Watch out for those Bad Apples (and Cabbages)

Perhaps it’s a testament to the potential strength of the solar market that, like any industry that shows signs of growth and consumer take-up, it’s beginning to attract some less desirable elements.

That’s an opening that definitely needs to be explained. Let’s use the example of the great cabbage patch kid hoax at the height of consumer hysteria over that obnoxious toy: in a media announcement, would-be doll purchasers were instructed to present themselves at a certain public venue at a pre-arranged time and, when a special aircraft flew overhead, to hold up their credit cards for airborne inspection. The purchases would be duly recorded, and dolls would be promptly shipped to the desperate (and decidedly gullible) parents.

What’s the connection, I hope you’re asking, to the output of the solar industry? Simply that both are examples of products experiencing a huge surge of interest concentrated into a short period of time. In the case of the doleful-faced dolls, this may have been caused by parental fear of an unsatisfied child at Christmas; with solar installations, it’s been occasioned by the abrupt escalation in energy prices, the possible discontinuation of federal clean energy tax credits at year’s end, and—in certain states—more enlightened rebate/assistance policies for homeowners investing in solar power. The point of the illustration is to show how a sudden spike of demand over supply can lead to consumers being less diligent than they should be when evaluating suppliers. And that’s when the ‘less desirable elements’—the hoaxers and/or scam artists—can enter the picture.

Sue Kateley of the California chapter of the Solar Energy Industries Association, in an article in RenewableEnergyWorld.com, warns that several customers in her state have paid deposits—in one case of over $100,000—to salespeople from very new solar companies, without receiving a system. Kateley feels that while industry organizations and state governments can do part of the work of policing the industry, customers on the brink of making a large investment in solar have to perform a modicum of due diligence themselves before putting pen to paper. And Bob Chew of SolarWrights, a fast-growing renewable energy company in the Northeast, recognizes that renewables are in a very vulnerable position—that a few bad customer experiences could have devastating effects on an industry already fighting vested old-energy interests with money and clout in Washington.

Here are some hints from Kateley for not getting burned by solar ‘powers’:

1. Confirm with your state authorities that solar contractors must be licensed to operate. If so, verify with them that the license number of the contractor you’re dealing with is in the same name as the company. Check also, if possible, any disciplinary actions pending against the contractor and whether they have adequate insurance.

2. Make sure the contract you sign details such items as:

1. Description of work, including estimated completion date
2. Overall price and progress payment schedule, including any holdback of final payment
3. Responsibility for obtaining permits
4. Non-performance and cancelation clauses that protect your rights

3. Contractors should not collect exorbitant deposits; the lesser of $1000/10% of final price is the maximum deposit allowable in California.

4. Don’t pay the full amount of the contract before the work is completed.

5. As a matter of good business practice, get more than one estimate for the work based on the same parameters.

6.Independently research the company’s claims to verify that the costs are reasonable and that the benefits have been correctly described.

7.Remember the right of recision. In general, you have three days to reconsider any contract you sign in your home.

Bob Chew’s company covers New York and all of New England except for Maine. He says there’s a wide variation across these six states in the involvement of state government with licensing and regulation. Connecticut, for example, maintains a list of only a couple of dozen approved installers, while the Commonwealth of Massachusetts has a more hands-off approach. Vermont and New York also score high on Chew’s list of states exercising diligence over licensing.

SolarWright’s states do not impose the kind of deposit limit that California does, but Chew does not object to receiving only a modest deposit while working through the approval process for state incentives. He also sees a value in states exercising a double role, to help both solar companies and customers. As well as certifying installers, he feels they could establish rules for payment schedules that would enable small solar companies to keep ahead of cashflow problems; these companies are particularly susceptible to such problems owing to the cost of today’s PV hardware and what can be an insupportable wait for payment under state incentive schemes. The burden of these issues on cashflow can be reflected in an installer’s own pricing.

Nonetheless, until more states step up to the plate to license solar contractors (and even in those that do), the onus is still very much on the consumer to take what are, after all, common sense steps to protect against possible scam artists. We would not want you to end up with a face like a cabbage patch kid.

Sue Kately’s article in RenewableEnergyWorld.com can be read here.