Category: Residential Solar


  02:57:00 pm, by Jim Jenal - Founder & CEO   , 902 words  
Categories: Solar Economics, Residential Solar, Ranting

3 Solar Company Ploys that Cost Consumers

All solar companies market themselves, Run on Sun included.  But lately we’ve come across some particularly puzzling ploys being touted by some companies as if they were a benefit to the consumer, when all they really are is a way for the solar company to cut their costs at the consumer’s expense!  Let’s peel back the onion layers on these three ploys to see what is really going on…

Ploy #1 - “We Can Give You A Solar Quote - No Home Visit Required!”

One of the major solar companies built its entire business model around this ploy, and a bunch of aggregator sites have popped up offering much the same thing: a quote on a solar power system without ever visiting the consumer’s home.  Certainly for some folks - the very busy or the very shy - this might sound appealing.  You can get a quote for your system without ever having to deal with those pushy salespeople. 

The advantage to the solar company should be pretty obvious - they avoid the time and expense of sending a vehicle and a salesperson to your home, thereby saving the salesperson for only those potential clients where a face-to-face meeting is required.

So how does this ploy cost consumers?  The simple truth is that no one can properly install a solar system without actually coming to your home and seeing the actual conditions on the ground.  While satellite images are great for making preliminary assessments, there is just too much that could affect the ultimate cost of the system that cannot be determined remotely.  For example, the other day we noticed a sag in a roof while taking our measurements.  Upon closer inspection it was discovered that one of the roof rafters was split and caused the roof to sag.  That damaged rafter needs to be repaired or replaced before solar can be safely installed.  The homeowner was completely unaware of the situation until we pointed it out to him.

When a solar company gives you a quote without having performed a comprehensive site evaluation, their quote will be hedged as “preliminary, subject to revision following engineering review."  Which means that after you sign the contract, they will “discover” the issues that they should have told you about initially.  But now you will have signed a contract and to move the project forward you will have to accept a change order increasing your cost.  Great deal for the solar company, not so much for the consumer.

Ploy #2 - “We Will Install Your Solar System in One Day!”

This one to me is a real head scratcher - the solar company that brags that they will install solar on your home in one day!  Seriously?

This is neat work

Work this neat takes time!

Solar power systems, when installed correctly, should provide you with trouble-free operation for twenty years.  Given that time frame, do you as a consumer really care whether the install takes one day or four?  Frankly, in ten years of doing this, we have never had a client ask if we could complete the installation in one day.

Of course, that doesn’t mean that clients aren’t concerned about how the installation will be done, they are.  But they are interested in knowing that it will be done right, and right the first time.

The solar company promoting this ploy wants to suggest that they have this so dialed in that it will take them no time at all.  But what is really happening is that they are telling their crews to throw it up on the roof and move on to the next job.  That translates into lower labor costs for the solar company (i.e., more money in their pocket), but no real benefit for the consumer.

The simple truth is that craftsmanship takes time.  You, the solar consumer, are going to be living with this for the next twenty years - maybe that extra day or two will actually inure to your favor!

Ploy #3 - “We Will Install Solar For Free!”

This may be the scammiest ploy of all.  The solar company prominently displays that they will install solar on your home for free!  And who doesn’t love free, right?

Of course what this really means is that the solar company wants you to sign on to a 20+ year agreement (either a lease or a Power Purchase Agreement) to pay them every month for the privilege of having that “free” solar on your roof.  The end result is that you end up paying as much as twice as much to that solar company as you would have if you had purchased the system outright - and you still won’t own it even after twenty years!

And yes, I know that not everyone has the cash on hand to purchase a system outright, but there are better options than leasing.  For consumers with good credit, a home equity line of credit will be way cheaper than going with a solar lease.  If your credit is not so great, you could look into PACE financing which is not tied to personal credit.  PACE is more expensive that a HELOC, but still a better deal than a solar lease.

Caveat Emptor

At the end of the day, all of these ploys work in the solar company’s financial interests, and not the consumer’s.  The folks that dream up these schemes are shrewd - consumers need to be just as shrewd if they are to avoid getting fleeced!

Happy New Year!


