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.
By 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.
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.
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.
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.
No 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.
Here in SoCal we are blessed with endless warm sunny days. The down side however is that it can be many months between invaluable air-purifying rain showers. For your solar array, this means there is nothing to wash away the accumulated dust and detritus from nearby trees. In summer months ash from nearby mountain fires adds to the mix. Consider this a Run on Sun PSA…
IT’S TIME TO RINSE OFF YOUR PANELS!!
These panels needed to be cleaned just to get the inverter to turn on!
(Didn’t help that the installer put the panels under a tree!)
When discussing solar with new clients often the topic of cleaning comes up. This is because some solar companies use the concept of cleaning your array as a way to convince you you need a leased system with ongoing maintenance. However, we believe this is a bit of a scam. You don’t need to pay someone to get up on your roof with a squeegie every week. Most home owners have the ability to douse dusty panels from the ground with a strong nozzle attached to a garden hose. Really the benefit is nominal unless it has been six months since the last rain, such as the case in Southern California. As for cleaning the panels, rinsing with a hose is fine (though some insist that is heresy and only deionized water should be used). Do it first thing in the morning so there is no thermal shock to the panels.
Check out this recent case study that brought this issue to our attention:
Shiny new panels at Chandler School
Last week we heard from a client who did some great analysis using the Enphase monitoring on their system before and after he decided to clean his panels. He found there was an 8% improvement in the period after cleaning. Run on Sun’s CEO Jim Jenal compared this to the monitoring on another system (Westridge School) which wasn’t cleaned and had a similarly unshaded southern facing array. Over that time period Westridge School’s daily average production reduced 8.66%. This means that our client actually had an increase of production of 16.6% by cleaning his panels!
Generally, cleaning an array results in an improvement of between 5-10%, so his panels were exceptionally impaired by the fallout from our summer fires! Not surprisingly, given his location in the foothills of the San Gabriel Mountains. However, for anyone in the Los Angeles metro area, early September is a great time to get out and restore the shiny clean sheen to your array. After all, who knows when the first winter rain will come?
Next week at Solar Power International, I will be a speaker on a panel looking into the future of the residential solar industry. My message to my fellow solar professionals will be this: as it is presently constituted, the Solar Industry is unsustainable, and unless we change and change soon, we will face a backlash from eroded client confidence. The consequences of that backlash will do more harm to the industry than anything the Koch brothers, ALEC, or the Edison Institute can conjure, and we will have no one to blame but ourselves.
I am dividing this series into three parts - the first two deal with the problem we are creating (shoddy work and shady business practices) whereas the third outlines my prescription for change. I don’t expect everyone in the industry to agree with my observations or recommendations, but at the very least we should agree that a conversation needs to begin, and to the extent that it has begun, it must be expanded.
This first installment is concerned with the shoddy, fly-by-night work that is becoming way too prevalent out there. A growing piece of our business involves addressing problems that exist in the installed base of solar system owners. These are folks, many of whom paid top dollar (sometimes overpaid outrageously) and yet ended up with inferior work that is now failing, has already failed, or should never have been allowed in the first place.
We are big fans of microinverters, but some amounts of shade even a microinverter cannot cure. Tellingly, the geniuses that built this system didn’t bother to use microinverters! We got a call to replace a dead string inverter at this older woman’s home. Turns out she has two systems (and two string inverters) - one on her main house, and this one on her guest house. Just one small problem, the array is entirely underneath a tree!
Pretty much every day, all year round, that array is shaded. In fact, that is not just dirt on those panels, that is accumulated sap from the tree that has created a layer of crud that no hose will ever be able to remove. Indeed, when we replaced the inverter, it could not turn on because the combined grit and shading - even in the middle of a summer day - was so extreme that there was not enough power for the inverter to switch on.
Who in good conscience would sell such a system? The homeowner did not realize how big a factor that tree would be, but certainly the installer knew (or should have known). This is the result of someone willing to make a few bucks off an unwitting senior citizen even though the installer knew that the system would never provide the promised benefit to the homeowner.
Take-offs are great, when you are in an airplane with a proper pilot at the controls. Not so great when the take-off in question is the entire array ready to launch itself from the hapless homeowner’s roof. Check this out:
This is a tilt-up system, mounted on a north sloping roof face, tilted toward the south. Ok, that has a host of potential issues given that our strongest, most dangerous winds all come from out of the north, so if you are going to do something like this, you want to make sure that it is properly engineered and properly installed. It is abundantly clear that this system was neither.
Take a look at how that L-foot is attached to the roof. These are flat concrete tiles, and the installer appears to have removed the tile and attached a hanger bolt (hopefully into a rafter), then drilled a hole through the tile and re-inserted it over the bolt. (The little daub of sealant is a nice touch - given that there is no flashing of any sort to be found.) The L-foot is floating on the end of that bolt and the bolts are deforming under the load.
I feel bad for the manufacturers of racking gear who see their products misused in such an extreme fashion. (In fact, the manufacturer of this racking expressly disclaims using its product for this type of reverse tilt application!) The last picture shows that the installer - perhaps nervous as to the strength of his creation - added some ad hoc pieces of black rail to cross brace the structure, attaching them to the tilt-up legs and railing with Tek screws, as opposed to the through-bolts, washers and nuts that the manufacturer provides for tilt-up racking.
That system has been in place for a few years and when the homeowner tried to contact their installer about a problem, the installer never returned their calls. The roof is already leaking (no surprise there) and it is anyone’s guess as to how long it will be until that system takes off for a destination unknown. The homeowners had no idea what the system actually looked like (this is on top of a two-story house and they had never been on the roof) until I showed them these pictures. They paid top-dollar for this installation but all they’ve received in return is a leaking roof and an accident waiting to happen.
