Thursday, February 8, 2024

Rooftop solar panels: warning lights are flashing

 

Time magazine warns that "The Rooftop Solar Industry Could Be on the Verge of Collapse".  It's a long and very detailed article, but worth reading if you have (or are considering putting) solar panels on your home.  Here's an excerpt.


A decade ago, someone knocking on your door to sell you solar panels would have been selling you solar panels. Now, they are probably selling you a financial product—likely a lease or a loan ... Solar customers across the country say that salespeople obscure the specific terms of the financial agreements and cloud the value of the products they peddle. Related court cases are starting to pile up. “I have been practicing consumer law for over a decade, and I’ve never seen anything like what we are seeing in the solar industry right now,” says Kristin Kemnitzer, who represents Jones and says her firm gets “multiple” calls every week from potential clients with similar stories.

Angry customers aren’t the only reason the solar industry is in trouble. Some of the nation’s biggest public solar companies are struggling to stay afloat as questions arise over the viability of the financial products they sold to both consumers and investors to fund their growing operations. 

These looming financial problems could topple the residential solar industry at a time when solar is supposed to be saving the world.

. . .

At the root of these struggles is the complicated financial engineering that helped companies raise money but that some investors and analysts say was built on a framework of lies—or at least exaggerations. 

Since at least 2016, big solar companies have used Wall Street money to fund their growth. This financialization raised the consumer cost of the panels and led companies to aggressively pursue sales to make the cost of borrowing Wall Street money worth it. National solar companies essentially became finance companies that happened to sell solar, engaging in calculations that may have been overly optimistic about how much money the solar leases and loans actually bring in. 

“I’ve often heard solar finance and sales compared to the Wild West due to the creativity involved,” says Jamie Johnson, the founder of Energy Sense Finance, who has been studying the residential solar industry for a decade. “It’s the Silicon Valley mantra of ‘break things and let the regulators figure it out.’”

. . .

Meanwhile, the pressure for fast sales may have led some companies to look the other way when salespeople obscured the terms of the solar panel leases and loans they were selling in order to close a deal. Consumer lawyers have made allegations about salespeople fudging consumer incomes on loan applications so they could qualify; telling them they’d get a tax refund for solar panels even if their income wasn’t high enough; and sending important documents to fake email addresses so consumers wouldn’t see them and protest ... Consumers don’t catch these extra costs in part because salespeople often present documents to potential customers on tablets or phones, making it easy to skip over the fine print.


There's much more at the link.

Shady business practices - which, in my opinion, amount to outright fraud if they're as described - appear to abound in the industry.  Certainly, the sales pressure from solar vendors is unending.  Over the past year I must have had at least a dozen visits from contractors working in the area, wanting to know if we'd like to sign up too.  My invariable answer is "No" - but that doesn't stop them parroting their sales spiel, trying to change my mind, refusing to take "No" for an answer.  Unfortunately for them, I did the math years ago, and that decided me not to bother with rooftop solar as a permanent electricity solution.  I have solar panels, sure, but only as a backup recharging tool for use with portable power packs in emergencies.

Basically, I guess it's a case of caveat emptor - let the buyer beware.  (Or, as P. T. Barnum was alleged to have said - and fast-talking salespeople appear to have adopted as a mantra - "There's one born every minute"!)

Peter


19 comments:

Rick T said...

The issues around leased panels is why we purchased our system in California outright and will do the same on our new home in Arizona.

When we were selling our old house it was amazing how our realtor tensed up when I said we had solar panels then immediately relaxed when I said we owned them outright. I imagine the buyers had the same reaction.

MrGarabaldi said...

Hey Peter,

it doesn't help that it appears that the manufacturer of the panels appear to be Mainland China and they have a pile of problems of their own, and they are relying on the Xiden administration to pass more of the "Go Green" stuff to pass more subsidies to keep them afloat as they shuffle money around. and it is like musical chairs on the Titanic, you don't want to be holding the note when the bills come due.

Mikey said...

