AG takes legal action against solar companies

New Mexico Attorney General Raúl Torrez has filed a lawsuit in First Judicial District Court in Santa Fe against the New Mexico Solar Group for alleged consumer fraud against customers who either fully or partially paid for solar systems that were never installed.

The Attorney General’s Office also opened investigations into two other companies — Meraki Solar Solutions and Titan Solar — for alleged unfair and deceptive business practices, Torrez announced Tuesday.

“This office will aggressively protect consumer interests under my administration and those in the solar industry are on notice that we will not abide by any unethical or deceptive business practices,” Torrez said in a news release announcing his office’s actions. “New Mexico should be at the forefront of adopting solar technology and concerned citizens who are making the decision to switch to solar should not be taken advantage of by these companies.”

NM Solar Group — an Albuquerque-based installation company with satellite offices in Roswell, Alamogordo, Las Cruces and El Paso — abruptly shut down all its business operations Aug. 11, laying off all employees and blindsiding many customers who apparently paid tens of thousands of dollars for solar systems that have never been installed.

The Journal broke the news of NM Solar Group’s abrupt closure and the potential harm to customers on Aug. 15, which apparently alerted the Attorney General and his team into taking action.

“I found out about it when I picked up the paper that day,” Torrez told the Journal Tuesday afternoon. “It definitely flagged for me a company and an issue that I hadn’t been aware of before.”

The Journal had specifically reported about two homeowners in Albuquerque and Corrales who said that NM Solar’s closure left them on the hook for separate deposits totaling $39,000 they made for solar systems that have not been installed, leaving them with no apparent recourse to recuperate their money.

Since then, the Journal has received emails and phone calls from another eight homeowners who say they too made hefty deposits since last year — ranging from a low of $13,000 to a high of $90,000 — for systems that have never been installed, and they now have no information on what to do. All the customers told the Journal that since NM Solar’s closure, they are unable to reach any company representatives.

In fact, one homeowner said he signed an installation contract with NM Solar as recently as July 10, with an $18,190 deposit to cover 50% of the system cost.

“Then to find out (on Aug. 12) that the company is no longer in business was a huge blow to our family’s finances,” he said in an email.

Another customer paid a 50% deposit of nearly $12,000 last October, but said the company had “stonewalled” him for nine months before eventually scheduling the system install for mid-August.

“We were finally scheduled for installation this past Monday, Aug. 14,” the customer said in an Aug. 16 email to the Journal. “However, they did not show up and I could not reach them. When I saw your article I knew why.”

The Attorney General’s lawsuit names seven former officers from NM Solar and its two sister companies — NM Solar Group Financing and NM Solar Group Property Holdings — as defendants in the case. It alleges that, despite knowing the firm was experiencing serious financial difficulties and would likely shut down, company officers encouraged employees to continue taking deposits for systems right up until NM Solar closed its doors.

“Upon information and belief, Defendants understood NM Solar Group Inc.’s precarious financial situation well before it shut down,” reads the lawsuit. “Nonetheless, Defendants continued to contract with and accept thousands of dollars in deposits from numerous New Mexicans for Solar Energy Systems it could not provide. In other words, NM Solar Group offered Solar Energy Systems with intent not to supply them.”

The lawsuit says customers have complained to the Attorney General’s Office and the Better Business Bureau about a variety of unfair and deceptive trade practices by NM Solar, such as “grossly” exaggerating installation timelines with promises of full system operation within 90 days when in fact it often took more than eight months to get systems installed. Those delays forced customers to continue paying their electric utility bills in addition to payments on loans for rooftop systems that weren’t yet operating.

Other customers said systems installed by NM Solar haven’t produced the amount of electricity promised, and when that happens, the company fails to honor contractual commitments to pay for those losses and upgrade the system.

In addition, many customers are still waiting on essential goods and services needed for already installed systems to function properly, but they can no longer expect to receive those things because the company shut down, according to the lawsuit.

The attorney general’s staff is now working to identify customers who were impacted by NM Solar’s shutdown and gather a full accounting of customer payments for systems that were never installed, Torrez told the Journal.

“That will lead to a larger investigation into whether they were signing up customers knowing full well they were in financial difficulties,” he said. “…We want to see what monies have been retained by the company to see if we can recover that for customers.”

Meanwhile, the attorney general has also opened a separate investigation into Meraki Solar Solutions and Titan Solar regarding deceptive marketing practices.

The Journal published a two-part investigative report Aug. 6-7 about many Albuquerque homeowners who say they were pressured through aggressive door-to-door sales campaigns to sign contracts for apparently overpriced, underperforming solar systems that are now costing them more than they previously paid Public Service Co. of New Mexico for electricity.

The Journal interviewed more than half a dozen homeowners who specifically complained about deceptive marketing by Meraki Solar.

Torrez said his office has received numerous complaints about Meraki and Titan.

“We’re particularly concerned that they may have specifically targeted Spanish-speaking consumers who may be less educated about what those companies were selling and about their rights as consumers,” Torrez told the Journal. “We want to investigate complaints about high-pressure sales tactics, whether the companies properly disclosed details about the solar systems they sell, and whether people understood what they were signing up for.”

Torrez also expects to work with the Governor’s Office and the State Legislature on new laws and regulations to crack down on deceptive marketing.

“We’ve seen enough violations in this industry that I’ve asked our team to explore the current regulatory framework to see what we can do to create stronger regulations,” Torrez said. “I want to work with the Legislature and the governor to address that.”

Those efforts will likely be well received by Gov. Michelle Lujan Grisham, who specifically asked Torrez in a letter Thursday to investigate reports of consumer abuse by some solar companies.

“A number of constituents have reached out to my office to report that they have fallen victim to deceptive practices by these companies, which not only undermine consumer trust but also have the potential to adversely impact the adoption of renewable energy sources,” the governor wrote. “Specifically, these constituents report that certain solar companies are engaging in misleading practices that warrant immediate investigation and potential legal action.”