Louisiana Solar Leasing Report. Alliance for Affordable Energy. July 27, 2012

Transcription

1 July27,2012 LouisianaSolar LeasingReport Alliancefor AffordableEnergy TheAllianceforAffordableEnergyadvocatesforfair,affordable,environmentallyresponsible communitybasedenergypolicyinlouisianaandthenation.withafocusonregulatorypolicy, cleanenergyandsustainablerebuilding,theallianceseekstoprotectlouisiana'sratepayers fromrisingenergycostsandhealththreateningpollution.wewatchdogbothoflouisiana s regulatorybodiesaswellaslocalelectricandgasutilities.

2 TableofContents SummaryofFindings 3 Introduction 4 Methodology 4 Results 5 DiscussionofTechnicalIssues 8 ConclusionandRecommendations 10 Appendices AppendixA:InvestigationQuestionnaire 12 AppendixB:SampleChecklistforSolarLeasingCustomers 13 2

3 SummaryofFindings TheAllianceforAffordableEnergyisastrongsupporterofsolarleasingwhenitisdoneeffectively. Recently,wereceivedcomplaintsfromratepayers,solarinstallers,andlocalutilitiesabouttwo companiesthatofferleasingagreements,saderpowerandgreengrants.thecomplaintsmadeagainst thecompanieswarrantedexamination.becausethealliance smissionistoprotectratepayers,we launchedaninvestigationtodiscernthevalidityoftheclaims,inanefforttoensurethatratepayers werenotbeingharmed. ThecomplainantsinformedtheAlliancethattherewereproblemswiththecontracts;namelythatthere wereballoonpayments,nobuyerremorsesections,andthatthecontractsrequiredthecustomerto placealienontheirhomeforthepanels.weweretoldthatlow incomecustomerswerebeingtargeted, solarpowerproductionwasbeingoverstatedsothatcustomersthoughttheywouldnolongergeta utilitybill,andthatcustomersweretoldthattheutilitymaybepayingthemeachmonth.additionally, EntergyNewOrleans( ENO )reportedtothealliancethattherewerecustomerswithsolarpanelson theirhomesbutnonet meterandnoapplicationforanet meter,therefore,enohadnowaytocredit thecustomerwiththeenergyproducedfromthesolarpanels. TheAlliancemadeeveryefforttoengagepeoplewithfirst handexperienceofthesetwocompaniesand inquireaboutthecomplaints.wewereabletospeakwith13customerswhohadengagedoneofthe leasingcompanies,aswellas5solarinstallers,and5entergyemployees.fortheinterviewswith customers,wedevelopedaquestionnairewithelevenquestions.inaddition,wemetwithbothofthe leasingcompaniesinquestionaswellasanotherleasingcompanythathadreceivedzerocomplaints. Finally,weengagedanationalexperttoreviewthereportfortechnicalaccuracy. Fromouranalysisofthesurveyresults,wefoundthatsomecustomersdidnotgetacopyoftheir contract,thebuyerremorsesectionisabsentfromcontracts,andtherewasacustomerwithsolar panelsbutnonet meter.withafewoftheclaims,wediscoveredthattherewasmoretothestory.for example,greengrantsstatedthattheirprogramcouldsave$70 100permonth,however,thissavings includesfreeweatherization,whichtheyprovide.whilesaderpower scontractdoeshavealargebuyoutamountafter6sixyears,thispaymentisanoption,notarequirement. Basedonthefindingsofthisreport,theAllianceputsforthanumberofrecommendationsthatwill servetoprotectconsumers,theutilitycompanies,andthesolarindustry. 3

