Consumer Protection v. Solar Industry Protection: Do We Have To Choose? Posted on Feb 07, 2017
Consumer protection is a hot issue in the solar industry right now. Given the nature of the solar industry, some of the reasons consumer protection is a big issue are valid, and some are not. Many companies in the solar industry are small companies that might unintentionally be breaking the law in their sales and marketing activities. That factor is shared with other industries’ growth cycles except the solar industry’s competitors are working harder than others to slant and capitalize on consumer protection concerns. Currently, fossil fuel companies and utility monopolies are making a multi-faceted, concerted effort to cripple the solar industry through legislation and other efforts that pretend to be pro-solar and pro-consumer, but in fact hurt the industry.
Anti-solar bills introduced in Arizona, Nevada and New Mexico have all been based on some variation of this allegedly pro-consumer approach. For example, a bill recently introduced in New Mexico alleges it is to ensure consumer protection in the solar industry and require greater transparency in solar contracts with homeowners while it contains regulations more stringent than those governing the purchase of other home improvements or large consumer items. Across the nation, commentators, attorneys and anti-solar groups are gathering to provide stories and accusations that seemingly paint the solar industry as a predatory group of companies victimizing homeowners and other solar customers with false claims of energy and cost savings, poor products and tactics of invading personal privacy.
The claims being proliferated against solar companies based on allegations of false or misleading marketing practices include that contract clauses in solar agreements pose significant financial risks for families. Others allege that the savings from the solar power were falsely represented or that contractors lured customers with low price quotes that were inaccurate. Some have claimed that customers were required to sign confusing and inaccurate contracts and that contractors performed bad installation work. Still others allege that customers were unable to reach company representatives despite repeated efforts or the promised tax credits and energy rebates were never received.
If true, these practices would warrant the strong focus on consumer protection being placed on the solar industry. But, many of these claims are false and most are not widespread unlike the fossil fuel companies and utility monopolies are attempting to portray. Contractors must be vigilant to protect themselves from the current efforts being made to damage the solar industry through anti-solar legislation, press and legal claims about consumer protection concerns. Given the scale of the effort to defeat solar and the lack of deep pockets of many solar companies to defend against consumer protection claims, solar companies need to be proactive to stop claims of false or misleading sales and marketing activities.
For a company to be vigilant about preventing and defending false or misleading sales and marketing claims they should create a paper trail that shows they have been doing the right thing and train their employees and contractors to follow the law. Each company’s action plan should include these steps:
- Know the applicable rules that apply to telemarketing, lead generation and construction/contracting activities in your jurisdiction.
- Develop a sales and marketing policy - that includes the applicable rules - to use as both a guide to prevent and as a defense to defend against consumer complaints.
- Train all employees in this sales and marketing policy and keep printed copies in the office in a place easily accessible to all employees.
- Use Independent Contractor Services Agreements, Referral Agreements and Project Origination (lead generation) Agreements, as the needs arise, to protect from any failure of independent contractors and other third-parties to follow the law.
- Use clearly written Residential and Commercial Solar Purchase Agreements.
- Provide customers with standardized disclosure forms that summarize the main agreement details to provide your customers with a better understanding of the transactions.
Any effort to develop consumer protection measures for the solar industry should be pursued equally along with efforts to protect solar companies from consumer protection claims. Now is the time to set up the solar industry to withstand scrutiny and attacks from anti-solar interests.