  04:38:00 pm, by Laurel Hamilton, Projects Coordinator, Run on Sun   , 635 words  
Categories: All About Solar Power, Solar Economics, Residential Solar, Ranting

Direct Ownership of Residential Solar Systems Will Surpass Third-Party Systems in 2017

When deciding to invest in a photovoltaic solar system one of the first questions everyone has is how to finance the cost. While solar continues to be a great long-term investment, with payback periods often in the 4-7 year range, the hefty outlay is more than many homeowners feel comfortable fronting. Hence, the concept of the zero-down solar lease financing model and third-party system ownership (TPO) was born. While SunRun invented the model in 2007, the three behemoth national solar companies - SolarCity, Vivint Solar, and SunRun - rose to the top over the last five years due to the popularity and ease of the model for customers. Until this year, nearly 100% of Vivint Solar’s business was with solar leases and power purchase agreements (PPA’s).

However, as we at Run on Sun point out to all of our potential clients and in various blog posts, solar leases are simply a bad deal. And, what do you know, finally the wider public seems to be coming around to this fact! GTM’s recent report, “US Residential Solar Financing 2016-2021“, showed that for the first time since 2011, direct ownership of residential solar systems will surpass third-party ownership in 2017. The solar lease has been rapidly decreasing in popularity since it peaked in 2014 with 72% of the market. GTM predicts that in 2017 55% of residential solar systems will be bought outright through cash or loans, and the trend will continue with 72% of all systems sold owned directly by 2021.

GTM Residential Installations by Type 2010-2021

GTM Research: Residential TPO Penetration and Installations by Ownership Type, 2011-2021

There are several factors at play in this shift. The total cost to go solar has declined rapidly in recent years meaning the upfront cost continues to be less frightening. Today there are more attractive solar loan options available to homeowners as well. One popular option in California is the PACE (Property Assessed Clean Energy) government loan program which is repaid as an assessment on the homeowners property tax bill. Mosaic is another solar loan program available nationally. While loans do have interest rates and dealer fees to be aware of, the benefits of owning a system outright far outweigh the costs of third party ownership - such as financially damning escalator clauses, the inability to take the tax credit or local rebates, and the risk of selling your home to buyers who don’t qualify for (or want) the solar lease. 

Overall growth of the solar industry is also beginning to slow this year. After growing at more than 50% annually for the last four years, the residential market is expected to see a slower growth rate of 16% this year. The report shows that growth has slowed among all solar installation companies, but much more so for the top three national companies who previously relied upon the popularity of the solar lease. For the first time since 2013, these three will together install less than half the market’s solar systems as their growth slows to just 12%. By contrast, growth among the remaining solar power installation market will slow to 36% according to GTM. It will be interesting to see how the “big three” handle this shift in the coming years.

One thing to note is that while growth is slowing among the largest companies, solar continues to grow overall. Smaller local companies have always offered, and preferred, to sell systems outright rather than through leases and these companies are becoming more popular as more research shows the true value of ownership vs leasing. As one of those companies, we have always stood by the data and educate all our clients on the realities of financing options as the last thing we want is to be in the business of locking people into a twenty-year-long bad deal! Curious as to the specifics of leasing vs owning? Check out our blog from almost two years ago: Top Five Reasons to Stay Away from that Solar Lease! 


  12:14:00 pm, by Jim Jenal - Founder & CEO   , 1654 words  
Categories: All About Solar Power, PWP, SCE, Residential Solar, Ranting

Understanding Tiered vs TOU Rates

A client of ours noted that Pasadena Water and Power (PWP) offers, in addition to its regular, Residential tiered rate structure, the option to switch to a Time-of-Use rate structure, and he asked if he would derive additional savings from making that switch. Turns out that is not an easy question to answer, and there certainly isn’t a “one size fits all” result. We decided to take a closer look into these rates both for PWP and for the folks in Southern California Edison (SCE) territory.

SPOILER ALERT - The following is pretty much down in the weeds.  You have been warned!