4 Introduction Solarpowergenerationisverypopularandforgoodreason.Afamilyorbusinesscandramaticallylower theirmonthlyenergybillbybecominghisorherownpowerproducer.louisianamakesiteasyby offeringa50%taxcreditforresidentialrenewableenergysystemsandthefederalgovernmentoffersa 30%taxcredit.Thesecreditscanbeusedtogethertohelppeopledecreasetheoverallcostofasolar system,whichcaneasilyrun$25 35,000.With80%intaxcredits,thatbringsthepricedownto$ However,eventhissubstantialreductionleavesmanypeopleoutofthesolaroption.Fivetoseven thousanddollarsisalotofmoneyoutofpocketinadditiontofloating$25 35,000untiltaxrefunds comein.thatiswhysolarleasingisanexcellentoption.forlittletonomoneydown,ahomeownercan getintothesolarmarketandstartusingcleanenergy. TheAllianceforAffordableEnergyisastrongsupporterofsolarleasingwhenitisdoneeffectively. However,wereceivednumerouscomplaintsfromratepayers,solarinstallers,andlocalutilitycompanies abouttwosolarleasingcompanies,saderpowerandgreengrants.thecomplaintsmadeagainstthe companieswarrantedinvestigation,andbecausethealliance smissionistoprotectratepayers,we immediatelywantedtodiscernthevalidityoftheclaims,inanefforttoensurethatratepayerswerenot beingharmed. RegardingSaderPower,theAlliancewastoldcustomerswerenotgettingcopiesofthecontractsthey signed,low incomecustomerswerebeingtargeted,solarpowerproductionwasbeingoverstatedso thatcustomersthoughttheywouldnolongergetanenergybill,andpeoplewerecallingtheutility askingforrefundchecksforthesolarenergytheyproduced.inaddition,weweretoldthatsader Power scontractrequiresaballoonpaymentafterafewyears,theircontractshavenobuyerremorse section,customershavetocoverthepanelsontheirhomeowner sinsurance,andthecontractsrequire alienoncustomers homes.theutilitytoldustherewerecustomerswithgrid connectedsolarpanels butnonet meterandnoapplicationforanet meter.finally,ageneralfearthatwasexpressedtothe AlliancewasthatSaderPowermaybetakingadvantageofthetaxcreditsandcouldbeplanningtosell offtheirmaintenanceagreementstoathirdpartycollectioncompanyinthenextfewyears. RegardingGreenGrants,weweretoldthatlow incomecustomerswerebeingtargetedandthe companywasoverstatingtheproductionofthesolarpanels. Methodology TheAlliancemadeeveryefforttoengagepeoplewithfirst handexperienceinteractingwiththesetwo companiesandinquireaboutthecomplaints.wewereabletointerview13customerswhohad engagedoneoftheleasingcompanies,5solarinstallers,and5entergyemployees. TheAlliancedevelopedaquestionnairedesignedtodeterminetheveracityofthecomplaintsthatwere madetothealliance.(thesolarleasingquestionnaireisincludedinappendixa.)next,wecreatedan interviewlistoutofthecustomerswhohaddirectlycontactedusaswellasthosereferredtousasa resultofrequestsmadetoentergy,peopleinthesolarindustry,greengrants,saderpower,andin publicforums.entergywasunabletogivecustomernamestothealliance,citingprivacyprotection rules.greengrantscompliedwiththealliance srequestfor5customernames.mr.saderagreedto givethealliance5customernamesbutatthetimeofwritingthisreport,hasnotproducedthem. 4

5 TheAlliancemetin personwithjohnwhite,legalcounselforsaderpoweronapril16,2012andwith JohnSaderandJohnWhiteonMay1,2012.WemetwithGreenGrantsownersTedNeyhartandAaron DirksandtheirattorneysMargotWantandBenjaminNorwoodonApril30,2012.TheAlliancespoke withentergyneworleansandenergylouisianastaffaboutsolarleasingandcustomercomplaintson multipleoccasions.inaddition,thealliancemetwithotherpeopleinthelocalsolarindustry,including SolarUniverse,anothersolarleasingcompany.GreenGrants,SaderPower,andSolarUniversegavethe Allianceacopyoftheircontractforourreview. Oncetheanalysiswascompleteandadraftofthereportwaswritten,theAlliancesentthereporttothe