect;and
(d)Providingthetimeperiodwithinwhichanupdatedexampledescribedaboveoranamendedregistrationformmustbesubmitted.
2.Thecommissionmayrejectanapplicationthatdoesnotcontainallinformationrequiredbythissectionorbycommissionrule.
3.Thecommissionmusttakeactiontoapproveordenyanyapplicationforregistrationwithin_______daysafterreceivingtheapplication.Thecommissionmayapprovesuchapplicationwithorwithoutahearing.Thecommissionmaydenysuchapplicationaftera
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hearingwhenitfindsthatthecompanyoritsregisteredagenthasviolatedthischapterortherulesofthecommission,orthecompanyoritsregisteredagenthasbeenfoundbyacourtorgovernmentalagencytohaveviolatedthelawsofastateortheUnitedStates.
4.Thecommissionmaychargeaone-timeapplicationfeetorecoverthecostofprocessingapplicationsforregistrationunderthissection.
5.Thecommissionshalladoptrulestoestablishthecompanies'responsibilitiesforrespondingtocustomercomplaintsanddisputes.
6.Thecommissionshalladoptannualreportingrequirements.
7.Thesolarpowercompanymustkeepitscustomerrecords,includingcustomercontractsandagreements,availableforinspectionbythecommissionforfiveyears;
8.Thesolarpowercompanymustcooperatewithcommissioninvestigationsofcustomercomplaints;
7.Thecommissionmayconductinvestigationsandmaysuspendorrevokearegistration,and/orimposefeeorpenaltiesuponcomplaintbyanyinterestedparty,includingthestateutilityconsumeradvocate,oruponthecommission'sownmotionafternoticeandopportunityforhearing,whenitfindsthattheregisteredcompanyoritsagenthasviolatedthischapter,therulesofthecommission,orthecompanyoritsregisteredagenthasbeenfoundbyacourtorgovernmentalagencytohaveviolatedthelawsofastateortheUnited
States.
B. DISCLOSURES
Asolarprovidershallaccuratelyandcompletelydescribetheproposedtransactioninitsmarketingmaterialsandtermsofserviceandshallnotincludeanypromisesorsuggestionsofbenefitsthatarenototherwiseincludedinthecontractualtermsandconditions.Asolarprovidershallbeheldtocomplywithitsdisclosuresifthereisanyconflictwiththeunderlyingcontractualtermsandconditions.
ThecommissionshalldevelopamodelConsumerDisclosureTemplatethatisprovidedinaseparatedocumentofatleast12pointtypeandthatmustbeusedbylicensed(or
DISCUSSION:Consumerprotectionsarenoteffectiveunlessagovernmentalagencyhastheauthoritytoinvestigatecomplaintsandtakeactionagainstbadactors,andsuchenforcementcannotoccurwithoutregistrationorlicensing.Regulatorsshouldknowhowtocontactauthorizedrepresentatives,investigatethebackgroundofabusiness,andtakeactionagainstaproviderforviolationsofstatelawsandregulations.ThisReportrecommendsthepublicutilitycommissionasthemostlikelyfocusforoversightandenforcement,butrecognizesthatanalternativeagencyorarrangementcouldbeappropriatelyidentified.
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registered,whereapplicable)solarprovidersthatwillinclude,ataminimum,thefollowinginformation,andseparatelysignedanddatedbythepersonbuying,financing,orleasingthesolarenergysystem:
1. Theexpectedamountofelectricitythatwillbeproducedbythesolarenergysystem.Thebuyerorlesseeshallbeprovidedwithagoodfaithestimateofthenumberofkilowatthoursthatwillbedeliveredbythesolarelectricsystemonamonthlyandannualbasis,togetherwithadescriptionofthewarrantiesandlimitations,ifany,affectingtheestimate.
2. Totheextentthatthesolarproviderhaspromotedthesale,lease,orfinancingforacustomer’ssolarsystemasameanstosaveorlowerthecustomer’selectricitybill,theprovidershallincludethemethodologyandestimatedresultoftheproposedtransactiononthecustomer’selectricitybill,usingamethodologyforestimatingthefuturepriceofelectricitythatisapprovedbythecommission.Suchanestimateshallbeprovidedforthelengthofthefinancialtransaction.
3. Allofthecostsassociatedwithinstallingthesolarenergysystemincludingbutnotlimitedtoanytaxesthebuyerorlesseewillberequiredtopayaspartofanypurchaseorleaseagreement.
4. Agoodfaithestimateoftheimpactoftheinstallationofthesolarenergysystemonthevalueofthehomeaswellasagoodfaithestimateofanyapplicablepropertytaxes,suchestimatestobebasedonadisclosedmethodologyordata.
5. Thevalueofallfederal,state,andlocaltaxcredits,electricutilityratecredits,RenewableEnergyCredits,incentives,orrebatesthatthebuyerorlesseemayreceiveorsignover,ifapplicable.
6. Agoodfaithestimateofeachfinancialbenefitthebuyerorlesseewillreceiveorwaiveuponsigninganagreement,includingtaxcredits,electricutilityratecredits,incentives,subsidies,orrebatesandinformationregardingtheallocationofresponsibilityforpaymentsifandwheneachofthesefinancialbenefitsexpiresorismodified.
7. Theexpectedrateofcompensationforanyelectricityproducedbythesolarpowersystemandsoldtothecustomer’selectricutility,includingthecurrentreimbursementrateoftheelectricutilityatthetimeofsigningacontract,withadisclaimerthatthecurrentreimbursementrateissubjecttochange.
8. Ifretailnetmeteringorasimilartariffisinplaceatthetimeofthesaleorlease,anoticeinformingthebuyerorlesseethatadditionalchargesfordistribution,transmission,orstand-bygenerationmaybeimposedinthefutureifapprovedbythecommission,orbychangestostatelaw.
9. Thefullextentofpaymentsandinterestratesortheescalationofpaymentsoverthelifeofthesaleorleaseagreement.
10. Agoodfaithestimateoftheanticipatedvalueofanyassetsthatremainwithalesseeattheendoftheleaseagreementifapplicable.
11. Informationonthepotentialfireandotherhomesafetyrisksofasolarelectricsystem,andanexplanationofhowoperationsofthesolarelectricsystemcould
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affecthomeappliancesandequipmentintheeventthatthesystemisoperatingwithoutbackuporsupportfromtheutilitygrid.
12. Informationonwhetherthesaleorleaseagreementinsuresthesolarpowersystemagainstdamageorlossandunderwhatcircumstancesthecompanydoesnotinsureorcoverdamagesorlossofthesystem.
13. Astatementthatthebuyerorlesseeshoulddeterminewhetherhomeownerinsurancerateswillbeaffectedbytheinstallationofthesolarpowersystem.
14. Astatementthatthebuyerorlesseeshoulddeterminewhetherahomeowner’sassociationhasanyrestrictionsontheinstallationofasolarpowersystem.
15. Adisclosureonwhethertheleaseagreementprotectsagainstanydamageorlosstothelessee’srealandpersonalpropertyandhowtheinstallationofthesolarpowersystemmayimpacthomeinsuranceagreementsandratesandotherwarranties.
16. Astatementthattherearecostsfortheremovalortemporaryremovalofasolarelectricsystemincaseofroofrepairorreplacementduetoweather,wearandtear,orotherevents.Thebuyerorlesseeshallbegiveninformationonthecoststhecompanywillcoverandwillnotcoverintheeventtheroofneedsmaintenanceand,inthecaseofaleaseagreement,whetherthelesseeisrequiredtomakeanyleaseagreementpaymentsduringthetimethesolarelectricsystemisinoperableduetoroofmaintenance.
17. Informationexplainingthetermsoftheleaseagreementincasesofinoperabilityduetoproductmalfunctionsordefects.
18. Thecoststothebuyerorlesseeofanyadditionalmeteringequipmentorequipmentusedtoconnectthesolarpowersystemtothehomeorgrid,includinginstallation,removal,ormaintenanceandcleaningareaafterconstruction,installation,andremoval.
19. Astatementofthecompany’spolicyontheuseofcustomerdataasitrelatestoelectricityusage,production,andpersonalinformationandwhethersuchinformationisorcouldbesharedwithanyadditionalparties,withtheconditionsandmethodsofsuchsharingidentified.
20. Informationregardingthechangeintermsofleaseagreementintheeventofthesaleofthehomeorintheeventofthedeathofthelessee,andwhetherandunder
whatcircumstancestheleaseistransfer-able.
DISCUSSION:Thelegislation(orregulation)shouldnotmerelylisttheitemsthatmustbedisclosedtothecustomerbecausesuchadirectivemayresultinincludingthedisclosurerequirementsinamulti-pagecontract,typicallywritteninfineprintandwithtechnicaltermsandjargon.SimilartotheproposalforaConsumerTemplateinonelegislativeproposal,theregulatorycommissionshoulddevelopamodelCustomerDisclosureTemplateandrequiresolarenergyproviderstousethemodelthatisprovidedtoallprospectivecustomersandwouldbeavailableforeachfinancialmodelorproductofferedbythesolarenergyproviderasadvertisedontheprovider’swebsite.ThisModelwouldnotregulatethefinancialcontentsofthesolarprovider’soffer,butwouldrequireallsolarprovidersmarketingtoresidentialcustomerstousethesametermsanddefinitionsandmaketheiroffersinamannerthatallowsacomparisonofimpactsonthecustomer’selectricitybillsandobligationsundertheapplicablefinancialarrangement.WhereactualcustomerspecificinformationisrequiredtocompletetheTemplate,thecustomershouldreceiveadocumentthatreflectstheirspecificanalysisandinformation.Wherethisinformationisnotavailable,theprovidershouldberequiredtouseactualaveragecustomerusageandinstallationspecificationsfromtheutility’sserviceterritoryforpublicdisseminationwiththe
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C. CONTRACTTERMS
Anagreementgoverningthefinancing,saleorleaseofasolarenergysystemtoanypersonofthisstatemust:
1. Besignedbythepersonbuying,financingorleasingthesolarenergysystemandmustbedated.AnyDisclosureStatementorcontractualagreementthatcontainsblankspacesaffectingthetiming,valueorobligationsoftheagreementinamaterialmannerwhensignedbythebuyerorlesseeisvoidableattheoptionofthebuyerorlesseeuntilthesolarenergysystemisinstalled.
2. Beinatleast12pointtype.3. Includeaprovisiongrantingthebuyerorlesseetherighttorescindthefinancing,
saleorleaseagreementforaperiodofnotlessthanthreebusinessdaysafterthebuyerorlesseesignstheagreementandbeforethesolarenergysystemisinstalled.