Defining Tiered and Time-of-Use (TOU) Rates

Let’s start by defining our terms. Most residential electric customers, of both PWP and SCE, are on a tiered rate structure. That means that there are two or more cost steps - called tiers - for the energy that you use. Tiered rates assume that there is some minimally expensive charge for the first allocation of energy per billing cycle, and that as you use more energy your cost for energy increases. For example, SCE’s Domestic rate has three tiers and in the first tier the charge is 8.8¢/kWh, in the second tier the charge is 16¢/kWh, but the final tier is 22.4¢/kWh! (There  is also a non-tiered component that adds another 6.9¢/kWh to the customer’s bill.)

PWP, on the other hand, has a somewhat perverse tier structure in that the lowest tier is very cheap, 1.7¢/kWh, the second tier is significantly higher, 13.5¢/kWh, but the final tier actually goes down to just 9.9¢/kWh! Since the whole point of tiered rates is to provide an incentive for heavy users to reduce their usage, PWP is actually rewarding those who consume more than 25 kWh per day with lower rates! Very odd.

Time-of-use rates, on the other hand, are generally not tiered. Instead, the day is broken up into segments and the cost of energy varies depending on the segment in which it is consumed. PWP refers to these segments as “On-Peak” (from 3-8 p.m.) and “Off-Peak” (all other hours). But PWP’s TOU rate retains the tiered element as well, making it a truly odd hybrid rate structure.

SCE’s approach is more involved, dividing the day into three, more complicated segments: “On-Peak” (2-8 p.m. weekdays - holidays excluded), “Super Off-Peak” (10 p.m. to 8 a.m. everyday), and “Off-Peak” (all other hours).

For both PWP and SCE there is a seasonal overlay on these rates, with energy costs increasing in the summer months (defined as June 1 through September 30).

(It is important to note that both PWP’s and SCE’s TOU rates put the most expensive energy in the late afternoon to evening time period - pricing energy to offset against the “head of the duck.” Ultimately, these rates will create the energy storage market in California, but that is a post for another day.

Analyzing the Benefits of a Rate Switch - Pre-Solar

Assuming that one can create a spreadsheet to model these different rates (not a small task in and of itself!) there is one more hangup - data. Both PWP and SCE report total monthly usage to customers on their tiered rate plans - but in order to analyze your potential bill under a TOU rate, you must have hourly usage data for every day of the year! (Because there are 8,760 hours in a [non-leap] year, such a usage data collection is typically referred to as an 8760 file.)

The standard meters that PWP has installed simply do not record that data, so the average PWP customer has no way to know whether they would save money by making the switch.

On the other hand, most SCE customers do have access to that data and they can download it from SCE’s website.

After you create an account, login to it and go the “My Account” page. On the left-hand-side you will see some options - click on “My Green Button Data” (the too cute by half name for the interval data you are seeking), select the data range for the past twelve months, set the download format to “csv” and check the account from which to download. Then press the “download” button and cross your fingers - in our experience, the SCE website fails about as often as it actually produces the data that you are seeking!

Modeling PWP

Given that PWP doesn’t have data available, is there any way to estimate what the results might be? The answer is, sort of. We took an 8760 data set from an SCE customer and used that as our test data for both PWP and SCE. (The data file does not identify the customer.) Since the data file has an entry for every hour of every day, we can segment the usage against the On-Peak and Off-Peak hours, and using a pivot table - probably the most powerful took in Excel - we can summarize those values over the course of the year, as you see in Figure 1.

PWP segmented usage

Figure 1 - Usage Profile for PWP

Summer months are highlighted in orange. For this specific energy usage profile, Off-Peak usage is more than twice that of the On-Peak usage (9,806 to 4,009 kWh respectively). So how does that work out when we apply the two different rate structures? The table in Figure 2 shows the details of the two rates:

PWP standard and TOU rates

Figure 2 - PWP Rates - Standard Residential and TOU

Under both rate plans, the distribution is tiered (with the perverse reverse incentive for usage above 750 kWh). Added to that is either the seasonally adjusted flat rate for energy, or the seasonally adjusted TOU energy charge.