Your homeowners isurance may not cover damage to solar panels on your roof. A whole bunch of these have appeared in my neighborhood and we are weeks away from hail season which is very serious business around here. We're going to see people stuck with a finance plan and destroyed panels that they will have to pay for out of pocket. It's going to get interesting.

Celia Hayes said...

My daughter is a licensed real estate agent in Texas, and she tells me that the matter of solar panels on a house for sale are ... problematic. Does the lease of the panels carry over to a new buyer of the house? What if the new purchaser doesn't want the panels on the roof? What if the company has gone out of business? How about getting the roof repaired - who removes and then replaces the panels. A lot of chickens coming home to roost, with regard to solar panels, now.
I wouldn't want them on any house that I owned - ugly as unvarnished sin, and the fire hazard for improper installation ...
Perhaps if I had a place with a couple of acres, out in the country, an array of panels on a sunny hilltop, and a feed down to the house itself. But not on the roof.

Peteforester said...

These people show up at my door from time to time. They're obnoxious. They won't take no for an answer. They won't leave when I tell them to. The only thing they understand is "Last chance to leave before I get the shotgun." Really. I had to do that once. In another instance I was in my garage when one of these people showed up. I told him I wasn't interested as he stepped into my garage. I told him to get out of my garage. He stepped back to the outside of the garage. I told him to get off my property. He wouldn't leave. I told him I was closing to garage door, and that he'd better back away or he'd be hit with it. The door wasn't a "roll-up" door. It was a tilt-up "California door." I pushed the button. He stood there as the thing was coming down on him. He jumped back at the last possible second to avoid being hit, and then told me I purposely tried to hit him with the door. I told him that both audio and video had been recorded on my camera system, if he thought he was going to try and make a case out of it. He left and never returned.

There is NO WAY I will lease my rooftop to these people!

Paul M said...

Uhh, Solyndra? Nothing wrong with solar panels as a point of use for off-grid situations, or as you do, charging individual back up devices...but seeing rooftops covered in them (ugly) under the auspices of "free energy" (at a high price)...well, that was ripe for an industry take-over by the Timeshare Sales snake-oil types. When private equity firms (aka Wall Street) get involved (like they did with Student Loans, etc, etc) things go to hell pretty quick..they should be outlawed. (hahaha, yeah, that'll happen)

Old NFO said...

+1 on Mikey, along with decreasing output year to year, and roof damage due to weight, leaks, etc.

glasslass said...

Our area has very few homes with any solar panels. Big push started so I looked up benefits and cost of disposal. Saw on a blog about a man who had to replace some. So I went searching for a landfill who would take them. We had none in our state or surrounding us. I would have to haul them 4 states away and the cost was in the thousands. Nope, not for me.

JNorth said...

A house across the street from me got an array of them last summer, not sure if it is a similar issue, my parents in AZ own theirs, it makes sense down there, generates enough to power the AC in the summer. Up here I doubt they will ever see a return on their investment unless electrical prices really climb.

Anonymous said...

So many red flags, so little time. Some things I found out about rooftop leased solar arrays. YMMV.

— Leased solar panel systems are often sized based on established household power consumption. Problem is, there often is not enough properly oriented rooftop to install the panels for optimal output. The array has to be installed anyway, so the excess panels are installed facing north or east, or even in shade. The problem comes when the lessee/ homeowner is leasing a 10kwh array, but only producing 7kwh because part of the array is facing in the wrong direction. In effect, he’s buying the power twice— once in the form of the power lease, and again —to make up the shortfall— from the power company. AFAIK, the makeup invoice is only submitted by the power company annually/semiannually, so it can be shockingly high.

—Grid tied leased systems are generally designed and built to shut down during power outages to prevent backfeed, so no backup power from your array when the grid is down.

— FHA/mortgage companies may restrict lending for a home with a lease, since the lease must be transferred or bought out at time of sale. AFAIK, the solar company lease asset takes precedence over the mortgage if transferred, so in the event of a default on the mortgage, the bank is second in line in claiming the asset.