4. Provideadescription,includingthemakeandmodelofthesolarenergysystem’smajorcomponentsoraguaranteeconcerningenergyproductionoutputthatthesolarenergysystembeingsoldorleasedwillprovideoverthelifeoftheagreement.
5. Separatelysetforththefollowingterms,ifapplicable:a. Thetotalpurchasepriceortotalcosttothebuyerorlesseeunderthe
agreementforthesolarenergysystemoverthelifeoftheagreement;b. Anyinterest,installationfee,documentpreparationfees,servicefeeorother
coststobepaidbythebuyerorlesseeofthesolarpowersystem;c. Ifthesolarpowersystemisbeingfinancedorleased,thetotalnumberof
payments,thepaymentfrequency,theamountofthepaymentexpressedindollars,andthepaymentduedate.
6. Provideadisclosureinthesaleandfinancingagreements,totheextenttheyareusedbythesellerormarketerindeterminingthepurchasepriceoftheagreement,identifyingallcurrenttaxincentivesandrebatesorotherstateorfederalincentivesforwhichthebuyermaybeeligibleandanyconditionsorrequirementspursuanttotheagreementtoobtainthesetaxincentives,rebatesorotherincentives.
7. Identifythetaxobligationsthatthebuyerorlesseemayberequiredtopayasaresultofbuying,financing,orleasingthesolarpowersystem,including:
a. Theassessedvalueandpropertytaxassessmentsassociatedwiththesolarpowersystemcalculatedintheyeartheagreementissigned;
b. Anyobligationofthebuyerorlesseetotransfertaxcreditsortaxincentivesofthesolarpowersystemtoanyotherperson.
8. Disclosethetermsofanywarrantyandwhetherthewarrantyofmaintenanceobligationsrelatedtothesolarpowersystemmaybesoldortransferredtoathirdparty.
9. Includeadisclosure,thereceiptofwhichshallbeseparatelyacknowledgedbythebuyerorlessee,ifatransferofthesale,leaseorfinancingagreementcontainsanyrestrictionspursuanttotheagreementonthelessee’sorbuyer’sabilitytomodifyor
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transferownershipofasolarpowersystem,includingwhetheranymodificationortransferissubjecttorevieworapprovalbyathirdparty.Ifthemodificationortransferofthesolarpowersystemissubjecttorevieworapprovalbyathirdparty,theagreementmustidentifythename,addressandtelephonenumberof,andprovideforupdatinganychangein,theentityresponsibleforapprovingthemodificationortransfer.
10. Includeadisclosure,thereceiptofwhichshallbeseparatelyacknowledgedbythebuyerorlessee,ifamodificationortransferofownershipoftherealpropertytowhichthesolarpowersystemisorwillbeaffixedcontainsanyrestrictionspursuanttotheagreementonthelessee’sorbuyer’sabilitytomodifyortransferownershipoftherealpropertytowhichthesolarpowersystemisinstalledoraffixed,includingwhetheranymodificationortransferissubjecttorevieworapprovalbyathirdparty.Ifthemodificationortransferoftherealpropertytowhichthesolarpowersystemisaffixedorinstalledissubjecttorevieworapprovalbyathirdparty,theagreementmustidentifythename,addressandtelephonenumber,andprovideforupdatinganychangein,theentityresponsibleforapprovethemodificationortransfer.
11. Provideafullandaccuratesummaryofthetotalcostsundertheagreementformaintainingandoperatingthesolarpowersystemoverthelifeofthesolarpowersystem,includingfinancing,maintenanceandconstructioncostsrelatedtothesolarpowersystem.
12. Iftheagreementcontainsanestimateofthebuyer’sorlessee’sfutureutilitychargesbasedonprojectedutilityratesaftertheinstallationofasolargenerationsystem,provideanestimateofthebuyer’sorlessee’sestimatedutilitychargesduringthesameperiodasimpactedbypotentialutilityratechangesrangingfromatleastafivepercentannualdecreasestoatleastafivepercentannualincreasefromcurrentutilitycosts.Thecomparativeestimatesmustbecalculatedbasedonthesameutilityrates.
13. Includeadisclosure,inatleast12pointtype,thereceiptofwhichshallbeseparatelyacknowledgedbythebuyerorlessee,thatstates:Utilityratesandotherfederal,state,orlocaltaxsubsidiesaresubjecttochange.Thesechangescannotbeaccuratelypredicted.Projectedsavingsfromyoursolarpowersystemarethereforesubjecttochange.Taxincentivesaresubjecttochangeorterminationbyexecutive,legislativeorregulatoryaction.
14. Ifapplicable,includeadisclosureregardingtheratethebuyerorlesseecanexpecttobecompensatedforanyelectricityproducedbytheirsolarpowersystemandsoldtotheelectricutility.Thedisclosure,inatleast12pointtype,thereceiptofwhichshallbeseparatelyacknowledgedbythebuyerorlessee,shallprovideinformationtothebuyerorlesseeaboutthecurrentreimbursementrateofthebuyerorlessee’selectricutilityatthetimeofsigningtheagreement.Thedisclosureshallalsocontainadisclaimerthatthecurrentreimbursementrateissubjecttochange.Ifretailnetmeteringisinplaceatthetimeofthe
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purchase,thesolarcompanyshallinformthesolaruserthatadditionalchargesfordistribution,transmission,orstand-bygenerationmaybeimposedattherequestoftheutility,byruleofthecommission,orbychangestostatelaw.
15. Anagreementforthefinancing,saleorleaseofasolarpowersystemthatdoesnotcomplywiththerequirementsofsubsection1orthatisnotaccompaniedbythestatementrequiredbysubsection2isvoidableattheoptionofthepersonbuyingorleasingthesystemuntiltheinstallationofthesystembegins.
16. Ifapplicable,adisclosuresimilartothefollowing:Thisagreementlimitsyourrighttobringacourtcaseorfileaclassactiontoenforcethisagreementorseekdamages.Instead,youagreetosubmitanyclaimstoanarbitratorwhowillhavetheauthoritytointerpretthisagreementanddecideanyclaimsyoumayhave.40
TermsofSolarContractRelatedtoSaleofaHome
1. Intheeventthatrealpropertysubjecttoasolarpowersystemconsumercontractissold,theremainderoftheconsumercontractmustbeassumedbythebuyerifamemorandumhasbeenrecordedreflectingtheessentialtermsoftheconsumercontract,unlessthesellerand
buyeragreeotherwise.Ifthebuyerofsuchpropertyassumesaconsumercontractthebuyercontinuestoqualifyforallapplicableincentives.
2. Thirtydayspriortoclosing,thesellerofthepropertyshallnotifyanyutilityandsolarpowercompanyaffectedbytheconsumercontractthatthebuyerisassumingthecontract,orthatthebuyerandsellerhaveagreedotherwise.
3. Withinsevendaysoftheseller'snotice,theutilityandsolarpowercompanyshallprovidethedocumentationoftheproceduresnecessaryforassumptionoftheconsumer
DISCUSSION:Standardizingcontracttermsanddisclosuresdonotinanywayregulateorlimitthepricechargedforasolarlease,PPAorsale.AsshownbytheAttorneyGeneralenforcementactions,andstatelegislation,thereisarecognizedneedtoprovideconsumerswithclear,understandabledisclosuresthatallowthemtomakemeaningfulcomparisonsamongoffersandtofullyunderstandthetermsofthefinancialtransaction.Solarprovidersshouldnotmakeclaimsofsavingsonwebsitesoranysuchclaimsof“average”savingsshouldbeconspicuouslyidentifiedwiththebasisfortheclaimandallowcustomerstoaccessorreviewthedatathatsupportssuchclaims.Claimsofcustomersavingsontheelectricbillshouldreflectautilityspecificprofilebecausesavingsaresocloselyrelatedtoaspecificutility’sratesandapplicablenetmeteringorsolartariffpolicy.Consumersshouldbeabletoaccessthisinformationbyinputtingtheirzipcodeontheprovider’swebsite.
Inaddition,consumersshouldbeinformedinaconspicuousmannerthattheirfutureandpredictedsavingsorcostforelectricityissubjecttochangebytheutilitycommissionorstatelegislature.
Withregardtothedisclosureconcerningtheobligationtosubmitclaimstoanarbitrationprocess,alineofU.S.courtcaseshaveheldthatthe1926FederalArbitrationActpreemptsstatelegislationthatmayattempttoprohibitsuchcontractualprovisions.
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contractbythebuyer,or,intheeventthatthebuyerisnotassumingthecontract,forterminationoftheconsumercontractandremovaloftherenewableenergysystem.
4. Attheendoftheconsumercontracttermorintheeventofanyearlierterminationoftheconsumercontract,theownerofthesolarpowersystem,whetheritisautilityorasolarpowercompany,isresponsiblefortheremovalofthesolarpowersystemfromthepropertyandmayrecoverthecostthereofonlyasspecifiedintheconsumercontractandnotedintherecordedmemorandum.Theowneroftherenewableenergysystemmayonlyobtaindamagesfortheprematureterminationofaconsumercontracttotheextentthattheamountofthedamagesisspecifiedasliquidateddamagesintheconsumercontract.
5. Renewableenergysystemconsumercontractsmaynotgrantutilitiesorsolarpowercompaniesanyauthoritytoapproveordisapproveofthetransferofrealpropertyassociatedwithsuchaconsumercontract.
6. Theownerofasolarpowersystemshallguaranteesufficientfundstoproperlydisposeofthesystemattheendoftheconsumercontract.
7. Theownerofasolarpowersystemmustremovetherenewableenergysystemfromthepropertywithintwenty-onedaysofawrittenrequestofthepropertyowner.Theownerofasolarpowersystemisresponsibleforidentifyinghazardousandcommerciallyvaluablematerialscontainedinthesolarpowersystemandhowthosematerialswillbeproperlydisposedoforreclaimed.Theownermustprovidethisinformationtothe
commissionuponrequest.
PrivacyofCustomerInformation
1. Solarprovidersshallkeepconfidentialcustomerspecificorprivateinformationrelatingtothecustomer’selectricityusage,financialsituation,credithistory,andotherresidence-specificinformationobtainedtoimplementtheproposedtransaction.Suchcustomerspecificinformationobtainedfromthecustomerorthecustomer’selectricutilityshallnotbeusedortransmittedtoanyentity,includingaffiliates,foranypurposeotherthantoimplementthecustomer’stransactionwithoutthecustomer’saffirmativeconsent.
DISCUSSION:TherehavebeencomplaintsaboutleaseandPPAcontractsincludingaprovisiongivingthesolarprovider(theownerofthesolarpanels)therighttoapproveanewhomeownerbeforetheleasecouldbetransferredtothenewowner.Severalstateshaveaddressedthissituationintheirproposedlegislation,andtherightsandobligationsatthetimeofthesaleofpropertyareakeydisclosureintheArizonalaw.