Applying those rates to the Usage Profile in Figure 1 allows us to see what the energy and distribution components would be under both approaches. Given the hybrid nature of these rates, you might expect them to be similar and you would be correct. The distribution charge - which applies to both - comes to $1,180 for the year. The flat rate energy charge comes to $893, whereas the TOU charge is $985. Meaning that someone electing to use the TOU rate would have a yearly total of $2,165, whereas the flat rate user would have a total bill of $2,074, making the TOU rate - for this specific energy profile - 4% higher.

Beyond that, PWP has a number of other charges - such as a public benefit charge, an underground surtax, and a transmission charge - that are only tied to total usage, so the ultimate difference between these two rates is even smaller.

Modeling SCE

SCE rate structures are significantly more complicated that PWP’s. For example, the tier 1 (aka baseline) allocation varies by location. Since SCE covers such a huge and diverse area from cool coastal regions to absolute deserts, customers are allocated more energy per day in their baseline depending upon where they live. In the area around Pasadena that is covered by SCE, a typical daily baseline allowance would be 13.3 kWh in the summer and 10.8 kWh in the non-summer months. The baseline then is that number times the number of days in the billing cycle. Tier 2 applies to every kWh above baseline, but below 200% of baseline. Tier 3 applies to everything beyond that. As with PWP, the tiered rate only applies to “delivery” charges. The energy generation charges are the same all year. Here’s what that rate structure looks like:

SCE Domestic Tiered rate

Figure 3 - SCE’s Tiered Domestic Rate

The first thing that you notice when you look at this rate is how much higher it is than the rates from PWP, and the end calculation bears that out - the same usage that resulted in an annual bill of $2,074 in Pasadena becomes $3,227 once you cross the border into Altadena, South Pasadena, San Marino, or Sierra Madre - an increase of 56%! (There’s a reason why a growing percentage of our clients are coming from those surrounding, SCE-territory communities!)

So what would happen if this beleaguered client were to shift to a TOU rate? First, we need to re-parse the usage data according to SCE’s more complicated segmentation scheme, which gives us Figure 4:

SCE segmented usage data

Figure 4 - SCE’s Segmented Usage Data

Once again, the On-Peak usage is the smallest category of the three, amounting to just 23% of total usage, compared to 42% in Off-Peak, and 35% in Super Off-Peak.

Of course, SCE can’t do anything in a simple fashion, so they have not one but two basic approaches to their TOU rates, Option A and Option B.  Option A rates run from a low of 13¢/kWh (in summer Super Off-Peak), to 29¢/kWh (during summer Off-Peak) to an eye-popping 44¢/kWh (during summer On-Peak).  However, Option A includes a credit of 9.9¢/kWh on the first baseline worth of energy which reduces the monthly bill by roughly $30.

Option B deletes that baseline credit and replaces it with a “meter charge” (even though it is the same meter!) of 53.8¢/kWh/day, or roughly $17/month.  In return, the On-Peak charges are significantly reduced from 44¢/kWh to just 32¢/kWh.

So how does this shake out?  The results are quite surprising, as shown in Figure 5.

SCE rate comparison - Tiered vs TOU

Figure 5 - SCE Rate Structure Comparison

The two left columns show the month-by-month calculations for both delivery (the tiered component) and generation (the flat component).  The two right columns show the month-by-month calculations for the two different TOU rates.

The bottom line is striking: under TOU-A there is a savings of 5% over the tiered rate, whereas the savings jump to 19% by going to TOU-B!  That is a savings of $600/year just by changing rate plans - a switch that any SCE customer can make.


The results displayed here are entirely dependent on your actual energy usage and no two usage profiles are alike.   It is possible, even likely, that some usage profiles will see an increase in bills under either TOU option.

The good news is, that for a nominal fee,  this is an analysis that we could do for any SCE residential customer - we would just need access to your usage data.

So that completes our pre-solar analysis. In our next post, we will look at how these results change when you add a solar power system into the mix.


  02:01:00 pm, by Jim Jenal - Founder & CEO   , 1049 words  
Categories: Residential Solar, Ranting

Solving the Solar Sustainability Problem

Editor’s Note: This is the third of a three-part series asking the question: Is Solar Unsustainable?  You can find Part One: Shoddy Work here, and Part Two: Shady Business Practices here.