— In northern states, array output is reduced by 50% (or more) during winter months, assuming the array was optimally faced and angled at installation. Snow kills almost all output, but not the lease payment. Paying for power, twice, again.

— AFAIK, if you need to replace the roof under the array during the lease period, you will have to pay the solar company to decommission and uninstall the system, and the reinstall the system on the new roof. Or you could just buy out the lease and scrap the array.

—And so on…

Grumplestiltskin

Texas Mike said...

I looked into solar a few years ago here in NTX. Thought I'd take advantage of the almost 30% federal tax credit. Unfortunately, all the installers know about that tax credit and jack up the price to make sure they get the benefit, not you. And yes, their loan practices were predatory. Low interest rate, but a huge "point buy" up front to get that low rate which they hide in the fine print. I only found it because the first company I talked to I said I'd pay cash. Their price was so much lower than the others it made me suspicious. I'm talking $10-15K finance charges up front, rolled into the loan amount. And oh-by-the-way, their 12-year payback calculations assumed ridiculous compounding electrical rate increases.

Side note, all 3 sales reps (3 different companies) were driving Tesla Model S or Model X. They were making a killing.

The Wraith said...

As a couple of folks have observed, BUYING a solar system can make sense, especially for those of us in sunny climes. Anyone who leases a solar system, which is basically giving some corporation ownership of part of your home, is the heir to the throne of the kingdom of fools.

Anonymous said...

It is difficult, very difficult, to fathom that it is in any way reasonable to lease a solar system. Then again, there is an epidemic of stupid in America. This scheme makes P.T. Barnum's infamous statement seem trite and restrained.
Indeed, I am inclined to think that any who fell for this deserve what comes.

Dan said...

The industry is a corrupt cesspool of liars and con artists. In May 2022 I signed a contract to have a grid tied battery storage/solar panel system installed. To date I am out $40 thousand dollars and NOT A DAMN THING HAS BEEN ACTUALLY DONE to install ANYTHING. It's a RACKET. Do NOT fall for the bullshit and hype. If you MUST have solar insist that you will not pay ONE PENNY till the system is installed, approved and operational.

RCPete said...

One of our neighbors was talking with an outfit to do a leased solar system. It was pretty clear to me that the system was a lot smaller than what they really needed if they wanted to replace all grid power, and the monthly cost of paying for the system was rather greater than the worst-case winter power bills.

The company was bound and determined to start work before they signed anything. Eventually, the neighbors managed to bail from the mess before anything got installed.

I've done two solar systems for our place. One was a prototype and is mounted on a flatbed trailer. When we lose power, it's big enough to run the fridge and freezer. Later, I used the same basic design for a larger ground-mount system that runs our well. There's enough power to spare if the grid goes down for long. Not a lot of power, but enough to help.

And both systems are all paid for.

Will said...

Commercial panels are rated for 3 inch hailstones at a minimum. No idea if residential systems are using commercial rated panels.

Gerry said...

Our local energy coop won't allow tie in from solar panels anymore.
No reason given.

Zenshu O'Reilly said...

So....the "safest" path - assuming there actually is one - is to own one's solar panels outright, avoiding complicated and intricate encumberances.

Which means "cash out of pocket" to purchase and own the panels outright as opposed to some convoluted financial slight-of-hand scheme. I wonder how the amount of that "cash out of pocket" compares in the long term, "long term" being the effective service life of solar panels (about 20-22 years with current technology), to the benefit received, as in "the pure ROI," of what benefits could be obtained from spending that same sum on less sexy energy improvements such as controlling air infiltration, more and/or better insulation, windows and doors with greater insulation value, a more efficient furnace, etc.

Sherm said...

Had a client in yesterday. He was counting on using his $7500 tax credit to pay down his $20k loan. I had to tell him that it was a nonrefundable credit and that, if this year was like last, his credit would be less than $1000 and it would simply reduce what he owed, not put money in his pocket. He was a very unhappy camper. He asked me to wait 20 minutes or so to call the police so he'd have a bit of time with the solar panel sellers before they arrived.