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D. SALESANDMARKETINGCONDUCT
1. Solarpowercompaniesshallensurethatallsales,marketingandadvertising,whetheroral,writtenorelectronic,areaccurate,easilyunderstandableandbasedonfactsandincompliancewithstateandfederallawsandregulations.Solarpowercompaniesshall(1)accuratelydescribethecustomer’sfinancialobligationsundertheproposedtransactioninitssalespresentationsandmarketingmaterialsbasedonitsunderlyingformalcontractorleasingdocuments;and(2)ensurethatitsmarketingandsalesstatementsandpromisesconformtotheformalandwrittentermsandconditions.
2. Solarpowercompaniesareresponsiblefortheactionsoftheiremployees,agentsandanyotherthirdpartyrepresentativesandshallensuretheycomplywiththerequirementsofthissection.Solarpowercompaniesshalldocumenttheirinternaltrainingandmonitoringprogramsapplicabletotheirsalesagents,whetheremployeesorthirdpartyagents,andmakesuchrecordsavailabletothelicensingorregulatoryauthorityuponrequest.
3. Solarpowercompaniesshouldnotrefertosolarpoweras“free”inoralorwrittenmarketingorsalesdiscussionsunlesstheConsumerwillnotpayanythingforthesolarsystemortheenergyitgenerates.
4. Ifadvertisedpricesincludeinitialpricingreductionsorfutureincreases,allmaterialtermsofsuchinitialreductionsorfutureincreasesshallbedisclosedwhensuchpricesaremarketedorotherwisecommunicatedtoConsumers.
5. Publicstatements,includingthoseonwebsitesorinprintmaterial,thatdescribesolarenergyas“clean”or“renewable”aredeceptiveiftheRenewableEnergyCreditsaresoldandthereisnoadequatedisclosureaboutit.Disclosuresmustbeproximatetothepromotionofsolarenergy.
6. Whereapplicable,solarprovidersshallbesubjecttotheregistrationandapplicablerequirementsofthe[StateDoortoDoorand/orTelemarketingSalesActs].
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DISCUSSION:Similartoregulationsontheretailsaleofelectricity,consumerprotectionregulationapplicabletoretailsolarprovidersshouldexplicitlyprohibitmisleadinganddeceptivesalesandmarketingstatementsandreferencethestate’sspecificunfairtradepracticeorgeneralconsumerprotectionlaw.Asellercannotmisrepresentthenatureoftheformalagreementorusestatementsthataredirectlycontradictedbytheformalagreementorcontract.Forexample,retailsellersofelectricgenerationsupplycannotadvertisethattheirgenerationsupplywillsavecustomersontheelectricitybillandthenbillthecustomerbasedonavariableormonthtomonthpricethatmightcomplywiththefineprinttermsofthecontract,butthatresultsinsignificantincreasesinthecustomer’smonthlyelectricbill.Asimilarexampleexistswithpromotingsolarenergytransactions.Solarprovidersshouldnotoffer“free”electricityoreven“freesunpower”becausethatisnotwhatisreflectedinthetransaction.
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E. ENFORCEMENTANDPENALTIES;CUSTOMERCOMPLAINTS
1.ThecommissionshallinvestigateanycomplaintreceivedagainstasolarpowercompanyrelatedtoaviolationofthisChapter.If,afterinvestigatingsuchcomplaint,thecommissionfindstherehasbeenaviolationofthisChapter,thecommission,afternoticeandhearing,mayimposeanadministrativepenaltyagainstthesolarcompany.ThecommissionshallpromulgaterulesandregulationstodeterminetheappropriatepenaltiesforviolationsoftheprovisionsofthisChapter.
2.NothingintheChapterisintendedtoprecludetheauthorityoftheAttorneyGeneraltoinvestigateandenforcestateconsumerprotectionlawspursuanttothatoffice’sjurisdiction.
3. AsolarprovidershallmaintainrecordsofcompliancewiththerequirementsofthisAct,includingdisclosurestatements,contractterms,trainingandoversightofitsagents,customercomplaints,andcustomernoticesandcontractcommunicationsforaperiodofthreeyearsorthelengthofthecontractterm,whereapplicable.
4. Inordertoproperlyallowcustomerstocommunicatequestionsandcomplaints,thesolarprovidershallmaintainreasonableandadequatecustomerservicefacilities,atollfreetelephonenumber,andsufficientstaffingtohandleincomingcustomercommunications,ameanstoobtainadditionalstaffingintheeventofanemergency,andsufficientlytrainedpersonneltoensurethattheservicerepresentativecanprovideinformationaboutthecustomer’sspecifictransactionandassociatedissuesrelatingtotheimplementationofthattransaction,withaccesstomanagerialorsupervisoryassistanceas
needed.
DISCUSSION:Theproposedconsumerprotectionscannotbeeffectiveunlesstheregulationscanbeenforcedandviolatorspenalized.Enforcementrequiresthatanagencycaninvestigatecomplaints,thesolarprovidershouldberequiredtomaintainrecordsdemonstratingcompliancewiththeunderlyingconsumerprotectionandcontractrequirements,includingevidenceofaffirmativecustomerconsentandenrollment,receiptofdisclosuresbythecustomer,customercomplaints,complaintsnotresolved,andbusinessrecordsassociatedwiththeseactivitiesforaminimumtimeperiod,typicallythreeyearsfromthedateofthetransactionforenrollmentsanddisclosuresandarollingthreeyearperiodforcustomercomplaints.
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CHAPTERV:COMMUNITYSOLARPROJECTS:ADDITIONALCONSUMERPROTECTIONS
Communitysolarprojects42aretypicallylessexpensiveperoutputofenergythan
individualsolarinstallations,dueinparttotheirinstallationontheground,andtheassociatedeconomiesofscaleincreatingalargersolararray.Acommunitysolarprojectalsoenablestheoptionofmakingsolarpoweravailabletoabroadergroupofresidentialcustomers,includinglowerincomehouseholds,rentersandthosewithhomesthatareinappropriateforasolarinstallation(duetolocation,typeofroof,shade,etc.).Acommunitysolarprojectisalargerversionoftheindividualrooftopsolarinthatitisessentiallyasmallelectricgeneratingplantlocatedinthedistributionsystem.
Communitysolarsystemscanbeowneddirectlyandentirelybytheutility,ownedby
theutilityinpartnershipwithathirdpartyservingaspecificrole(e.g.,projectdeveloper,customerinterface),orownedbyathirdparty.Thethirdpartycouldbeaprofit-makingsolarprovideroranon-profitlocalcommunityagencyororganization.Acommunitysolarsystemcouldbepromotedbythelocalutilitypursuanttotariffsorotherdirectivesofthestatepublicutilitycommissionorpromotedbyasolarproviderwhomayseekthenecessarylandunderaleasingarrangementandthensolicitindividualcustomerstoparticipateintheproject.
Acommunitysolarprojectiscomposedofthreedistinctactivities:First,agroupof
participantsvoluntarilypayforasubscription(ordirectownership)ofaportionofacommunitysolarsystemthatislocatedoff-site.Second,theelectricityproducedbythesystemflowsdirectlyintotheelectricgrid.Third,inexchangefortheirsubscription,theparticipantsreceiveanagreeduponcompensation(e.g.,acreditontheelectricbill)fortheelectricproductionoftheirportionofthecommunitysolarsystem.
AccordingtotheSolarElectricPowerAssociation(SEPA),13statesplustheDistrictof
Columbiahaveenactedcommunitysolarlegislation.Eachstatepolicyvaries,particularlyinscaleandreimbursementrate,butthefoundationforeachistheenablementofbillcreditsforcustomersparticipatingincommunitysolarprograms.43TheSEPAreportanalyzed68communitysolarprojectsinoperationacrossthecountry.About80percentoftheseprojectsareunder1megawatt(MW).About73percentoftheorganizationsrespondingtoSEPA’scommunitysolarsurveychargesubscribersanupfrontfeetobuyintoaproject;butassolarcostshavedropped,sohaveupfrontfees,from$5perWattin2011to$3perwattin2015.AccordingtoSEPA’sReport,“Initialmarketresearchshowsthatconsumersareinterestedincommunitysolar,butarelookingforprogramswithflexiblecommitments--suchasshort-termcontractsandtransferability.Somewouldalsoprefertheprojectsbelocatedatremotelocationswheretheydon’thavetoseethem.”
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The
marketing,sales,contract,anddisclosurerequirementsrecommendedinChapterIVshouldalsobeadoptedforcommunitysolarprojects.Thereareseveralaspectstocommunitysolarprogramsthatraiseconsumerprotectionissuesandconcerns,someofwhichareuniquetocommunitysolarandothersofwhicharesimilar
totheoffersforrooftopsolarsystems.ThisChapterdescribestheuniquefeaturesforcommunitysolarandrecommendsadditionalconsumerprotectionpoliciesthatshouldbeadoptedfortheseprograms.
UtilityandCommissionOversight.Severalstatecommunitysolarprogramsthrust
thelocalutilityandthepublicutilitycommissiondirectlyintotheoversightandapprovaloftheseprograms.Insomecases,thesizeandscopeoftheprograms(intermsofthesizeoftheutilityarrayandnumberofparticipantsorsubscribers)arerestrictedorlimitedtopilotprograms.Inmostcases,theseprogramscomewithastatutorymandatetodevelopspecificconsumerprotectionorregulatoryoversightregulations.Ineithercase,therearegroundsfordirectoversightandregulationbytheregulatorycommission.
CommunitySolarMarketingActivities.Whetherornotthecommissionhasbeen
requiredtoconductcommunitysolarpilots,thepotentialformarketingabuseandtheneedforoversightofprivatemarketersisparticularlyimportant.Whenasolarproviderismarketingtoobtainsubscribers,itmayseektomarketitsprojectviatelemarketingordoor-to-doorsalesactivities,promotingasolaroptionatalowercostthanforindividualrooftopsolarsystems.Itwillbeveryimportanttoensurethatmarketingclaimsandlegalagreementsareproperlyandaccuratelydisclosedandthatconsumersareprotectedagainstmisleadinganddeceptiveclaimsabouttheimpactofsubscribershipontheirmonthlyelectricbill.Thisconcernisparticularlyimportantforprojectsthataredesignedtosolicitlowerincomeanddisadvantagedcustomerstoenrollinacommunitysolarprogram,thusintendingtomakesuchanoptionmoreaffordablecomparedtorooftopsolarsystems,manyofwhicharenotavailabletocustomerswithouta
AmongthecasestudiesevaluatedintheSEPAreportarethefollowing:XcelEnergyhascommunitysolarprojectstotalingalmost20MWinits
Coloradoserviceterritory.Xcel’sSolar*RewardsCommunityprojectsareconstructedandownedentirelybyprivatesolarcompanies.Theseprojectshaveenjoyedrapidgrowthandareusuallyfullysubscribedwithin6monthsofcomingonline.Xcelselectsitsfor-profitpartnersthroughacompetitivebiddingprocessandpaysthemsubsidiestiedtotheamountofelectricitygenerated.Earlyintheprogram,participantspaidanupfrontfeebasedontheirsubscriptionsize,howeverfinancingisnowavailabletomostsubscribers.
