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Rooftop solar customers get hoodwinked in more ways than one

on March 05, 2015

A crackdown by Arizona authorities on rooftop-solar flim-flam in that state is, at the least, a potent reminder to consumers nationwide to beware the come-ons and rosy promises offered by some of the vendors in that industry. Yet, the kind of blatant fraud that was uncovered by the state's attorney general only hints at a subtler yet much bigger problem with the way rooftop solar systems are being pitched to the American public in general.

While the offender in this case, Going Green Solar, has agreed to repay customers up to $111,000 to settle a consumer-fraud lawsuit filed by the Arizona Attorney General's Office last month, no one at any level of law enforcement seems to have arched an eyebrow at a core business practice in the rooftop solar industry that can be even more deceptive, more pervasive—and more lucrative.

Some major solar vendors lease rather than sell solar systems to homes and businesses, lowering the up-front cost of installation and thus luring more customers. What a lot of those same customers don't realize, though, is that because the vendors retain ownership of the hardware, they are able to keep the solar-energy tax credits for themselves and their investors. That, despite the fact that some are huge corporations—like billionaire Elon Musk's SolarCity—and they reap untold millions in rewards under such generous subsidies.

Meanwhile, the customers often have little to show in the way of cheaper utility bills. After accounting for their monthly lease payments, rank-and-file ratepayers can find their household finances are a wash—or even that they are losing money on the deal.

As far as we can tell, such arrangements are legal—but are they ethical? Don’t prospective rooftop-solar customers deserve full disclosure about how these lease deals really work?


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