Harnessing the power of solar energy is just one effort many eco-conscious consumers consider when looking to reduce their carbon footprint. A lower energy bill is the goal. Yet the endeavor can at times lead to more headaches and cost than consumers anticipated.
Following an uptick in consumer complaints against solar panel companies, we remind Iowans to be prepared for a myriad of issues that can crop up when exploring solar panel installations.
Solar energy is a clean, increasingly affordable power source, so it’s great to see more Iowans considering installing panels We encourage consumers to do their research before signing contracts.
From 2019 through 2021, the Attorney General’s Consumer Protection Division received 15 total complaints regarding solar energy systems. So far in 2022, the division already has received 40 complaints.
Many consumers have reported problems before, during and after installation of solar panels. Complaints received have included the following issues:
- Delays in solar panel installation.
- Exaggeration of energy savings.
- False promises to buy back power.
- Exorbitant financing and fees.
- Claiming false relationships or endorsement of energy companies.
- Improper installation.
- Defective solar panels.
- Warranty service failures.
- Non-communication from solar companies.
- Denial of solar tax credits.
- Failure to cancel and provide a refund.
- Failure to provide contracted services.
- Property damage at time of installation.
In many cases, consumers who have started the process of purchasing solar panels have spent thousands or tens of thousands of dollars on the systems. However, at some point the solar company either fails to install the panels, improperly installs the panels, or fails to honor repairs under warranty.
One Iowan told the attorney general’s office that less than a year after purchasing a solar panel system, the company he purchased from was on site to make repairs for defects. However, the system was improperly reassembled and left in a nonfunctioning state. Numerous attempts to contact the company via e-mail, telephone, social media and written letter have been unsuccessful.
It is expected that the solar industry will slow in 2022 in the face of manufacturing and supply-chain challenges. This could further affect the speed at which installations and repairs occur.
Another complaint received by the attorney general’s office: A potential customer sought information from a company after receiving an advertisement that claimed the system could be installed at “no cost out of pocket.” The consumer filled out a form and was immediately contacted by a solar company. The representative for the company quoted the system at $30,140. When asked about the “no cost out of pocket” ad, the rep told her she was unaware of such a deal.
Another consumer wrote the attorney general’s office after being denied a solar tax credit after the annual limit passed by lawmakers was reached on the solar credit appropriation. The consumer noted that they had carefully budgeted the cost of the system to include the credits. Remember, tax credits reflect government policies, so there is no guarantee that solar tax credits will be available in the future.
It’s important to remember there are no free solar panels. If a solar company offers to install solar panels on your home for no money down, it will likely be part of a solar lease or power purchase agreement. According to the Federal Trade Commission, consumers pay a monthly rate for the energy the solar panels produce under these agreements. The solar company you lease through will retain ownership of the panels and benefit from any solar tax credits.
While the average solar lease may save consumers money, that continues only if things go smoothly. If a consumer signs a solar lease and changes their mind, sells their home or the system experiences production issues, consumers can run into costly bills.
As for tax credits, the Iowa Solar Energy System Tax Credit expired at the end of 2021. The state made the decision at that time not to pay out credits to customers who were on the waitlist for residential solar systems. According to the Iowa Department of Revenue, the credits had paid an average of $3,498 to each applicant during the 2020 cycle.
If you are considering the purchase of a solar energy system, the Federal Trade Commission suggests taking several steps before agreeing to a contract:
- Review your utility bill to see how much energy you used in the last year and what it cost. See what part of the total bill is for “metered” electricity or kilowatt-hours (kWh) of usage and what is for other items such as delivery costs. Even if you reduce the number of kilowatt-hours you buy from the utility, you’ll still need to pay the utility’s fixed charges, like delivery or administrative costs.
- Evaluate how you use energy and look for ways to reduce your home’s electricity use. Make your home and appliances more energy efficient and ensure your home is properly weatherized to reduce your energy needs.
- Consider how long you plan to stay in your home. A residential solar system is designed to stay on a home for at least 20 years. Leases and power purchase agreements generally are long term; some last 20 years. If you think you might move in that time, find out how installing a system will affect your ability to sell your house. Ask the solar company about its policy on transferring the contract to the new homeowner after a sale and confirm that what it tells you is the same as what is in the contract.
- Figure out what size system you need to meet your average energy usage. Learn about the different products available in your area that will work on your house. The customizable calculator from the Department of Energy uses your address and details you provide about a system to help you estimate how much energy it will produce.
- If you have a homeowner’s association, find out if you need its approval to install a system.
Solar systems use one or more inverters to convert direct current (DC) electricity from the solar panels into alternating current (AC) electricity used by your appliances and outlets. The amount of power you get from a solar panel system depends on:
- the average number of hours of direct, unshaded sunlight your roof gets annually.
- the pitch (angle), age and condition of your roof, and the compass direction it faces.
- the size and strength of your system.
- environmental factors such as snow, dust or shade that may cover the system.
Contact your utility to see what arrangements it makes with homeowners who produce solar power. Your utility may use “net metering,” which pays you or gives you credit for excess power your system produces during the day and returns to the grid.
The Iowa Utilities Board offers a helpful consumer informational guide for on-site generation meant to assist residential or small businesses that are considering installing electric generation on their property. Additionally, the FTC provides consumers with additional helpful tips and considerations when it comes to the purchase of solar panel systems.
Finally, remember that the installation of a solar system is still a home improvement project like any other. Protect yourself just like you would if you were hiring for a kitchen remodel or a roof replacement. Take steps such as getting everything in writing, limiting up-front payments, setting a start date and completion deadline, specifying the scope of the work and the equipment that will be installed, verifying advertising claims (for example, is the advertised electrical generation based on Iowa use or on panels located in a state that is sunny all year), etc. See additional suggestions on the attorney general’s contractor checklist.
If you have encountered issues purchasing a solar panel system, you can file a complaint with the Iowa Attorney General’s Consumer Protection Division here or call 515-281-5926 (in the Des Moines area) or 888-777-4590 (outside the metro area).
Tom Miller is the Iowa attorney general. He may be reached at firstname.lastname@example.org.
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