It is easy enough to cast aspersions, but it is far more valuable to offer suggestions for improvement.  Having devoted 3,000 words to the former, it is time offer some thoughts on the latter.

Too Big to Fulfill

Time to restore trust in the solar industry

I attended a solar workshop sponsored by our favorite distributor, BayWa r.e., and I heard the head of a solar company offer what might have been the saddest assessment of success I had ever heard.  This man had built his company to become the largest player in his region, but most of the time, he said, “I wish I could go back to being just two guys and a truck."  Growth is hard, and with it comes the risk of shoddy work creeping into your projects.  (Indeed, one of the jobs that we highlighted in our first post was done by a company that once had a great reputation, but grew too fast and lost control of quality.)

When a company becomes too big to fulfill its obligation to provide top-quality work, it is too big.

A greater emphasis on training is one way to grow while still keeping the quality high.  NABCEP is a good step in that direction, but companies need to support their employees to get the training that they need. (Of course, this says nothing about companies that are looking to rip people off - they represent an entirely different type of problem.  More about dealing with them later.)

From Customers to Clients

Right now the solar industry treats consumers like customers, and that’s a problem.  Customers represent a transactional relationship - gas stations and fast food restaurants have customers.  The customer hands over their money and gets a commodity in return - end of story.  But purchasers of solar power systems are entering into a long-term relationship with the product that we are selling - quite likely the longest lived product they will ever own, short of the house itself.  A relationship can only last that long when it is founded in trust, and that is the nature of a client relationship. 

Recognizing that we are entering into a client relationship changes the focus from the short term transaction to the long-term process of building confidence.  That means starting with absolute candor and at every step in the process enhancing the client’s trust.  The solar professional owes the client three duties: a duty of candor, a duty of communication, and a fiduciary duty.  The consequence of those duties is that you have to keep your client in the loop, and you must safeguard your client’s financial well-being.

How do you fulfill those duties?  By communicating clearly at every step in the process, identifying and disclosing problems as they arise, and by providing comprehensive contracts and then living by that contract (i.e., keeping change orders to a minimum).

Time to Come Clean

Solar companies need to provide comprehensive disclosures to their clients.  At a minimum, such disclosures should include:

  • All of the major components (specific solar panels, inverters, racking) to be used on the project, and the per item cost of each;
  • If financing is being proposed, the total cost of that financing;
  • Savings calculations that are actually tied to the client’s utility rate structure (or a structure to which the client is entitled to transition);
  • All assumptions (such as utility rate increase percentage, system output degradation, etc.), built into any lifetime savings computation.

Such comprehensive disclosures would eliminate the scourge of “generic solar systems,” and would allow consumers to make more accurate comparisons of competing bids.

Guiding the Market’s ‘Invisible Hand’

I spoke about many of these issues on a panel this week as SPI.  There was a great deal of agreement among the panelists, despite our disparate backgrounds ranging from a (refreshingly progressive muni utility) to Sunrun to me.  But the one comment that bothered me the most came from industry veteran and CALSEIA board member, Ed Murray.  In response to my stated concern that the bad business practices documented in my first two posts in this series constituted a serious threat to the industry, Mr. Murray’s response was that “the market will take care of it, bad companies will fail and the good ones will survive, hopefully without too much of a black eye to the industry.”

If only it were that easy.

We rejected such laissez faire notions with the rise of the modern regulatory state decades ago, and to suggest that the solar industry can or should survive without additional regulatory involvement is misguided.  The solar industry is far less regulated here in California than it is in many states.  For example, to participate in the solar incentive program in New York solar installers must be NABCEP certified.  Such a requirement here in the largest solar market in the country would go a long way toward cleaning up our act.

CALSEIA has a consumer complaint process - consumers who feel they’ve been badly treated by a solar company in California can start the process by clicking here to fill out their complaint form - but the process itself is secret, and the rest of the consuming public never learns about those complaints.

Similarly, utilities often have experience with bad solar contractors who do shoddy work, but they don’t publicize what they have learned so the public remains uneducated about the bad actors out there.  That should change.