In2015,GrandValleyPower(GVP)partneredwithGRIDAlternatives
(GRID)tobuilda24kWCSG.Thesystemwasdedicatedspecificallytolow-incomecustomersinGVP’sserviceterritoryandisoperatedandmanagedbyGRID.GRID,anonprofit,promotesaCSmodelthatinvolvescombiningequipmentdonationsfromsolarmanufacturers,financialcontributionsfromvarioussources,andlaborfromjobtrainingprogramsandvolunteers.Subscriberstotheprogrampaynoup-frontfeeandreceiveanongoingcreditfortheproductionoftheirshareoftheCSG,thoughthereisa2centperkWhfeetohelpdefraymanagementcosts.Subscribersparticipateinfour-yearcycles.Aftereachcycle,theycanre-qualifyfortheprogram,oriftheynolongerqualify—forexample,iftheirincomehasrisenaboveprogramlimits—theirsharecanbeassignedtoanotherlow-incomeparticipant.
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specificcreditscoreorcredithistory.Inaddition,communitysolarsystemsareoftentoutedasapotentialmeanstoenrollcustomerswhodonotowntheirhomesinsolarpowersystems.
TheSEPAReportidentifiedseveralkeyissuesforbothregulatorsandconsumersto
understandandconsiderwithregardtocommunitysolarprojects:CustomerOffer.Thisreferstothepaymentforparticipation--typicallyeitheran
upfrontpaymentofallcostsoranongoingpremiumpaymentappliedtotheelectricityproducedbythecustomer'sshareofthesystem.Financingmaybeofferedforupfrontpayments.OftheactivecommunitysolarprogramsstudiedbySEPA,73%haveanupfrontpaymentcustomeroffer,17%haveanongoingpayment,and10%allowcustomerchoiceamongthetwooptions.
ValuePropositiontoSubscribers.Thisreferstothefinancialvaluethesubscriber
receivesinreturnforparticipatinginthecommunitysolarproject,eitherabillcredit(71%ofthosereviewedintheSEPAReport),oraseparatelineitempaymentontheelectricbill(29%).Thebillcreditreducesthesubscribers’kWhconsumptionbythekWhproducedbytheirshareoftheproject.Aseparatelineitempaymentisarateuniquetothecommunitysolarprojectthatisbasedonavoidedcostsinavalueofsolartariff,netmetering,oranotheraccountingmethod,andwouldbeappliedtoallkWhproducedbythesubscriber’sshareoftheoutput.Theutility’sadministrativecosts,particularlybillingsystemcosts,areafactorindesigningbothoftheserates.
Sign-upFee:Theprojectmaychoosetochargeasign-upfeethatcanbeusedto
guaranteeasubscriber’ssharebeforetheprojectisactuallygeneratingelectricity.OftheprojectsstudiedbySEPAthatcurrentlyhavefees,thefeesrangefrom$50toseveralhundreddollars.Whenupfrontpaymentisrequested,ahighersignupfeemaybechargedtoreserveashare,andthencreditedtowardtheupfrontpayment.Forprojectswithongoingpayments,sign-upfeesmayprotectagainsttheriskofasubscriberleavingbeforetheminimumterm.
RenewableEnergyCreditTreatment:Renewableenergycredits(RECs)maybe
availableforthecommunitysolarproject.RECshavevalue,therefore,adecisionmustbemadeastowhowillownthecreditsandwhatwillbedonewiththem.SEPAdescribestwooptions:Inthefirstoption,theowneroftheenergycanmaintainownershipoftheREC.Inthiscase,itisthenuptotheownerwhethertheyretiretheRECtomeetacompliancerequirementoriftheysellitonthemarket.ThesecondoptionisthattheRECcanbetiedtotheenergyproductionandtransferredtothecustomer.44
ProposedConsumerProtectionPoliciesforCommunitySolarProjects.Severalstateshaveadopted,orareconsidering,consumerprotectionsthataredirectlyapplicabletocommunitysolarprojects.ThisReportrecommendsthattheproposedconsumerprotectionpoliciesreflectedintheMarylandandMinnesotapublicadvocateproposalsbeadopted:
Marylandadoptedalawin2015creatingapilotprogramforcommunitysolarprojects.TheMarylandlawrequiresthecommunitysolartobeinthesameelectricserviceterritoryasitssubscribers,butathirdpartymayfinance,build,own,oroperateacommunitysolarproject.Electricutilitiesmustbuythevirtualnetexcessgeneration,uptospecifiedlimits.TheMarylandlawcreatesathree-yearpilotprogramthatallowsfortheconstructionofcommunity
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solarprojectsundertheauthorityoftheMarylandPublicServiceCommission.TheCommissionmustadoptregulationsimplementingthepilotprogramnolaterthanMay15,2016,andthethree-yearprogramwillstartfollowingruleadoption.KeyissuestoresolveinthePSCrulemakingareconsumerprotectionmeasures—atariffstructureunderwhichanelectriccompanyprovideskilowatt-hourorvaluecreditstothecommunitysolarsubscriber;virtualnetmeteringcalculation;protocolsforcommunicationamongthepertinentparties;andinterconnectionprotocols.Underthepilotprogram,individualsystemsizesarecappedat2megawattsand200kilowattsubscriptionscannotconstitutemorethan60percentofitssubscriptions.Thecumulativenameplatecapacityunderthepilotprogramcountstowardtheexistingstatutorylimitationof1,500megawattsforallnetmeteringprojectsinthestate.TheCommissionisrequiredtolimitthepilotprogramwithincertainparameterssothatitcanconducta“meaningful”(asrequired)analysisoftheprogramanditsresults.ThelawrequirestheCommissiontoinitiateastakeholderworkgroupthatexaminesandidentifiesthecostsandbenefitsoftheprogramandrecommendswhethertoestablishapermanentcommunitysolarprogram.TheCommissionwillthenreportitsfindingsandrecommendationstotheMarylandlegislaturebyJuly1,2019.45
TheMarylandOfficeofPeople’sCounselhasproposedspecificissuesthatshouldbe
reflectedintheforthcomingconsumerprotectionanddesignregulationsforthesepilotprograms.46Specifically,thisOfficehasrecommended:
SignUpandDepositLimits:Thesign-upcostsanddepositrequirementthatdevelopersimposeonsubscribersinterestedinparticipatingandreservingaportionofCSEGSmustbelimitedtoareasonableamount.SomeprotectionmustexisttopreventdevelopersfromcollectingdepositsfrominterestedcustomersandneverbuildingtheCSEGS.Onepotentialsolutiontothiswouldberequiringsubscriberdepositstoenteratypeof“escrow”accountwhichwouldtransferapercentageofthefundstothedeveloperonlyaftertheCSEGSbecomesoperational.Thisapproachcould;however,limitdevelopers’abilitytoeffectivelyfinancesystems,sosomebalancewouldhavetobestruck.
TheNeedforContractRegulation:Forsomeextremelyimportantconsumerprotectionissues,simplyrequiringdisclosuretothesubscribersisinsufficient.Iftheissuehasbeenidentifiedasakeyprotectionclause,itshouldbemandatedbytheCommissionaspartoftheprogram,ratherthanjustbeingarequireddisclosure.Thiswillpreventunscrupulousdevelopersfromtakingadvantageofunder-educatedsubscribers,poisoningthecommunitysolarprogram,andpotentiallydampeningtheentiresolarindustryandmarket.
Listofsuggestedprogrammaticrules:
• Noyearlypriceescalationpast2%embeddedintocontract.• Notransferfeesifcustomermoveswithinserviceterritory.• Projectionsofcostsavingsmustincludeascenarioof0%increaseinelectricrates.• Nofeeforadownsizingallocationwithinfirstsixmonthsupto20%ofsubscribed
blocks.• Nofeetodownsizebyatmost5%eachyearthereafter.
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SubscriptionTransferability:Subscribersshouldbeabletotransfertheirsubscriptionbacktothesubscriberorganizationsonamonthlybasis,butmayincurapenaltytodoso.ShouldaCSEGSbeundersubscribed,theportionofthecapacitythatisnotsubscribedshouldbecreditedatthecommodityrateuntilnewsubscriberscanbefound.
Downsizing:Thereshouldbeprovisionsallowingsubscriberstodownsizetheirsubscriptionsize.Forexample,regulationscouldprovidesubscriberswitharighttodownsizetheirsubscriptionsizebyatmost20%withoutpenaltywithinthefirstsixmonthsofsigningup,5%thereafter,inaccordancewiththeminimumownershippercentages,shares,orcapacityestablishedbythesubscriberorganization.Thispreventsapotentialdisincentiveforsubscriberstoconserveenergyafterjoiningtheprogram,whileincentivizingsubscriberorganizationstoprovideexcellentcustomerserviceandmaintaincompetitivecostsasmorecommunitysolaroptionsbecomeavailabletoconsumers.
Minnesotahasimplementedacommunitysolarprogramcalled“solargardens”inwhichcertainconsumerprotectionissueshavebeenspecificallyconsidered.Inthisproceeding,XcelEnergysubmittedaproposedtarifftoimplementcommunitysolarprojects.TheOfficeofAttorneyGeneral—AntitrustandUtilitiesDivisionraisedsignificantissueswithregardtothelackofspecificinformationontheutility’sproposedtariffandmaderecommendationstoreformtheproposalpriortoanyCommissionapproval.47ThecommentssubmittedbytheMinnesotaAttorneyGeneralproposedthattheCommissionadoptconsumerprotectionsforsolargardensubscribers,relyingontheCommission’sobligationthatthesolargardenprogramisinthepublicinterestandtoensurethatconsumersareprovidedwithfullandfairdisclosuresoffuturecostsandbenefits.
