Arizona readies consumer protections for solar leasing as installers protest

Dive Brief:

A new Arizona consumer protection law, SB 1465, will require increased clarification for homeowners from solar leasing companies about the cost of the systems they install over the contract life, beginning in 2016. The companies must also guarantee whatever performance they promise for the modules. And consumers will now have at least three days to cancel a contract after signing.
The solar companies say legislators were pushed by Arizona’s utilities to put the protections in place to slow the rapid growth of rooftop solar in the state. Some 35,000 systems have been installed since 2012.
A $93 per month lease with a 2.9% per year escalator allows a homeowner to have the benefits of solar for a total cost of about $30,000 over the 20 year contract life, rather than paying $17,300 upfront. Investors in the solar companies’ funds own the leased systems and get the owner’s 30% federal investment tax credit, other tax benefits, and a part of the revenue stream.

Dive Insight:

Solar leasing pioneer and sector leader SolarCity has suffered allegations of shoddy installations but has the Better Business Bureau’s A+ rating. Installers say that the Arizona law is unnecessary — that there are already ample regulations in place and that delinquent companies are punished.

“The Arizona Attorney General recently charged Stealth Solar with false claims that misled customers and found the principals guilty and punished them," said SolarCity General Counsel Seth Weissman.

Arizona installer Going Green Solar admitted fraud and paid $250,000 to settle claims it conducted high-pressure sales and made false promises.

For solar leasing, Weissman said, “there are at least 12 to 15 statutes in place…Regulation M under the Fair Trade Commission (FTC) governs solar leasing, the same law that applies to car leasing…Selling solar systems with financing is governed by the Truth in Lending Act, Regulation Z. There are uniform deceptive and unfair trade practices acts and FTC’s Fair Credit Reporting Act. The industry is well-governed.”