NationalRenewableEnergyLabsforreview.Inaddition,theAlliancehostedasolarroundtablewithlocal solarindustryprofessionalstoreviewthefollowingsectionsofthereport:discussionoftechnicalissues, ConclusionsandRecommendations,andSampleChecklistforSolarLeasingCustomers. ResultsforSaderPower Complaint:Customersarenotbeingprovidedwithacopyoftheircontract. Noneofthepeoplewespoketohadreceivedacopyofthesignedcontractfromthesalespersonatthe timeofsigning.twocustomerswespoketodidhaveacopyoftheircontract.onecustomerhadafax machineinherhomeandmadeacopyforherself.anothercustomerreceivedhiscontractafterasking forit3times.hispanelswereonhisroofbeforehegotacopyofhiscontract. Complaint:Thecontractdoesnotcontaina72 hourbuyer sremorsesection. Thisistrue.Louisianalawrequiresa72 hourbuyerremorseclauseforhomesolicitationsales.ahome solicitationsaleisoneinwhichtheseller engagesinapersonalsolicitationofthesaleataplaceother thanthebusinessestablishmentofthesellerandtheconsumer sagreementoroffertopurchaseis theregiventotheseller[.] La.R.S.9:3516.The buyer sremorse provisionmustincludethefollowing: 1.Thestatementmustappearundertheconspicuouscaption: CONSUMER'SRIGHTTO CANCEL,and (2)Statethefollowing: Ifthisagreementwassolicitedatyourresidenceandyoudonotwant thegoodsorservices,youmaycancelthisagreementbymailinganoticetotheseller.the noticemustsaythatyoudonotwantthegoodsorservicesandmustb edbeforemidnight ofthethirdbusinessdayafteryousignthisagreement.thenoticemustb edto:(insert nameandmailingaddressofseller).ifyoucancel,thesellermustreturnallofyourcashdown payment..la.r.s.9:3539. ItistheAlliance sunderstandingthatsaderpowerdoes,infact,engageinsuch homesolicitation sales. Thatbeingthecase,Sader scontractsshouldincludethe72 hourbuyer sremorsesection. Complaint:Thepowerproductionandresultingsavingsarebeingoverstated. Thisclaimwasdifficulttosubstantiate.Onlyonecustomerwespoketohadsolarpanelsonhisroofand therewasnonet meter.hence,therewasnowaytoproveifpanelsweresavinghimmoney,costing himmoney,ordoingnothing.still,hehadnotyetreceivedabillfromsaderpower. Ourinvestigationintothiscomplaintledtoanotherfinding;customersdonotseemtounderstandhow muchenergytheirsystemwillproduce.onecustomerstated, they[saderpowersalesrep]saidit dependsonhowmuchenergyyouuseandothervariables. Anotherreportedthathewastoldthe 5

6 panelswouldproduce enoughtooffsetthecostandgetacreditfromentergytousewheniwasn t producingsomuch. Athirdcustomerwastoldthathispanelswouldgivehima50%savingsbuthedid notknowthekilowattsofthesystem. Complaint:Customersarerequiredtoputthepanelsontheirhomeowner sinsurance. Thisistrue.Thecustomerisclearlyresponsiblefortheconditionofthepanel,fromthecontractsection 10: CUSTOMERshallberesponsibleforallcasualtiestotheEQUIPMENT S,exceptforthatactuallycaused byownerorowner Sauthorizedagent.CUSTOMERagreestoaddOWNERtoanyHomeowner s InsurancepolicyonPROPERTYasalosspayeeintheeventofcoveredcasualty.CUSTOMERis responsibleforobtainingandmaintainingallinsurancecoverageoftheequipment. Althoughthecontractstatesthatthecustomerisliableforthepanelsandisrequiredtoputthesolar panelsontheirhomeowner sinsurance,only2peoplethatthealliancespoketoknewthatandonlyone hadactuallydoneit.oneofthosetworeported Statefarmismyhomeinsurance;theycharge$ toaddthepanels. Giventhatsofewcustomersinoursamplegroupunderstoodthisclause,itseems likelytousthatothercustomersdonotunderstandthisrequirementandfuturestormdamagetothe