In the last 10 years, the Texas solar industry has grown tremendously. According to the Solar Energy Industries Association (SEIA), Texas has had 63,466 solar installations completed and was ranked second in the nation for solar growth behind California in 2019.
The solar industry growth in Texas can be attributed to two state laws passed in 2011 and 2015, HB 362 and SB 1626 respectively. HB 362 limited homeowners associations (HOAs) from restricting the installation of solar panels. To comply with the law, homeowners that lived in neighborhoods with HOAs had to follow the normal procedures for seeking improvements, including a written request or application to an appointed Architecture Review Committee or similar council. However, even with the law, homeowners still had difficulties obtaining approval for solar panels from their HOAs
. In 2015, Texas lawmakers passed SB 1626 which further helped homeowners. The law closed previous loopholes that allowed developers to prohibit homeowners in residential subdivisions from installing solar panels on their homes during the development period. The law specifically stated, “developers of expanding neighborhoods larger than 50 homes may not ban solar devices.”
As the demand and use of solar panels grew in Texas, BBB began seeing more solar companies open, which quickly led to an increase in complaints filed with BBB against Texas-based solar companies. From 2010 to 2014, a total of 70 complaints were filed against solar companies.
However, from 2015 to 2019, over 1,000 complaints were filed. Upon analyzing the complaints, BBB found a common theme among the problems consumers experienced against solar companies.
What issues do consumers face?
BBB Serving the Heart of Texas has received numerous complaints alleging a variety of issues from poor installation, panel performance issues, bad customer service, receiving inaccurate information on the federal solar tax credit, and the terms of financing.
Nevertheless, BBB found the primary issue to be misleading and unsubstantiated claims about the savings and benefits of having solar panels. The common misconception about installing solar panels is that your electric bill will be eliminated or significantly reduced. However, it’s not that simple and in some cases, isn’t true.
The estimated savings depend on several factors including the current and predicted future price of electricity, your current electric usage, the hours of direct sunlight your home receives, and the size of your roof and solar panel system.
Without acknowledging all these factors, BBB found companies often claiming, and in some cases guaranteeing, that installing solar panels will save them thousands of dollars or eliminate their electric bill. Several consumers reported this issue after their electric bill had little to no savings once installing solar panels and other solar devices. These consumers told BBB that they later discovered their solar company provided an inadequate number of solar panels and that it would not provide the savings they were initially told.
Additionally, consumers told BBB they were misled into believing the federal solar tax credit would come in the form of a refund as opposed to credit by the IRS. Some consumers were also led to believe the interest rate of their loan was at a fixed rate, only to later find out the rate was a promotional rate that increased after a year.
BBB & Government Actions Against Solar Companies
Since 2015, BBB has conducted over 30 ad reviews and investigations against solar companies. Many of these investigations were initiated due to advertising concerns related to savings claims and insufficient financing information. After BBB challenged these claims, most companies made the necessary modifications to its advertisements that may have misled consumers about the potential savings and added disclosures regarding its financing.
However, in some cases, BBB found that businesses made promises or guarantees to the amount of savings verbally. In 2017, BBB investigated Fort EPC, LLC, a solar power company owned by Abe Issa, which was also known as Worth Electric, LLC. BBB received several consumers complaints alleging business representatives stated they would achieve a specific percentage of savings if they installed its solar panels. BBB contacted the business requesting information on what steps it was taking to rectify the situation. The company responded stating if it found its system was working properly and savings were not being met, it would work with the consumer to resolve the issue. Nevertheless, BBB still received complaints and the business obtained an F rating due to its pattern of complaints.
In 2018, Fort EPC, LLC agreed to a permanent injunction with the Texas Attorney General for violating the Texas Deceptive Trade Practice Act and the Home Solicitation act. The injunction barred Fort EPC from operating in the solar industry.