AsdescribedbytheAttorneyGeneral’sComments,Xcel’sproposedtariffwaslackingin
keyinformation,includingwhatcustomersmightberequiredtopayforsolargardensubscriptions,whethercustomerswouldpayanyfeeinalumpsumorinsubscriptions,thedurationofcustomersubscriptions,thetransferabilityofanycustomersubscriptions,orthemethodsthatsolargardendeveloperswouldberequiredtousetoestimatetheoutputofthesystem.ReferringtoinformationfromXcel’scommunitysolardevelopersinColorado,“SolargardendevelopersinXcel’sColoradoserviceterritoryestimatethat,inexchangeforthe$3,700up-frontcost,subscriberswillreceivebillcreditsofapproximately$270peryearperkilowatt,concludingthatcustomerswouldnotrecovertheirinitialinvestmentformorethan13yearsaftertheprojectbecomesoperational.48AmongtherecommendationsbytheAttorneyGeneralarethefollowingconsumerprotectionpolicies:
• RequireregistrationorcertificationbeforetheCommunitySolarProjectqualifiesfor
incentives.Thisshouldincludebasicinformationabouttheownership,site,andthefinancialandtechnicalabilitytomanageaproject.
• Contractsbetweentheutilityandtheprojectdevelopermustbeapprovedbythecommission;
• Consumershouldreceivecomplete,credibleandaccuratedisclosures,includinginformationonthecosts(includingfinancingcosts)andbenefitsofaparticularprojectpriortosigningacontract;
• Consumersshouldbeabletorecoveranypaymentsmadeforsubscriptionsintheeventthattheirlifecircumstanceschange;
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• TheCommissionshouldreviewmaterialsusedbycommunitysolarmarketerstopromotetheirprojecttocustomers;
• Consumersmustbeinformedofthetimeperioditwilltaketorecoveranyinitialpaymentspriortoobtaininganycustomersignature;
• Astandardcontractordisclosureformshouldberequiredforallcommunitysolarprojects;
• TheCommissionshouldestablishastandardizedmethodusedtodeterminehowtheprojectwillestimateprojectoutput;
• TheCommissionshouldestablishastandardizedmethodtoprojectfutureelectricitypricesorimpactsoncustomerbillsduringthelifetimeoftheprojectand/orthecustomer’ssubscriptionobligation.
IntheOrderapprovingtheSolarGardentariff,49theCommissionrejectedtheAttorney
General’swarrantyorperformancerecommendationonthegroundsthatitmightimpedethecreationandfinancingofsolargardensattheearlystageoftheirdevelopment.TheCommissionrejectedtheAttorneyGeneral’srecommendationsonreviewingsolargardencontractsandmarketingmaterials,anddevelopinguniformstandardsforsolargardenproductionestimates,againconcludingthatsuchrequirementswouldburdensolargardenoperatorsatthestartoftheprogram.Withregardtodisclosures,theCommissionrequiredXcel’scontractwiththesolargardenoperatortoprovidesubscriber-specificdisclosuresonfuturecostsandbenefits,proofofinsurance,andproofofalong-termmaintenanceplan.TheCommissiondidrequiresolargardenoperatorstoobtainopinionlettersonthelegalandtaxbenefitsofparticipationintheprogram.TheCommissionagreedthatcustomersubscriptionsshouldbetransferablebacktothesolargardenoperator.Finally,theCommissionadoptedtheAttorneyGeneral’ssuggestionsaboutdataprivacyandstrengthenedsubscriberprivacyprotections.
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APPENDIXA:SUMMARYOFSTATEPROPOSEDLEGISLATION(2014-2015)
Thelegislativeproposalssummarizedherewerenotadopted.Indiana:HB1320wouldhaveallowedthirdpartyownershipandincluded
requirementsregardingsafetyandinterconnectionandamendedthestate’sdeceptivetradepracticesacttorequireconsumerdisclosuresrelatedtodistributedgenerationorsolarpowersystems.TheStateAttorneyGeneralwouldhavehadauthoritytoreceivecomplaintsandenforcethenewlaw.Requireddisclosuresincludedestimatesoftheenergyoutputofthesystem,allfinancialtermsincludingpriceescalations,disclosureofallstateandfederalsubsidiesandincentives,andcleardelineationofresponsibilityfortheequipmentatthetimeahomeissold. Washington:HB1912coveredvariousaspectsofdistributedgenerationincludingstatetaxcredits,incentives,solarmodulerecycling,andrequiringanindependentconsultanttoprepareatwo-phase"SmartPlanforaSmartGrid"study.Withregardtoconsumerprotectionprovisions,thebillwouldhavepermittedthirdpartyownershipandprovidedaregulatoryframeworkforthirdpartyownersofdistributedgeneration.ThelegislationproposedtoempowertheWashingtonUtilitiesandTransportationCommissionwithjurisdictionovernon-raterelatedconsumerprotections,whileretainingthecurrentjurisdictionpursuanttothestate’sunfairtradepracticestatuteimplementedbytheAttorneyGeneral.Third-partyvendorsandaffiliatesofanelectricutilitymustregisterwiththecommission,disclosetermsofservice,andcooperatewithcommissioninvestigationsofconsumercomplaints.Thisincludesrequirementstoprovide,onaseparatepageinconspicuousprint,certaintermsaddressingarbitrationorwaivingtherighttojoinaclassaction,andtofilewiththecommissionortheAttorneyGeneralcopiesofjudgmentsorarbitrationdecisionsinactionsallegingviolationofconsumerprotections.Thecommissionisgrantedregulatoryauthorityoverconsumerprotections.50Certainminimumdisclosuresareenumeratedinthelegislation.
OneofthemoreinnovativeprovisionsofthebillwasarequirementforthedevelopmentofaConsumerTemplatethatwouldthenberequiredtobeusedbythirdpartysolarcompanies.Thetemplatemustincludetermsdeemednecessaryforaconsumertounderstandthebusinessdeal,suchasperformanceguarantees,respectiverightsoftheparties,andthefinancialpaybackofthesystem.
(1)Anyinstallationcompany,competitiveelectricserviceprovider,orelectricutilityprovidingarenewableenergysystemeligibleforanincentivepaymentundersection5ofthisactmustprovidetheentityapplyingundersection5(1)ofthisactauniformstatementofessentialterms.TheuniformstatementmustbeinaformatestablishedbytheWashingtonStateUniversityextensionenergyprogram,whichmustconsultwiththeattorneygeneral,theutilitiesandtransportationcommission,andrepresentativesofutilitiesinestablishingtheuniformstatement.
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(2)Theuniformstatementmustbeprovidedpriortoexecutionoftheconsumercontractandmustbesignedbythecustomer.
(3)Theuniformstatementmustincludeinformationregardingtherespectiverightsandresponsibilitiesofallpartiesinvolved,andincludesuchtermsasreasonablynecessaryforthecustomertounderstandandmakeaninformeddecisiontoentertheconsumercontract.Suchinformationmustincludethefollowing:
(a)Informationaboutthesystem'sperformance,suchasamonthlyorannualproductionperformanceguaranteeorrangeofperformanceandsystemsizeandcapacity;
(b)Customercosts,includingtheamountofanydownpaymentrequired,periodicpayments,orcostperkilowatt-hourofelectricityproduced,andanybuilt-inescalationratesorscheduleofpaymentamounts;
(c)Lengthofcontracttermandtotalexpenditureorrangeofexpenditures,ortheeffectiveannualinterestrateoverthetermoftheagreement;and
(d)Thecustomer'srightsandresponsibilitieswhensellingarenewableenergysystemaspartofasaleofrealproperty,includingresponsibilityforsystemremovalcosts,disposalofthesystem,andanyremainingperiodicpayments.
Most importantly, the proposed bill included specific languagewith regard to theoversight and enforcement powers of the commission, including its ability to resolvecustomer complaints and conduct enforcement actions and assess penalties. The thirdpartyentitiessubjecttothisjurisdictionwerealsorequiredtocooperateininvestigations,handling of customer complaints, and maintain records of their sales and financialactivities for five years. These entities were also required to ensure that its customercontractsmeetthedisclosurerequirementsofthecommission’srules.
Withregardtocontracttermsthatmaylimitthecustomer’srighttoobtainaremedybycourtorclassaction,theentity“mustprovidethesetermsonaseparatecontractpageinboldandconspicuousprintandrequirethecustomertoseparatelysignacknowledgmentoftheterms.”And,theseentities“maynotincludeinaconsumercontractaprovisionthatlimitsaconsumer'sabilitytoseekdamages.Aprovisionlimitingdamagesisvoidasagainstpublicpolicy.”
Louisianaalsoconsideredspecificlegislationgoverningsolarpowertransactions,butdidnotenactanyfinallanguage.ThisbillauthorizedthePublicServiceCommissiontopromulgaterulesandregulationstogoverntheregistrationofsolarcompanieswiththecommission,toconductinvestigations,imposefeesandpenalties,andtakeactionsnecessarytoassureproperimplementationoftheconsumerprotectionprovisionsofproposedlaw.Theproposalprovidesforcertaindisclosurestobemadebyasolarcompanytoasolaruser.Thesedisclosuresincluderegulatory,financial,safetyandinformationregardinguseofcustomerinformationandinsurancecoverage.ThebillrequiredtheCommissiontoinvestigateanycomplaintreceivedagainstasolarcompanyrelatedtoa
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violationofproposedlaw,andif,afterinvestigatingsuchcomplaint,theCommissionfindstherehasbeenaviolation,thecommission,afternoticeandhearing,mayimposeanadministrativepenaltyagainstthesolarcompany.TheCommissionwasauthorizedtopromulgaterulesandregulationstodeterminetheappropriatepenaltiesforviolationsofproposedlaw,butsuchregulationswouldnotprecludetheconsumer’srighttofileacivilsuitfordamagesorcriminalchargesintheappropriatestateorfederalcourt.Thebillexplicitlyoutlawedthetypicalmandatoryarbitrationclauseforsolarpurchaseorleaseagreementsandstatedthattheinvocationofarbitrationshallbevoluntaryatthediscretionofthesolaruser.
Thelegislationproposeddisclosuresconsistentwiththoseproposedinotherstates,includingfinancialtermsandanyavailablestateorfederalincentives.TheLouisianaproposalalsorequiredsafetyandmaintenancedisclosures,suchasresponsibilityfordamagetotheequipmentortheroof;insurance;andastatementthatrooftopsolarpanelscouldlimitaccessbyafiredepartment.