panelswillhavetobepaidoutofpocketbythosecustomers. Complaint:Solarpanelsareconnectedtothegridbutdonothaveanet meter. Wefoundonecustomerwiththisproblemandthisisaseriousconcern.Forcustomerswithanalog meters,itappearsthatthemeterdoesrunbackward.thenewerdigitalmeteronlymeasurestheenergy thathaspassedthroughit,notwhichdirectionitisgoing."hence,customersinsteadrunthepossibility ofbeingchargedforenergythattheirpanelsareproducing."inthiscase,thesolarpanelswouldraise thecustomer sbill.safetyofentergypersonnelisalsoofgreatconcern.ifworkersareoutforline maintenanceanddonotknowthatthereisasolarpanelnearby,wefearthataworkercouldbe electrocuted.theutilitycompanymustbeinformedifasolarpanelisconnectedtothegrid. Complaint:Thereisaballoonpaymentafter6years. Thisisnottrue.ForSadercustomers,thereisanopt outbuy outprovisionthatisvoluntary.after6 years,thecustomercanpaysader$10,192.97topurchasethesystem.becausethecustomerpaid$45 to$50permonthforsixyears($ ),thetotalpaymentforthesystemwouldbe13, , Thelawiswrittenthatasolarleasemusthaveapaymentattheendofthecontractperiod offairmarketvalue;otherwisethecompanycouldforfeitthetaxcredit.thequestioniswhetherthe pay offamountisinfactfairmarketvalue.thetechnologyisstillevolvinganditisquestionablethatthe panelsbeingusedtodaywillbeworthover$10,000aftersixyears. Complaint:Homeownersaregivingthecompanyalienontheirhome. Thisisnottrue.Section13ofSader scontractrequiresa CovenantofRightofUse.Thehomeowneris notgivingupanyownershiprightstotheirhome.thissectionisgivingthesolarmaintenancecompany permissiontoaccessthepanels.inourresearchwedidlearnthatthecontractliststherecorderof Mortgagesastheofficetofilethecontract.Thisisincorrect.Thecorrectofficeforsubmittingthese documentsistheconveyanceoffice.althoughthecontractrequiresthecustomertoexecutethe document,thecontractdoesnotspecifywhoseresponsibilityitistofile(alsoknownas recording )the contractwiththemortgage(orconveyance)office.the CovenantofRightofUse isbindingbetween 6

7 theoriginalcustomerandsaderwithoutbeingrecorded.recordingthecontracthasthelegaleffectof bindingsubsequentownersofthepropertytothecontract.inthatregard,itappearstobeinsader s interesttorecordthecontractwiththeappropriateorleansparishoffice. TheprocessforfilingdocumentsistofirstsubmitthedocumentstotheNotarialArchivesOfficetogeta barcodeandnumber.fora7 pagecontract,lettersizetherewouldbea$20fee.oncethecustomer hasthebarcode,thenthedocumentistakentotheconveyanceoffice.thechargeforfiling7pageswill cost$120($30firstpageand$15eachadditionalpage).thetotalchargeforfilingthe Covenantof RightofUse wouldbe$140. Complaint:Low incomecustomersarebeingtargeted. Thisisnottrue.SaderPowerisworkinginneighborhoodsofallincomelevels.Theiradvertisingdoesnot seemtobetargetinganyspecificgroup. Complaint:Saderwillinstallallthesesystemsandthenselloffthecontractstoathirdparty. TheAlliancecannotsubstantiatethiscomplaint.Section17ofthecontractstates OWNERshallhave therighttoassignthisagreementtoanyotherperson,firm,corporationorentitywithoutnoticeto CUSTOMERandshallhavethefurtherrighttosubcontractanymonitoringandmaintenanceserviceor otherserviceswhichitmayperform. GivenMr.Sader spastcommitmenttothecityofneworleans, hishistorywiththemakeitrightfoundation,andhisstatedgoalsforofferingaffordablesolarenergyto customers,itisourhopethatsaderpowerisactingingoodfaith. Otherfindings: Customersmaynotbereadingthecontractbeforesigningit.Fromonecustomer, Thesigningofthe contractwentveryfastandididn thavetimetoreadthecontractbeforehand.wetalkedaboutwhere thesolarpanelswouldgo,butnotontheeastside/noshadesomethingabout80degrees,maybeslant ofroof.salesrepnothelpfulwithdetails. Anothercustomersaidhe didn tgetachancetoreadit [contract].thesalesrepkeptinterruptingmewhenitriedtoreadit. Customersarenotseekinglegaladvicebeforesigningthecontract.Noneofthepeoplewespoketohad consultedanattorneyaboutthecontract. Thecontractcouldbecleareraboutwhathappenswhenahomeownersellstheirproperty.The contractseemstoprovideforatermofsixyearsonthelocationspecified.however,itisnotclearas whetherasubsequenthomeownercanuptheleaseorwhethertheprovisionsareirrevocableforthe originalcustomer.saderpowerinformedthealliancethatacustomerwouldbeallowedtoremovethe panelsandre installthemonthenewhomeaslongasthehomeisinlouisiana.however,thisoptionis notclearlyprovidedforinsader scontract. ResultsforGreenGrants Complaint:Thepowerproductionandresultingsavingsarebeingoverstated. Thewebsiteclaimsthatcustomerscansave$70 100permonth.Theownersexplainedthatthesavings includeweatherizinghomesinadditiontoinstallingsolarpanels.thecompanycontractedwithcore USAtodotheweatherizing.Theenergyefficiencyprojectsarefreewiththesolarlease. 7

8 Complaint:Low incomecustomersarebeingtargeted. Thisistrue.TheGreenGrantsmodelistooffersolarand weatherizationtopeoplewhoneedit.offering thisservicetolowincomepeopleiscentraltotheirbusinessmodel. DiscussionofTechnicalIssues Mr.JohnSaderofSaderPowerraisedsometechnicalissuesthatwerebeyondthescopeofthis investigation.however,sincetheseissuescameupduringtheinvestigation,wewilladdressthemhere. Solar Calculators TheNationalRenewableEnergyLabs(NREL)hostsasolarcalculatorontheirwebsitecalledPVWatts. ThecalculatorallowsanyoneintheUnitedStatestocheckhowmuchenergytheycouldproduceby puttingsolarpanelsontheroof.thecalculatorasksforseveralpiecesofinformation:address,array size(howmanykw),orientationtothesun(tilt&azimuth),aderatefactor(theamountofpowerlost whentheaccurrentfromthepanelisconvertedtodcpoweronthegrid),andcostperkwh.pvwatts assumesnoshading(althoughitcanbeincorporatedintothederatefactor). InresponsetotheaccusationthatSaderPowerisoverpromisingpowerproduction,Mr.Saderasserted inameetingandinwritingthatthepvwattscalculatoristooconservativeinestimatingpower productionandsavings.mr.saderclaimscorrectlythatthemicroinvertershiscompanyusesincrease thederatefactorsubstantially.saderpowerusesenphasem215micro Invertersandaccordingto Enphase,thederatefactorincreasesfrom.769to UsingtheNewOrleansSolarMapwhich utilizespvwatts,theallianceanalyzedhowthederatefactorcouldalterthesavingsandpower productionoutputs.theneworleanssolarmapwillonlyacceptvaluesupto2decimalplaces,hencewe used.77forthedefaultscenarioand.84forthealternativescenario,assumingagenerousderatefactor. Forcostperkilowatt hour,thedefaultis$0.10.theallianceaddedthefuel&purchasedpowercost ($ perkWh)andtheFederalMandatedEACRider($ perkWh)tothebaserateof $.0806perkWhforthealternative.Grossmonthlyandgrossannualsavingsisthetotalsavingsoffthe energybill.netmonthlyandnetannualsavingsisthetotalamountsavedofftheenergybillminus $45/monthfee. TableI:SolarPowerSavingsComparisonUsingPVWatts DefaultScenario AlternativeScenario Deratefactor CostperkWh Southfacing GrossMonthlySavingsRangein$/kWh $36.82to$53.19/ kWh $45.92to$66.35/ kWh GrossAnnualSavingsin$/kWh $529.34/5,293kWh $660.22/5,791kWh NetMonthlySavings $ 8.18to$8.19 $.92to$21.35 NetAnnualSavings $ $ * All figures based on New Orleans. **Costs do not include insurance or filing fees. ***Costs estimated for15 year contract. 1 EnphaseEnergyTechnicalBrief.(2011)PV Watts Calculation Values with an Enphase Microinverters System.Accessedat: uploads/enphase.com/2011/08/enphase Technical Brief PVWatts Calculations.pdf. 8