BBB initiated another investigation against a solar company called Apex Home Energy Savings, LLC in 2018 after several consumers filed complaints alleging business representatives overstated the amount of savings they would obtain. Additionally, BBB found concerns with the financing claims on its website like “$0 down” and “New Solar System Starting a $65 A Month” due to the fact the company did not disclose if the offer was available to all consumers or dependent on credit availability.
BBB contacted the business to address these issues, which the company responded to, but failed to adequately address BBB’s concerns. In May 2020, Apex Home Energy Savings, LLC, and its owner, Bryan Wayne Shellenberger, agreed to a permanent injunction that prohibited them from operating in the solar industry.
Both Apex Home Energy Savings, LLC, and Fort EPC, LLC are no longer in business.
Are there any protections for consumers?
During the 86th Texas legislative session, lawmakers introduced SB 2066. The proposed bill required certain contract disclosures for sellers or lessors of solar panel systems. The disclosures include contact information of the salesperson, a description with the total cost of the solar panel system, a detailed accounting of fees associated with the installation or operation of the system, and representations made as part of the agreement regarding the expected operational performance and financial performance.
While the bill was not passed during the legislative session, Texas does have laws to protect consumers from high-pressure salesmen. For example, the Home Solicitation Act grants the consumer the right to rescind certain home solicitation transactions and requires that certain information be given by the merchant to the consumer at the time of the transaction. The Texas Attorney General cited the violation of this law in a 2018 lawsuit against E-Grid Tech, LLC, another Abe Issa owned solar company.
It stated the business must “provide each Consumer with a complete copy of their executed sales contract and any other materials describing the qualities or quantities of goods or services offered or sold during the door-to-door sales call or transaction covered by the Home Solicitation Act in the form and format required by the Home Solicitation Act”.
Additionally, many states have passed mandatory solar contract disclosure policies that vary from state to state. The purpose of the disclosures is to provide consumers with key information about their solar panels and guard against potentially misleading savings claims.
According to the Clean Energy States Alliance, state-level mandatory solar contract disclosure policies have been adopted in Arizona, California, Florida, Hawaii, Illinois, Maryland, Minnesota, Missouri, Nevada, New Mexico, New York, North Carolina, Oregon, Utah, and Washington.
Shopping for Solar
Before moving forward with purchasing or leasing a solar panel system, complete the following actions:
• Review your utility bill and see how much energy you used in the past year along with the cost.
• Evaluate how you use energy and determine if there are ways to reduce your usage. For example, purchasing more energy-efficient appliances and HVAC systems.
• Figure out what size panel system you need, then use the customizable calculator from the Department of Energy to help you estimate how much energy it will produce.
• Contact your utility to see what arrangements it makes with homeowners who produce solar power.
• Determine if you need your homeowner’s association permission to install a solar panel system.
Next, decide if you will be purchasing, leasing, or obtaining a power purchase agreement for your system. If you decide to purchase your system, you can pay for it with a home equity loan, or get financing through the installer, a bank, a credit union, or a finance company.
With financing, remember to ask your installer:
• How much is due upfront?
• What is the annual percentage rate? • How are the payments calculated?
• Will the payments change during the financing term?
• Is there a balloon payment?
• How long will I be making payments?
• Will a lien be placed on my home or system?
• Do I have a right to cancel this financing, and for how long?
Furthermore, you may be eligible for federal, state, or local tax credits or other incentives. The federal renewable energy tax credit for homeowners is 26 percent of the cost of the system in 2020. The credit will decrease in 2021 and is scheduled to expire at the end of the year. The Department of Energy has information about state-specific incentives for using renewable energy. Depending on local net metering rules, you may also be eligible for your utility to pay you for power your system returns to the grid. Finally, obtain bids from two to three companies and compare them to one another. Each bid should have specific information about the system, such as:
• Any applicable warranty, including if the solar panels consist of a performance and product warranty.
• The full cost of installation, including any fees
• The size and expected performance of the panels Be sure to check a company’s BBB profile to look up contact information, complaints, and customer reviews. Additionally, verify the business has its required electrician license.