Nevada:A.B.330proposedtorequiresolarproviderstoprovidewiththesaleorinstallationanexpress,writtenwarrantyforthesystemwhichmustprovidecoverageforbothpartsandlabor.Thesellerorinstalleralsomustprovidewiththesaleorinstallationadescriptionofthewarranty,adescriptionofanyresponsibilityassumedordisclaimedbythesellerorinstaller,andperformancedataforthesystem.Thebillproposedtherequirementsforanyagreementforthefinancing,saleorleaseofadistributedgenerationsystemorforthepurchaseofelectricitygeneratedbyadistributedgenerationsystem.Theagreement,whichmustbeinwriting,wouldhavetomakedisclosuresregarding:themanufacturer,sellerandinstallerofthesystem;thecostandfinancialdetailsofthepurchaseorleaseandthecostofoperatingandmaintainingthesystem;anytaxincentivesrelatingtothepurchaseorleaseofthesystemorthepurchaseofelectricity;andanyrestrictionsorobligationsimposedbytheagreement.Thesellerorlessorofasystemorthesellerofelectricityalsomustprovidewrittenstatementsregardingutilityratesandattestingtothetruthfulnessandcompletenessoftheagreement.Anysuchagreementisvoidableattheoptionofthepersonpurchasingorleasingthesystem,orpurchasingelectricitygeneratedbythesystem,untiltheinstallationofthesystem.Withregardtothecontentsoftheagreement,thebillrequiredthatitincludeanestimateofthecostofelectricityforthepurchaserorlesseeafterthesystemisinstalled.ThebillalsoincludedaregistrationrequirementthroughtheNevadaOfficeofEnergy.Violationsoftheprovisionsofthisbillwouldconstitutedeceptivetradepractices.
Ofnote,ifacontractreferencedthepriceofelectricityprovidedbyapublicutility,thelegislationrequiredaseparate,writtenstatementinatleast12-pointfont,stating:
Utilityratesandutilityratestructuresaresubjecttochange.Foradditionalinformationregardingutilityratesandutilityratestructures,youmaycontactyourlocalpublicutilityorthePublicUtilitiesCommissionofNevada.
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APPENDIXB:CRITIQUEOFTHESEIABUSINESSCODEFORSOLARTRANSACTIONSASASUBSTITUTEFORSTATEREGULATORYOVERSIGHTANDSTANDARDS
ThefollowingsummarizesthekeyprovisionsoftheSEIACodeandprovidesCommentsthatidentifypotentialshortcomingsparticularlyascomparedtotheproposedconsumerprotectionstandardsrecommendedinChaptersIVandVofthisReport:
Unfair,Deceptive,orAbusiveActsorPractices(UDAAP).TheCoderequiresmembersto“regularlyexamineandconsiderthepossibilityofUDAAPviolationsinallaspectsofitsbusinessthattouchonConsumersortheirinterests,includingbutnotlimitedtomarketing,sales,origination,contractterms,contractoptions,installation,servicing,andlossmitigation.”Membersarerequiredto“regularlyremindandtrain“eachemployee”toavoidUDAAPviolations.
RESPONSE:WhilethissectionoftheCodeappearstoattempttorespondtoexistingstate
andfederalUnfairTradePracticeslaws,thereisnoidentificationofwhatconstitutesUDAAPoranyreferencetosuchdescriptionsorexamplesofwhatwouldconstituteUDAAP,althoughanumberofthesubsequentsectionsoftheCodeclearlybuildontraditionalUDAAPcriteria.Noristhereanyrequirementthatmembersdevelopandprovideevidenceoftrainingmaterialsandactualdocumentationoftrainingactivitiesforeitheremployeesorthemember’sthirdpartyagents.
Advertising.TheproposedCodeincludeshighlevelstandardsgoverningadvertising,
including:
“Claimsshouldbeaccurate,easilyunderstandableandbasedonfacts.”“Systemproductioncalculationsmusttakeintoaccountmaterialfactors.”“Projectionsoffutureutilitypricemustbebasedonacceptedsourcesandmethods.”“Endorsementsmustbegenuineandauthorizedbytheendorser.”
RESPONSE:ThereareanumberofvaluableandimportantspecificsincludedinthisSection
oftheCode,includingaprohibitiononreferencestosolarsystemsas“free”,anobligationtospecificallyidentifyanyincentivesandassociatedeligibilityrequirements,andobligationsfordisclosuresofaccurateprices,allpricingdetails,andrequiringfact-basedestimatesthatincludeall“materialfactors.”
CalculationofEstimatedFutureElectricityRates.Oneofthekeydisclosuresassociated
withanyconsumer’sdecisiontoinvestinoragreetoasolarinstallationcontractistherelationshipbetweenthecostofthesolarsystemandthemonthlyleasingorpurchasingcostscomparedtothecustomer’scurrentelectricbillandestimatesoffuturerateincreases.Withregardtoprojectionsoffutureutilityprices,theCoderequiresitsmemberstorelyonatleastoneofavarietyofsources,includingtheU.S.EnergyInformationAgencyapplicabletothestatewherethesystemwillbelocated,stateutilitycommissionorenergyofficepublications,utilityratecasefilings,“historicalutilitypricedataforthesystemlocation”(thesourceforwhichisnotidentified),“industryexpertsorotherqualifiedconsultant,”the“retailsourceorelectricity
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generationsourceservicingthesystemlocation,”and“othersimilarreliablesourcesqualifiedbySEIA.”Further,theCodeallowsthemembertouseamethodforfutureutilitypriceprojectionsrelyingonan“averagegrowthrateusingnolessthanfiveyearsofdataendingwiththemostrecentyearforwhichdataispubliclyavailable,”anddatathatisbasedon“thirdpartysources”withsomelimitations.
RESPONSE:Theserequirementsarenotreasonablebecausetheywouldallowforawide
rangeofpotentialsourcesanddatatobeusedthatcarryahighdegreeofpotentialinaccurateormisleadingprojectedutilityprices.Consumerswouldnothavethenecessaryinformationtocompareoffersacrossprovidersbecauseeachprovidercoulduseadifferentdatasettoestimatefutureelectricityrates.Thisprovisionofthecodedoesnotservetopreventunfairanddeceptiveprojectionsofsavings.AsdiscussedfurtherinactualrecommendationsinSectionIV,anycalculationsoftheimpactofasolarsystemonaresidentialcustomer’selectricbillshouldrelyonthecurrentelectricpriceschargedbytheindividualconsumerandastate-specificandutility-specificapprovedmethodologytoprovidearangeofpotentialfutureutilitybillimpacts.Ofmostimportance,thesolarmarketerorprovidershouldberequiredtoaffirmativelydisclosetheriskthatanysuchprojectionswillbeincorrectandarenotsubjecttothecontrolofthesolarprovider.
SalesandMarketingInteractions.TheCodeincludesrequirementsonrespecting
consumerprivacy,treatingcustomersfairlyandcompliancewithDoNotCalllistsandTelemarketingSalesRules,theFTC’sCAN-SPAMAct,andrelatedstatutes,referencingstateorlocalanalogouslaws.Membersarerequiredtomaintaina“donotcontact”listandensurethattheiragentscomplywithsuchinformation.MembersandtheiragentsmustaccuratelyidentifytheCompanytheyrepresentandavoidstandarddeceptivestatementsandmisrepresentationsthatwouldbeapplicabletoanyretailsalesandmarketingactivitypursuanttomostStateUnfairTradePracticeActs.
RESPONSE:TheobligationsandprohibitionsincludedinthisSectionoftheCoderepeatthe
currentapplicablefederalandstatelawandregulations,almostnoneofwhicharespecifictothemarketingofsolarsalesandleasing.
Contracts.TheCodeincludesrequirementsforcontracts,suchasthatcontractterms
shouldreflectverbalrepresentations;contractsshouldbeclearandunderstandabletoConsumersandcontainallcontractterms;andthatcompaniesshouldallowConsumerstheabilitytorescindcontracts.Standardrequirementsthatthecontractbe“writteninlegiblefont,”andwrittentobe“easytounderstand”areincluded.Thespecific“materialterms”thatmustbeincludedincontracts(andare“recommended”beplacedabovetheCustomer’ssignature)areidentifiedas:
• Costs,• Ownershipterms,• Financingterms,• Warranties,• Consumeroptionsintheeventofahomesale,• Terminationandsystemremovaloptionsandcosts,and• Consumerrightsregardingdamagetopropertyfrominstallation.
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TheCoderequiresthattheprovidermustprovideathree-dayrightofrescission(exceptforsolarsystemsinstalledonnewhomesaletransactions)withareasonablemeansofexercisingthatright.
WithregardtoRenewableEnergyCertificates(RECs),thememberisprohibitedfrom
doublecountingtheREC---byrelyingonitsvalueafterthesaleofitinthetransactionforanyotherpurpose.Further,thecompanyisrequiredtoeducatecustomersaboutRECsandreferthemtoaspecificpublication,“GuidelinesforRenewableEnergyClaims:GuidanceforConsumersandElectricityProviders,CenterforResourceSolutions(Feb.26,2015).IftheagreementassignstheRECtotheCompanyandnottheConsumer,theprovidershould“explain”totheConsumerthattheConsumerhasnorightstotheREC,but“maystatetotheConsumerthatsellsitsRECsthat,bypurchasing,leasingorhostingasolarsystem,theConsumerishelpingadvancesolarenergyintheU.S.,orsimilarbroadpolicyormarketstatements.”
RESPONSE:Theseprovisionsareappropriateinmostcases,buttheyfailtoadoptthe
levelofspecificitythatshouldbeincludedandasidentifiedinChapterIVofthisReport.Furthermore,someoftheobligationsto“explain”certainobligationsorissuestoaffectedcustomersisnotsufficientinthatthereisnorequiredmethodofexplanationorrecordofhoworwhenthisexplanationisgiven.WithregardtotherecommendedstatementsaboutRECs,thespecificadviceoftheVermontAttorneyGeneralasreflectedinChapterIVofthisReportismoreexplicitandaccurate.
Thecodeisvoluntaryandthusdoesnotprovideconsumerprotectionacrosstheindustry. TheSEIABusinessCodeincludesGuidingPrinciplesthatrequiremembersoftheSEIAto“expresslyagreetofollowingtheCode,cooperatewithSEIAandanydesignatedthirdpartyduringanyinvestigationsintoallegedviolationsoftheCode,andcomplywithanyauthorizedactionsbySEIAorthirdpartiestoenforcefindingsmadewithdueprocess.”Inaddition,theCoderequiresmembersto“takecommerciallyreasonablemeasures”torequirethemember’s“contractors,serviceprovidersoragentstoabidebytheCode. RESPONSE:Theseobjectivesarewelcome,buttheapplicabilityofthesepoliciesonlyto“members”andthelackofanymeanstoconductpublicproceedingstodetermineviolationsandassessappropriatepenaltiesaresignificantshortcomings.While“members”arerequiredtocomplywiththeCode,notallretailpromotersorsellersofsolarinstallationsaremembersofSEIAsinceSEIAisavoluntaryorganizationandmemberscancomeandgoastheyplease.SEIAidentifiesitsmembershiponitswebsite,claimingthatthislistincludesover1,000entities,manyofwhomarenotretailsolarproviders,butthosewhocontractwithsolarproviders,lobbyontheirbehalf,orprovidelegalandtechnicaladvice.51SEIAalsoidentifiesthenumberofmembersbyStateandbytypeofentityinvolvedinthesolarindustry.Asexpected,someoftheStateswiththehighestnumberofmembersarethosewithsignificantsolarsalesandleasingactivity,suchasCalifornia,Florida,NewJersey,andNewYork.But,strangely,severalstateswithveryhighsolarmarketingactivities,suchasArizonaandNevada,haveveryfewmembers,lessthan10accordingtothisinformation,andmanyofthoselistedforthesestatesarenotactualretailproviders,butfinancialorotherentitiesthatwouldprovideservicestosolarmarketersandtheiragents.Finally,mostofSEIA’smembersdonotactuallyconductretail
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salesandleasingtoresidentialcustomers,butareassociatedwiththemanufacturing,legalandfinancialconsulting,andadvocatesforsolarpowerbusinesses.