9 Inthedefaultscenario,ahomeownerpaysanextra$10.66peryearforcleanenergy.Inthealternative scenario,homeownerspay$45/monthfor15yearsandsaveapproximately$1800duringthattime frameandthengetanother10 15yearsofsavingswithoutamonthlypayment. Non South Facing Panels Thesavingslistedabovedropdramaticallyforpanelsthatfaceadifferentorientation.Usingthesame inputsasabove,thealliancechangedtheorientationofthepanelstolookateastandwest facing panels.theneworleanssolarcalculatordoesnotofferanorth facingorientationoption.itisindustry bestpracticetoavoidnorthernexposuresbecausethisisthelowestexposuretosunlight. TableII:East FacingPanels DefaultValues AllianceInputs GrossMonthlySavingsRangein$/kWh $21.98to$52.02/ kWh $27.53to$64.80/ kWh GrossAnnualSavingsin$/kWh $445.95/4,459kWh $556.74/4,884kWh NetMonthlySavings $ 23.02to$7.02 $ 17.47to$19.80 NetAnnualSavings $ $16.74 TableIII:West FacingPanels DefaultValues AllianceInputs GrossMonthlySavingsRangein$/kWh $23.98to$52.41/ kWh $30.04to$65.32/ kWh GrossAnnualSavingsin$/kWh $438.23/4,382kWh $547.49/4,803kWh NetMonthlySavings $ 21.02to$7.41 $ 14.96to$20.32 NetAnnualSavings $ $7.49 SaderPower swebsiteclaims: Louisianahomeownerscansavehundredsforonly$45/month.From theinformationintheprevioustables,thealliancebelievesthatcustomerswithunobstructedsouthfacingroofscouldsavehundredsofdollarsoverthecontractperiod,assumingthehomeowner s insuranceislow.thatsaiditisclearthatcustomerswithsystemsthatareeastorwestfacingwilllikely notsaveasubstantialamountofmoneyoverthecontractperiod. On North Facing Panels Mr.Saderexplainedwhyhiscompanywasallowingnorth facinginstallationseventhoughpanelswith northernorientationproduceabout50%lessenergy.tomakeupfortheloss,mr.sadersaidthatthey wouldsimplydoublethenumberofpanelsontheroof.thepanelsarenotthebiggestexpense,he explained.saderpower s4.1kwsystemrequiresabout18panels.onanorth facingroof,itishardto comprehendhow36panelswouldfitbutthatseemstobemoreofabusinessdecisionthanacustomer serviceissue.nevertheless,thealliancequestionswhetherataxcreditfornorth facingpanelsisthe highestandbestuseoftaxpayermoney.wesupportsolarenergybutcannotignoretheinefficiencyof orientingahighqualitypanelinawaythatcuts50%ofitsproduction. 9

10 Tax Credits and the Cost per Kilowatt Hour Mr.SaderhasstatedthattheUSDepartmentofTreasuryputsa$7.00/wattmaximumcostbasison residentialsolarsystems.accordingtothetreasury sguidancedocumentoncostbasis,thereisa recommendedbenchmarkofplusorminussevendollarsperwatt(+/ $7.00/watt)forresidentialPV.If theclaimedbasisonagrantapplicationis materiallyhigher thanthestatedresidentialbenchmarkof +/ $7.00/watt,thentheapplicationwillbereviewedtodetermineifonlyeligiblecostswereincluded,if thepartiesarefamilyorbusinessrelated,and otherunusualcircumstances. 