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Enjoy the sunshine – but prepare for rain

Elon Musk passed on the New Mexico location for Tesla’s gigafactory; now, through his company SolarCity, he’s coming back to fleece us.

The Journal announced: “SolarCity … will open its first center of operation in Albuquerque by the end of March.” The article touts that homeowners can “install photovoltaic systems with no upfront costs.” Considering that most systems costs tens of thousands of dollars, this sounds like a great option – almost too good to be true. It is.

New Mexico residents need to be diligent in researching SolarCity and read the contract very carefully before signing on the dotted line. The program being introduced is new, launched “last fall,” so there is not a lot of history on the specific 30-year loan program being offered, but much can be learned from consumer experiences with SolarCity in other states where it operates.

The Albuquerque-based Citizens’ Alliance for Responsible Energy has just released a white paper called “Solar Power in the U.S.,” which offers a comprehensive look at the impacts of solar power on the nation’s consumers. It reports: “Many third-party solar companies, in particular SolarCity, SunRun, and Sungevity, exploit the benefits of the federal Solar Investment Tax Credit by over-reporting prices.”

It is the tax credits that make SolarCity appear so generous to its potential customers. The white paper states: “The third party collects all state and federal tax credits for the system, as well as any available rebates” – which the buyer won’t receive.

It also addresses growing complaints against solar companies such as SolarCity: “In January 2014, the New York Times reported that for Solar City, ‘Complaints to the Better Business Bureau of misleading marketing and flawed installations, along with negative reviews on social media forums like Yelp appear to be rising.'”

“Solar Power in the U.S.” alerts consumers to unexpected maintenance, tax and insurance costs. “In the SolarCity 20-year lease, it clearly states that the lessee will be responsible for keeping ‘trees, bushes and hedges trimmed so that the System receives as much sunlight as it did when SolarCity installed it.'” While not specifically stated, the same would be true for snow. If the roof needs repair, the homeowner must pay a fee to have the system removed, stored and replaced. Depending on local laws, “customers may find that a rooftop solar system increases their property taxes.”

Before installing any solar system, beware that it can impact your homeowner’s insurance policy, as some companies may view solar panels as an increased risk for liability and property damage.

The new SolarCity program, according to the Journal, allows homeowners to “finance their systems with fixed 30-year loans” – yet photovoltaics last, on average, 20 years. The article claims that, if the system doesn’t generate the estimated quantity of power, the payment is reduced accordingly, but what happens to the loan amount? It likely remains static, which would result in more than 30 years of payments. Homeowners could be left paying for a system long after its usefulness.

Protection against rising energy costs is essential to making the investment in solar sound attractive, yet, as Public Regulations Commissioner Pat Lyons told me: “PNM’s recent rate hikes have been due to the mandated implementation of higher-cost renewable energy. Adding more solar to the system threatens reliability, creates integration issues and increases costs for everybody.”

Before buying something that sounds too good to be true, such as a SolarCity system with “no upfront costs,” consumers need to have a full understanding of the benefits and challenges solar power poses today – which is exactly why CARE researched the issues and produced “Solar Power in the U.S.”

Marita Noon is the executive director for the 501(c)4 group Energy Makes America Great Inc. and the companion 501(c)3 educational organization, the Citizens’ Alliance for Responsible Energy.

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