MembershipinSEIAisvoluntary,thusadherencetothecodeisaswell.Further,itisnotclearwhetherSEIAactuallyrepresentsamajorityorevenalargenumberofsolarcontractors,installers,orotherretailmarketingentitiesofferingsalesorleasingofsolarsystemstoresidentialcustomers.
WithregardtoSEIA’sattempttoapplyitsCodetotheagentsofitsmembers,i.e.,thosethird
partyvendorsoragentsthatmayactuallysolicitsalesandleasesfromresidentialcustomersonbehalfofaSEIAmember,theCode’sobligationtouse“commerciallyreasonablemeasures”isaweaksubstituteforaclearobligationthatSEIAmembersareresponsiblefortheactionsandrepresentativesoftheiragentsandwillbeheldaccountablefortheactionsoftheiragents.ThereisnorequirementintheCodethatSEIAmembersprovideevidenceofhowtheircontractorsandagentsaretrainedorhowthemembersarerequiredtodocumenttheiroversightandsupervisionoftheiragentstoassurecompliancewiththeCode.TheCodeisnotenforceableinanymannerthatwouldserveasadeterrenttobadactorsorthatwouldcompensateaggrievedconsumers.
AccordingtoSEIA,itwilladoptmeaningfulenforcementtoolstoensuretheCode“has
teeth.”InSEIA’sviewinternalreviewandtoolssuchasletterstomembersregardingviolations,andsuspensionofmembershipareappropriateandsufficientenforcementactivities.
RESPONSE:SEIAisaprivatenon-profitorganizationwhosememberspayafeetosupporttheSEIAstaffandtheSEIAmission.Thisorganizationhasnogovernmentalorformalenforcementauthority.SEIAcannotprohibitanon-memberfromviolatingitsCodeandcannotrequirenon-memberstorecognizeorcomplywiththeCode.Withregardtoitsmembers,SEIAcannotimposeanypenaltiesonitsmembersforviolatingtheCode.ThesuggestionbySEIAthatitcanissue“letters”orsuspend“memberbenefits”tothosefoundnotincompliancewiththeCodeisaninsufficientenforcementmechanismandwithoutanypreventivevalueorrecompensetoconsumers.
SEIAdoesnotstatehowitwillconductdecisionsaboutcomplianceornon-compliance
withtheCode.CustomersarenotlegallyinformedoftheirrighttocomplaintotheSEIAanddoingsowouldchillthecustomer’slegalrighttofilecomplaintswithothergovernmentalauthorities,includingthestateAttorneyGeneralortheFederalTradeCommission.AllofitshandlingofcustomercomplaintsandallegationsofviolationoftheCodecanandlikelywillbeheldinconfidentialforumswithoutanyproceduraldueprocessrightsandremediesthatareaffordedconsumersbeforestateandfederalregulatoryagenciesandcourts.
Furthermore,thefederalandstateAnti-TrustActsprohibitSEIAandsimilar
organizationstoundertakeanypoliciesoractionasagroupthatmightbeallegedorfoundtobeanti-competitive,thatis,havingtheimpactofthwartingtheabilityofnon-SEIAmembersfromconductingbusinessandobtainingconsumerswhetherornottheycomplywiththeCode.Anymovetocreatea“shield”tothoseproviderswhoagreetobecomeanSEIAmemberandabidebytheCodeora“sword”tolabelcompetitorswhoarenotmembersoftheSEIAandhave
50
notagreedtocomplywiththeCodewilllikelyraiseseriousAnti-Trustclaims.Furthermore,theexistenceoftheAnti-TrustobligationspreventsSEIAandsimilartradeorganizationsfromimposingcertainrequireddisclosureterms,usingcertainplainlanguageterms,creatingbarrierstoentrywithregardtofinancialandtechnicalqualifications,orimposingcustomerserviceperformancecriteria.
SEIA’sSolarBusinessCode,whilecontainingsomeusefulrecommendationsand
provisions,isnotasubstituteformoreformallegislationand/orregulationsgoverningthesolarindustryinitsdealingwithresidentialcustomers.
Thereissomeprecedentfortheseconclusions.Theretailenergymarkethasbeenthe
subjectofdetailedlicensingandconsumerprotectionregulationsandpoliciessincetheonsetofretailcompetition.NoStatehasreliedon“self-enforcement”orindustrycodesofconducttoregulateretailenergyproviders.BoththeNationalEnergyMarketersAssociationandtheRetailEnergySuppliersAssociation(RESA)recognizethisrealityandhavearguedthatsuchprivateregulationshouldnotbesubstitutedforgovernmentalstandardsandregulations,particularlywhenthereisthepotentialfordisparatetreatmentamongsomecompaniesofferingsolarpowerservicesandotherentities,whomaywishtocombinesuchserviceswithothercompetitiveproductsthataresubjecttogovernmentregulation.RESA’srecentcommentstotheNewYorkPublicServiceCommissiononitssuggestionthatdistributedenergyresource(DER)providersmightbeabletorelyonaself-enforcementmechanismwithacodeofconductstated,“Staffshouldhoweverbemindfulthatnoorganizationhastheauthorityorresourcestomonitorandenforceanystandardsthatareadopted.FortheforeseeablefuturethatwillremaintheprovinceoftheCommission.”Evenmoreimportantly,asRESAdescribed,retailenergysupplierswhoarerequiredtobelicensedandregulatedintermsofdisclosureandconsumerprotectionandservicequalityattributesbystateutilitycommissionswillbeofferingDERproductsandservicestoresidentialcustomersthatmaybundleenergycommodityanddistributedgenerationproductsandservices.Asaresult,thereisthepotentialforunfairdiscriminationintermsofregulatoryoversightandconsumerprotectionenforcementthatislikelytohaveanti-competitiveimpactsifsolarprovidersareabletoavoidanydirectordetailedregulationbystatesthroughaprivatelyoperatedself-enforcementmechanism.52
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APPENDIXC:CONSUMEREDUCATIONALMATERIALS
o SolarPowerForYourHomeAConsumersGuide,LSUAgCenterCommunication,2015(partiallyfundedbyEEI)http://www.lsuagcenter.com/en/communications/publications/Publications+Catalog/Home+Improvement/Energy/Solar-Power-for-Your-Home--A-Consumers-Guide.htm
o Energy.govsolarresourceandeducationmaterials:http://energy.gov/eere/sunshot/solar-energy-resource-center-0?Topic=Solar%20Basics_and_Educating%20Consumers
o U.S.DepartmentofEnergy,AConsumersGuide:GetYourPowerFromtheSun.http://www.nrel.gov/docs/fy04osti/35297.pdf
o AHomeowner’sGuidetoSolarFinancing,Leases,Loans,andPPAs.ByNateHausman,ProjectManager,CleanEnergyStatesAlliance.February2015.http://www.cesa.org/assets/2015-Files/Homeowners-Guide-to-Solar-Financing.pdf
o AConnecticutConsumer’sGuidetoBuyingaSolarElectricSystembytheConnecticutCleanEnergyFundhttp://uhaweb.hartford.edu/solarinfo/WebPictures/Consumer_Solar_Guide.pdf
o EnergySagewebsite:https://www.energysage.com/solar
o BetterBusinessBureau,Don’tFallforaSolarEnergyScamThisSummerhttp://www.bbb.org/blog/2012/06/dont-fall-for-a-solar-paneling-scam-this-summer/
o SEIA,ResidentialConsumerGuidetoSolarhttp://www.seia.org/sites/default/files/resources/SEIA%20Residential%20Consumer%20Guide%20to%20Solar%20Power%20-%20June%202015.pdf
52
ENDNOTES1Inpartthisisduetothelowerproductioncostsassociatedwithsolarpanelsgenerallyandtheimpactof
competitionfrommanufacturersinChina.AccordingtoEnergySage,44%ofthesolarpanelsinuseintheU.S.
weremanufacturedinChinaandU.S.solarpanelscostonaverage10-30centsmoreperwattthanimported
panels.http://blog.energysage.com/where-solar-panels-are-manufactured/2Manystatesinitiallyadoptedgenerouspaymentsundertheirnetmeteringpoliciestostimulateanascent
industryandestablishedceilingsassociatedwithnetmeteringcosts.Asthoseceilingsarereachedandthe
costsassociatedwithnetmeteringaregrowing,manystatesarereviewingandreconsideringthispayment
andcostallocationsystem.3SEIASolarMarketresearchReport.http://www.seia.org/research-resources/us-solar-market-
insight/about4SEIA,U.S.SolarMarketSetsNewRecord,installing7.3GWofSolarPVin2015,PressRelease(February22,
2016),availableat:http://www.seia.org/news/us-solar-market-sets-new-record-installing-73-gw-solar-pv-
2015Itshouldbenotedthatutilityscalesolarstillrepresentsthebulkofsolarpower,representinghalfofall
solarinstalledin2015.5Themarketreached72%thirdpartyownershipin2014.SolarCity,oneofthelargestrooftopsolar
marketers,sellsone-thirdoftheU.S.residentialsolar.
https://www.greentechmedia.com/research/report/us-residential-solar-financing-2015-20206However,SolarCityannouncedinearly2016thatitwasterminatingitsMyPowerleasingproduct.Likea
solarlease,ittiedthecustomer'spaymenttoasolarsystem'senergyproduction,butunlikealease,the
homeownerownedthesystemoncetheloanwaspaidoff.See,
http://www.foxbusiness.com/markets/2016/02/27/solarcity-corp-backed-itself-into-corner-with-
mypower-loan.html7ThecommunitysolartransactionisaddressedspecificallyinChapterVofthisReport.8ThesewebsiteswerevisitedinDecember2015-January2016.9AHomeowner’sGuidetoSolarFinancing,CleanEnergyStatesAllianceandU.S.DepartmentofEnergy,p210WilltheSolarLeaseLiveForeverorFlameOut?
http://www.fool.com/investing/general/2014/04/30/will-the-solar-lease-live-forever-or-flameout.aspx11SolarPowerforYourHome:AConsumersGuide,LouisianaStateUniversityAgCenter,2015,
http://www.lsuagcenter.com/portals/communications/publications/publications_catalog/home%20improv
ement/energy/solar-power-for-your-home--a-consumers-guide12http://www.gosolarcalifornia.ca.gov/tools/calculators.php13http://pvwatts.nrel.gov14www.energysage.com15SolarWaterHeat,SolarPhotovoltaics,Wind(All)GeothermalHeatPumps,FuelCellsusingNon-Renewable
Fuels,Wind(Small)FuelCellsusingRenewableFuelsonexistinghomesandnewconstruction.