2 Theplusorminussign beforethe$7.00,indicatesthatthecostbasisisarecommendationnotarequirement. Maintenance Agreements Afewsolarleasingcompaniesusetheterm maintenanceagreement insteadof Lease todefinethe fiscalrelationshipbetweenthecompanyandcustomer.thisisduetothewaythesolartaxcreditlaws arewritten.theterm maintenanceagreement sendsamessagethatsolarsystemsrequire maintenance. Solarsystemmaintenanceisamatterofsomedebatelocally.TheAlliance sresearchhasrevealedthat solarpanelsinourregiondonotrequireagreatdealofcleaning.thepanel srecommendedanglefor ourlatitudecombinedwithourannualaveragerainfalltendstokeepsolarpanelsclearofdebris. However,ifthesolarsystemhardwarefailsforsomereason,havingamaintenanceagreementmaybe verybeneficial. Forleasingcompanies,theAlliancerecognizesthattheterm maintenanceagreement couldconfuse customers.thealliancebelievesthatthetaxcreditshouldincludeaspecificleasingprovision.forsolar systemsellers,thealliancebelievesthatthequestionofmaintenanceagreementisanissuetobe workedoutbetweenthesolarcompanyandtheconsumer. ConclusionsandRecommendations Withafewadjustments,theAlliancebelievesthatSaderPowercouldaddanetbenefittoLouisiana s solarmarket.saderpowerisofferingcleanenergyatanaffordablemonthlyrateandwiththecorrect solarpanelorientation,willlikelyhelpratepayerssavesomemoney.greengrantswasapleasant surprisetothealliance.themodeltopairenergyefficiencywithsolarpanelsisthebestwaytolower energybills.wewouldliketoseegreengrantsreportthenumberofweatherizationscompletedtothe NewOrleansCityCounciltobeincludedintheCouncil senergyefficiencyefforts. Guaranteesareimportant.WhenacustomerleasesaTV,theyexpect,andrightlyso,thattheTVwill turnoneverysingletime.whenapersonleasesacar,therentalagencyensuresthatthecarruns predictablyortheleasingcompanyreplacesthecarwithanotherthatdoesfunction.saderpowerand GreenGrantsarenotcurrentlyofferingthesameguaranteeintheircontracts.SolarUniverse,another leasingcompanyintown,doesofferthistypeofguarantee.thealliancebelievesthatthistypeof guaranteeshouldbeindustrypractice.ifthecompanyisconfidentintheproduct,thenitshouldnotbe aproblemtoguaranteeannualpowerproductionofthesystem.further,pvwattscouldbeusedto guaranteeproduction.ifpvwattsisinfactoverlyconservative,assomehavesuggested,then guaranteeingproductionbasedonpvwattsshouldnotbeaproblem. 2 DepartmentofTreasury.(EvaluatingCostBasisforSolarPhotovoltaicProperties.Accessedat: 10

11 SolarUniverse,anotherlocalsolarleasingcompany,includesinsurancecoverageofthepanelswiththe lease.inthemeetingwithsolaruniverse,theownerstatedthatsincethecompanyownsthepanel, thenitjustmakessensetoinsureit.theallianceagrees.theownerofthepanelsshouldholdthe insurancepolicy.insuranceratesforhomeownerscoulderodethesavingsderivedfromusingsolar. ThebusinessmodelforSaderPowerandGreenGrantsutilizessalesstaffinsteadofsolarinstallerstosell leasingagreementswithcustomers.inourexperience,salespeoplearelessknowledgeableaboutthe functioningofsolarsystems,properpanelalignments,kilowatt hours,andotherverytechnicalissues regardingsolar.therefore,trainingsalespeopletobeknowledgeableaboutpolicyandtechnicalissues isofgreatimportance. Itisnotclearfromthecontractswhatshouldoccurwhenahomeownersellstheirhomeduringthe leasingperiod.theallianceisconcernedthatthelargebuy outoptionmaybeenforcedatthetimeof saleofthehome. Basedonourfindings,wewouldliketorecommendthefollowingchangesforsolarleasingand maintenancecontracting. 1.CustomersMUSTgetacopyofthesignedcontractatthetimeofsigning. 