Unfortunately, that leaves us, for now, in a position where the burden remains on the potential client to do the homework needed to find a reliable contractor.  NABCEP’s member list is a good resource (although made less so since you can no longer sort results by zip code), as is CALSEIA’s.  State contractor’s boards - responsible for licensing contractors - are a good source to verify that the contractor is properly licensed, and to determine whether there are any outstanding complaints against them.  (For California, here is a link to the “Check a License” page at the state contractors board.)  Yelp, Angie’s List, and the BBB can all be helpful.  But consumers must demand to be treated like the clients that they are, and reject solar companies that fail to honor that demand. 


  10:04:00 am, by Jim Jenal - Founder & CEO   , 1579 words  
Categories: Residential Solar, Ranting

Is Solar Unsustainable? Part Two: Shady Business Practices

Editor’s Note: In Part One of this three-part series on the crisis facing the residential solar industry, we wrote about the growing potential for a client backlash due to the increasing prevalence of shoddy work.  Today in Part Two we turn to an even greater threat to our industry’s sustainability: the unethical, and sometimes outright illegal, business practices employed by some solar companies.

Solar companies used to have a pretty simple business model: find a potential client (usually because they contacted you), do a site evaluation, write up a bid, sign a contract, and do the job.  The density of solar companies in a given area was pretty low so there was very little direct competition.  There was no such thing as social media and you never heard an ad for a solar company on the radio.

How Can You Compete with Free?

Tear up that contractBy the time we founded Run on Sun in September 2006, that model was starting to change.  SolarCity was a thing, but its lease model wasn’t.  Major players like Sunrun, Vivint Solar, and Verengo did not yet exist.  But with the dawning of the California Solar Initiative in 2007 and the end of the cap on the federal ITC in 2008, the solar industry was turning into the Wild West.  Add in the collapse of the housing market at the end of 2008, and all of those investor dollars that had been earmarked for mortgage-backed securities had to go somewhere else.

Voila, enter the solar lease (and its evil cousin, the residential PPA).  Readers of this blog know that Run on Sun has never offered leases, and we have explained our reasons for avoiding leases in great detail many times.  Yet for awhile, they were all the rage.  As one potential client who decided to go with a competitor’s lease explained to us, “How can you compete with free?"  Of course, those leases were far from free, but he had a point.  If the leasing salesperson glosses over the details, as numerous lawsuits have alleged that they do, the consumer being pushed to sign on the dotted line may get swept away with an offer that sounds too good to be true.

Proper disclosures would go a long way toward solving this problem, but the solar industry certainly isn’t pushing them.  Indeed, driven by the largest players in the industry, trade groups generally resist calls for standardized disclosures under the absurd logic that the marketplace will handle this itself.  Ah yes, the “invisible hand."  But when the leasing giants bring armies of marketers, pushy salespeople, and corporate lawyers into the marketplace, what chance does the average consumer have?  This is an unfair fight and it is stacked against consumers - our potential clients - and the powers that be know that, and are ok with it. 

But that approach is unsustainable.

Why Buy a Generic Solar System?

Even crazier than the lack of proper financial disclosures is the abject failure to even disclose the products that are going to be placed on the consumer’s roof and left there for the next twenty years!  We are constantly being contacted by people who have been pressured to sign a contract for what can only be described as a generic solar system.  When you press them on the details it turns out that the high-pressure solar salesperson never disclosed the actual equipment that is being proposed. 

A gentleman who called the other day is representative - he has been talking to SolarCity for six months but all he knows is that they are purporting to put a “6.6 kW solar system” on his roof for $27,000, to be financed over 20 years at 3% interest. That 6.6 kW system starts out at $4.09/Watt (not a deal, even in SoCal) before you tack on an additional nearly $9,000 in interest over the life of the deal, bringing that actual cost (before ITC) to $5.45/Watt!

But here’s the kicker - this homeowner does not even know the make or model of the panels that will be on his roof.  He doesn’t know what type of inverter will be used, or its make or model.  And he certainly doesn’t know what sort of racking is going to hold this all together.

So let me just ask you this: who among you would spend $36,000 on a generic car?  No info on the car at all, other than you are stuck with it for the next twenty years and it is a generic, four-door sedan.  I submit no one would; and yet, major players in the solar industry are asking consumers to purchase an over-priced generic solar system, every day of the week.