This is another instance of senior abuse - the homeowner was an elderly man who had already installed one solar system on his property, but it wasn’t meeting his needs so he hired a second company to expand his system. After he died, we were called in to assess the state of the system for the estate. The entire system was a disaster, but this one photo pretty well sums it up - the people doing this work simply did not give a damn.
That didn’t stop them from extracting top dollar - the elderly gentlemen paid $50,000+ for a 5 kW system addition, three years ago! (It turns out that the contractor responsible for this abomination has multiple complaints against him with the AG’s office and has had his license revoked.)
Here is the real kicker with this project - they pulled a permit and had plans approved by LA County (I saw them). Those plans called for the conduit run that is presently flying between the two buildings to be buried in a trench a minimum of 18″ below grade - which is code. But that was never done and somehow this still got approved!
Which brings me to the other real scandal here - on top of those doing this shoddy work - everyone of these installations should have been inspected, and presumably they were. But none of them should have passed, so how did they?
Our experience with inspectors varies greatly. Many are extremely diligent, looking closely at every component, and wanting us to open every box and remove each dead front (they are always astonished by the sheer beauty of Velvet’s work so we are always happy to oblige). But there are others who don’t even go on the roof, thereby doing a terrible disservice to the homeowners who are counting on the inspector’s expertise to protect them from these sorts of nightmares.
Lest you think that this is just a California problem, believe me it is not. We previously posted a photo from a New Jersey based company that has a webpage devoted to New Jersey’s ugliest solar installations, and some of them are truly appalling. Nor is the scourge of shoddy work even a uniquely U.S. problem, as the Facebook group, Crap Solar, highlights some of the worst solar installations Australia and New Zealand have to offer.
But as the US solar leader, it is up to California solar companies to lead the way. We need to do better.
In Part Two we will look into solar business practices that are making the industry unsustainable.
Going solar isn’t the only thing you can do to reduce your electric bills and your environmental footprint. In fact, the first thing you should consider is how you could make your home more efficient BEFORE investing in solar. Investing in a solar system that is bigger than you really need is just a bad investment strategy since efficiency upgrades are often much more affordable than the solar system required to offset the ineficient loads.
One option is to hire a professional to give you a thorough energy audit which will help to pinpoint where your electrical hogs are and what you can do to improve efficiencies. Alternatively, there are a lot of relatively simple steps you can take if you know what to look for. Changing out your old light bulbs to LEDs is an obvious and easy fix for example. But one of the biggest and often under the radar culprits that I’m here to tell you all about are pool pumps.
Pool pumps can have such a big effect on your electric bill that we always discuss it when doing a solar site evaluation at any home fortunate enough to have a pool. Of course we don’t recommend eliminating your pump altogether as they are necessary to keep your water filtered and clean. So what is the solution? There are all sorts of newer “efficient” pool pumps out there and likely your pool guy/girl will happily install if you say you’d like an upgrade. However, what you really need if you want to make a dent in your electrical load is something called a “variable speed” pool pump.
A variable speed pool pump is exactly what it sounds like… Rather than pumping water with a consistently high speed you really only need max power at the outset to get the water moving. Once its moving the variable speed pump then downgrades the output power to keep the water moving since less energy is required to keep something moving than to get something going from a standstill. This reduced speed equals reduced energy loads!
We have heard clients who installed variable speed pumps have seen reductions on their bill on the order of over $500 per year!
The downside for these pumps is often the price is much higher than regular pumps. But I come bearing good news! Many utilities offer rebates and incentives for Energy Star qualified pool pumps. In our home turf of Pasadena, California we are fortunate to have a very proactive utility, Pasadena Water and Power, striving to help residents lower their footprint. They normally offer a rebate of $400-$450 off the sticker price for a variable speed pump. However, I was just notified that PWP is running a promotion on all of their energy efficient appliance rebates through October 31st, 2016:
“PWP is offering a $900 (bought outside Pasadena) to $950 (bought locally) rebate to all PWP residential electric customers who replace their old pool pump with a new energy efficient variable speed or variable flow pool pump and motor. Replacing older inefficient pool pumps with new efficient models will not only help you reduce energy use but save you money. With the summer heat and the possibility of rolling blackouts, PWP wants to make sure you do your part to conserve energy."
We couldn’t agree more! Check PWP’s rebates listing for a list of other rebates to take advantage of. The listed prices on the website include the current promotion.
If you’re not in PWP’s service area, never fear! You can check if your utility has rebates on the Energy Star website.
After you’ve addressed all the drafty windows, switched out your lightbulbs and upgraded all your appliances, then it is time to give Run on Sun a call (626-793-6025) and we’ll help you offset the rest of your energy needs!
Ten years ago this month we founded Run on Sun—which, to paraphrase Vice President Biden, “was a pretty big [freaking] deal." Think about it: when we started in 2006, the California Solar Initiative didn’t exist, the federal tax credit was capped at $2,000, and looming in the near future was the Great Recession.
Despite that inauspicious start, we have gone on to install solar at major schools like Westridge and Chandler, ditto at countless homes around SoCal, and we have been honored to make Solar Power World’s list of the Top Solar Contractors four years in a row! It has been quite a ride and we are ready to celebrate!
We are planning a party to share our achievement with our wonderful clients in the coming weeks (watch your email for an invite soon!), but today we want to invite our neighbors to join us in greening their energy. For all new clients who sign contracts with us during the month of September we will be offering a Birthday discount of $500 off the proposal price! This applies both to folks who already have proposals in their hands as well as those who get a proposal during the month.
But September is a short and busy month so you need to act now!
Click on this link to request a free solar site evaluation, or just give us a call at 626-793-6025 or 310-584-7755.
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