2.AllcontractssignedoutsideofaformalofficeMUSTcontainthe72 hourbuyerremorsesection. 3.SalesrepsMUSTallowthecustomertoreadthecontractbeforethecontractissigned.Wewould preferthatthecustomerberequiredtoinitialeachpage. 4.CustomersSHOULDbeshowntheshadeanalysisandeducatedontheimportanceofkeepingthe panelsfreefromoverheadobstructions. 5.AminimumpowerproductionamountSHOULDbeguaranteed.Ifthepanelsarenotperforming accordingtoannualprojections,thentheleasingcompanyisresponsibletothecustomertofixthe problemandreimbursethecustomer. 6.SolarpanelsMUSTNOTbehookeduptothegridbeforethenet meterisconnected. 7.SolarinstallersundercontractwithaleasingcompanyMUSTensurethatthenet meterapplication hasbeensubmittedandacceptedbeforeinstallingthesystem. 8.TheownerofthepanelsSHOULDholdtheinsurancepolicy.Ifthisisnotoffered,thentheownerof thepanelsmustmakesurethatthehomeowneraddsthepanelstotheirinsurancepolicy. 9.Ifthecontractoffersaterminationoption,thenaclearprocessfordeterminingfairmarketvalue MUSTbeoutlined.TheAlliancewouldpreferthatthelargeopt outpaymentsberemovedfromthe contractsandreplacedwithafairprocessfordeterminingwhatthesystemisworthatthetimeofthe contract stermination. 10.ThecontractSHOULDincludeacleardescriptionofthedifferentoptionsavailableforwhenthe homeissold.theprocessfortransferringthecontracttothenewownersshouldbeunambiguous. 11.TheleasingcompanySHOULDfilethenecessarypaperworkwiththeCity,notthecustomer.Ifthe customerisrequiredtofilethedocuments,thenthecustomermustbeinformedabouttheextra charge. 11

12 AppendixA InvestigationQuestionnaire 1.NameoftheSolarCompanyused? 2.Didyousignacontract?Ifyes,when? a.didthecontractcontainabuyerremorsesection? 3.Didyougetacopyofthecontract?Ifyes,when? 4.Wereyourequiredtoputthesolarpanelsonyourhomeownersinsurance? a.ifyouwererequired,howmuchdidthatcostyou? 5.Didyougetanylegaladviceonyourcontract? 6.Didyougivethecompanyalienonyourhome? 7.Didyouseetheshadowanalysisofthepotentialsolaronyourroof? 8.Whatwereyoutoldaboutthesolarpanels? a:howmuchenergywilltheyproduce? b.wereyoutoldthatyouwouldgetacheckfromyourutilitycompany? Tellmeyourstory(narrative)oranyrelevantinformationyouwanttoaddtothisreport. 12

13 SampleChecklistforSolarLeasingCustomers Ihavereadthecontract! AppendixB AmIrequiredtoincludethepanelsonmyhomeowner sinsurance?howmuchwillthiscost? AmIgivingacovenantonmyhomeforthepanels?(Thismeansthatthesolarcompanyhas permissiontocomeontomypropertytoperformmaintenanceonthepanels.) DoIhavetofilethecontractwiththecity?Ifyes,why?Howmuchwillthatcost? HowmuchenergywillIsave?Howmanykilowatt hoursofpowerwillthepanelsproduceeach month?year?(thereshouldbeanumber,akwh,andatimeperiod.example,100kwhpermonth.)to calculateyourdollarsavings,multiplythatnumberby$0.10.forexample,100kwh*$0.10=$10. Isthereaguaranteethatthepanelswillproducethepowerstated?Ifnot,whynot? Whathappensifthepanelsdonotproducetheexpectedpoweranddollarsavings? Ihaveseenashadeanalysisshowingthatmyroofissunnyandclearofobstructions. Whichdirectionwillmypanelsface?(Panelsshouldfacesouth.Ifsouthisnotanoption,thentry east facing.ifeastisnotanoption,thenwest facing.panelsshouldnotbenorthfacing.) Whatisthetimelinefortheproject?(Thisistohelpmanageyourexpectationsforhowlongthe applicationprocesscantake.) Ireceivedacopyofthecontractatthetimeofsigning! IunderstandthatIhave72hoursaftersigningthecontracttocancelitforanyreason. 13