That is not sustainable.

A Confusing Canvass

Years ago I worked for an environmental group that funded its operations in part by way of a canvass; that is, eager young men and women who would fan out each evening into a targetted neighborhood going door to door, explaining our work and trying to encourage strangers to contribute.  My role in this process was to educate the canvassers on the policy issues that we were then pursuing so that they could answer questions with homeowners at their front door.  If that sounds like a tough way to make a living, it is.  Many canvassers are paid on commission - have a dry night and you come up empty.

But some of the environmental group’s canvassers were consistently successful.  They had the moxie to press until they could close - and if that meant stretching the truth a bit, or a lot, they felt it was alright because they were working in service to a greater good.

And so it seems to be with solar canvassers.  The ones who succeed won’t take no for an answer, and they are apparently comfortable saying whatever is necessary - regardless of how disconnected it might be from reality - in service of the good of getting more solar on more roofs.  Or is it more in the nature of self-service, just plain old greed?

Run on Sun doesn’t run a canvass, but we regularly hear from potential clients who have had someone camp out on their doorstep and all but refuse to leave until the hapless homeowner signs a contract.  (We spoke with one woman, not a native English speaker, who had signed a contract with a canvasser who would not leave, for a system roughly twice the size of what could effectively be installed on her roof.)  More distressingly, these tactics seem to be especially aimed at senior citizens, who for whatever reason, find it harder to turn these people away.

Is there anyone out there who enjoys being on the receiving end of such high-pressure tactics?  Of course not.  So why do we subject consumers to them?  That’s simple, because they often work, at least in the short term.  And if all you care about is the short term, then this works for you as a solar company.

But it is unsustainable.

Lead Astray

Which brings me to lead generation, quite possibly the most annoying aspect of solar business models today.

Several times a day, each and every day, we receive emails imploring us to purchase leads for hot solar prospects.  Once or twice we have followed up on a proffered lead that was provided to us, only to discover that the person on the other end of the phone is irate over having been called twenty times in the last two days when all they did was try to make use of a “free” solar calculator on a website that required them to submit their contact info before they could use it.

Many lead gen mills use robo dialers to repeatedly call potential customers, and often do so without concern for such niceties as the National Do-Not-Call registry.  Such tactics might generate leads, but they are also illegal, and the solar company that contracts with the lead gen mill is liable for their conduct - as Verengo found out when they were sued and forced to settle the case for more than $2,000,000.

By definition, that which is illegal is unsustainable.

Backlash Building

Customer experienceNo industry can long survive treating it’s customers with such contempt.

The graph of customer experience for SolarCity is from the BBB website serving the San Francisco Bay area.  82.9% of SolarCity’s customer reviews were negative!  Now it certainly stands to reason that unhappy customers are more likely to write a review than happy ones, but a six to one ratio is a troubling statistic no matter how you spin it.

Not just class action lawyers are taking notice, as state Attorneys General and even members of Congress are calling for investigations into questionable business practices of solar companies across the country. 

For example, Arizona’s Attorney General, Mark Brnovich, has brought multiple cases against solar companies for fraudulent business practices, including this one against the aptly named, Stealth Solar, alleging that the company made fraudulent claims:

Some examples of those statements include: “cannot even add one cent to your personal budget,” its customers can “save tons of money every single month,” and that “utility bills will rise 8-14% per year if you don’t get a PV System”.
The Arizona Attorney General’s Office received approximately 50 consumer complaints against Stealth. Many customers did not receive the promised savings and even experienced an increase in their electricity outlay due to the cost of solar equipment.

We ignore this building backlash at our peril.

In my final installment I will offer some suggestions for change from within the industry—before it is imposed upon us from without.

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Jim Jenal is the Founder & CEO of Run on Sun, Pasadena's premier installer and integrator of top-of-the-line solar power installations.
Laurel Hamilton is Run on Sun's Projects Coordinator, and together they author this blog.
Run on Sun also offers solar consulting services, working with consumers, utilities, and municipalities to help them make solar power affordable and reliable.

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