53
16http://www.seia.org/research-resources/solar-itc-impact-analysis(Accessed11/7/2015)17“SEIACelebratestheExtensionoftheITC,”http://www.seia.org/news/seia-celebrates-extension-itc
(Accessed12/24/2015)18DISCUSSIONPAPERSINECONOMICSWorkingPaperNo.13-05TaxEvasionandSubsidyPass-Through
undertheSolarInvestmentTaxCredit,MollyPodolefsky,UniversityofColoradoatBoulder,November2013
<http://www.colorado.edu/econ/papers/Wps-13/wp13-05/wp13-05.pdf>(Accessed11/7/2015)19SeeSolarCityForm10-QfortheperiodendingSeptember30,2015,filedonOctober30,2015,pp54-55.<
http://investors.solarcity.com/secfiling.cfm?filingID=1564590-15-8928#SCTY-
10Q_20150930_HTM_ITEM_1_A_RISK_FACTORS>(Accessed11/7/2015)20http://www.reuters.com/article/2012/10/09/us-usa-solar-investigation-
idUSBRE8980YL20121009#8LSvOOsxldo35JdC.97(Accessed11/7/15)21http://www.dsireusa.org/DSIRE,theDatabaseofIncentivesforRenewablesandEnergyEfficiency,isa
“comprehensivesourceofinformationonincentivesandpoliciesthatsupportrenewableenergyandenergy
efficiencyintheUnitedStates.”ThedatabaseisoperatedbytheN.C.CleanEnergyTechnologyCenteratN.C.
StateUniversityandisfundedbytheU.S.DepartmentofEnergy.Consumerscansearchbystateorzipcodeto
findcurrentincentivesandpolicies,withoptionstofilterbytechnologyand/orprogram.TheU.S.
DepartmentofEnergymaintainsasimilardatabase:http://energy.gov/savings/search22https://nccleantech.ncsu.edu/wp-content/uploads/50-States-of-Solar-Q3-FINAL_25.pdf23http://www.wsj.com/articles/solar-power-fight-hits-home-in-arizona-143833500024AppendixCliststhemostprominentconsumereducationmaterials.25“AreRooftopSolarCompaniesDoingEnoughtoProtectConsumers?”GreentechMedia.comSeptember24,
2015[visited10/28/2015]26https://www.greentechmedia.com/articles/read/yelp-reviews-of-the-top-us-solar-installers27www.consumeraffairs.com/solar-energy/Thiswebsitewillallowtheconsumertosearchbyspecificsolar
companies.28AttorneyGeneralBrnovichSettlesLawsuitAgainstSolarCompany|ArizonaAttorneyGeneral29ArizonaConsumersEligibleforCriminalRestitutioninSolarRebateScam|ArizonaAttorneyGeneral30http://www.greentechmedia.com/articles/read/sunrun-class-action-complaint.ThiscomplaintisCaseNo.
BC498001.31NewOrleansAdvocateon1/1/2015(http://www.theneworleansadvocate.com/news/11222295-
171/nearly-2m-lawsuit-accuses-sader)(Accessedon11/24/2015):32http://www.azleg.gov/DocumentsForBill.asp?Bill_Number=SB1465&Session_ID=11433HOUSEBILLNo.1320wasintroducedJanuary13,2015.Anamendedbillpassedtherelevantcommitteein
a9-4vote,butthebilldidnotreachthefloorforanyfinalvote.
https://iga.in.gov/legislative/2015/bills/house/1320#
54
34HB1912wasintroducedFebruary2,2015andreintroducedinthreesubsequentspecialsessions.Whilea
proposalpassedcommitteeonavoteof8-3,thebilldidnotreachthefloorforavote.
http://app.leg.wa.gov/billinfo/summary.aspx?bill=1912&year=201535SB214wasfiledApril3,2015anditwasconsideredincommitteeonApril29,2015,butleftpendingatthe
endofthesession.
https://legis.la.gov/legis/BillInfo.aspx?s=15RS&b=SB214&sbi=y36A.B.330wasintroducedMarch16,2015andwasvotedoutofCommitteewithamendments,butno
furtheractionoccurred.
https://www.leg.state.nv.us/Session/78th2015/Reports/history.cfm?DocumentType=1&BillNo=33037OfficeofAttorneyGeneral,StateofVermont,“GuidanceforThirdPartySolarProjects.”[Undated]38SEIAComments,NewYorkPublicServiceCommission,RE:Case15-M-0180–IntheMatterofRegulation
andOversightofDistributedEnergyResourceProvidersandProducts(September24,2015).39www.seia.org(September2015)[©SolarEnergyIndustriesAssociation]40See,Horton,David,“FederalArbitrationActPreemption:PurposivismandStatePublicPolicy,”Georgetown
LawJournal,Vol.7,2013.http://georgetownlawjournal.org/files/2013/07/Horton.pdf41See,e.g.,CommonwealthofPennsylvania,byAttorneyGeneralKathleenG.Kane,BureauofConsumer
ProtectionandTanyaJ.McCloskey,ActingConsumerAdvocatev.EnergyServicesProviders,Inc.d/b/a
PennsylvaniaGas&Electric,DocketNo.C-2014-2427656,OrderDenyingMotionInLimine(December1,
2014);PennsylvaniaPUC,Kibackv.IDTEnergy,Inc.,DocketNo.C-2014-2409676,OpinionandOrder(Aug.
20,2015);MarylandPSC,IntheMatteroftheInvestigationintotheMarketing,Advertising,andTrade
PracticesofAmericanPowerPartners,LLC;BluePilotEnergy,LLC;MajorEnergyElectricServices,LLCand
MajorEnergyServices,LLC;andXoomEnergyMaryland,LLC,CaseNos.9346and9346(b),ProposedOrder
(Oct.23,2015).42Communitysolarprojectsaresometimesreferredtoas“solarfarms”or“solargardens.”43SolarElectricPowerAssociation,“CommunitySolar:ProgramDesignModels,”(December2015).This
Reportisavailableathttp://www.solarelectricpower.org/about-sepa/sepa-news/press-releases/sepa-
report-provides-models-for-community-solar-success.aspx(AccessedDecember27,2015).44TheformeroptionispursuedinamajorityofCSPs.Someofthemainreasonsforthisarethatfew
communitysolarprojectsubscribershavesufficientunderstandingofRECstomonetizethemandthevalueof
asingleindividual’sRECSareoftenoutweighedbytransactionalcosts.Theprojectownercanbetterdraw
valuefromtheRECs,andinmanycasestheyareabletopassthisvalueontotheirsubscribers.Itshouldbe
notedthatmanyworkinggroupmemberspointedoutthatwhenaRECisnottransferredtothecustomeror
retiredonbehalfofthecustomer,thenthecustomerisnotactuallybuyingsolarpower.Inthesecases,
communitysolarprojectownersshouldbeawareoftheFederalTradeCommission’sguidancethat
“marketersshouldnotmakebroad,unqualifiedrenewableenergyclaims,directlyorbyimplication.”See
SEPACommunitySolarReportat11-12.
55
45MarylandHouseBill1087,availableat:http://mgaleg.maryland.gov/2015RS/bills/hb/hb1087F.pdf
(signedbyGovernorMay12,2015).46TheMarylandPublicServiceCommissionvotedtoissueproposedrulestoimplementthecommunitysolar
programandadoptedmany,butnotall,oftherecommendationsoftheOPC.See,RM56,RevisionstoCOMAR
20.62-CommunitySolarEnergyGenerationSystems,availableattheCommission’swebsiteat:
http://www.psc.state.md.us/search-
results/?keyword=RM56&x.x=20&x.y=10&search=all&search=rulemaking47OfficeoftheAttorneyGeneral—AntitrustandUtilitiesDivisions’SupplementalResponsetoExcelEnergy’s
PetitiontoApproveSolarGardenTariff,PublicUtilitiesCommissionofMinnesota,IntheMatterofthe
PetitionofNorthernStatesPowerCo.forApprovalofitsProposedCommunitySolarGardensProgram,
DocketNo.E002/M-13-867(December3,2013).48AttorneyGeneralCommentsat4,citingtoaDenverPostarticle,fn.16.49MinnesotaPublicUtilitiesCommission,IntheMatterofthePetitionofNorthernStatesPowerCo.,d/b/a
XcelEnergy,forApprovalofitsProposedCommunitySolarGardenProgram,DocketNo.E-002/M-13-867
(April7,2014).ThisproceedingsubsequentlyresultedinnumerousfilingsandordersfromtheCommission
duetothelargevolumeofsolargardeninterconnectionproposalsmadetoXcelEnergy,manyofwhomwere
proposalsfortheco-locationofseveral1MWgardenprojectsatonelocationbyoperatorsthatproposedto
servelargercommercialcustomers,givingrisetoconcernsabouttheincreasedcosttoratepayersforthe
subsidypaymentsorderedbytheCommissiontostimulatesolargardendevelopment.50Asincludedinthebill,“Thelegislaturerecognizestheimportanceofensuringpublicsafetyandconsumer
protectionwithanappropriatelevelofregulationthatstillallowsacompetitivemarketplacetodevelop,and
forthisreasonthelegislatureconfersauthoritytotheWashingtonUtilitiesandTransportationCommission
toregulateas"competitiveelectricalcompanies"privatethird-partyvendorswhoproviderenewableenergy
systemsdirectlytoconsumersthroughaconsumercontractandaffiliatesofinvestor-ownedutilitieswho
investcompanydollarstomakethesesystemsmorewidelyaccessible.”51https://www.seia.org/directory[Visited11/16/2015]52RetailEnergySupplyAssociation(RESA)Comments,NewYorkPublicServiceCommission,RE:Case15-M-
0180–IntheMatterofRegulationandOversightofDistributedEnergyResourceProvidersandProducts
(September24,2015).
