In a trend that shows no signs of abating, a growing group of State Attorneys General are setting their sights and investigation resources on the solar industry. Often relying on their state unfair and deceptive trade practices acts, these State AGs primarily have pursued the sellers and manufacturers of solar panels for false and misleading advertising claims regarding the cost savings associated with solar panel use, as well as for unfair and misleading customer solicitation practices.
The Arizona AG’s office has been particularly active in taking action against the solar industry. Earlier this year, Arizona AG Mark Brnovich settled a lawsuit against Going Green Solar LLC for violations of the Arizona Consumer Fraud Act. The lawsuit alleged that Going Green made deceptive claims during sales pitches and conducted high pressure sales presentations, made thousands of telemarketing calls, including to consumers on the Do Not Call Registry, and sold products that did not result in a reduction of energy bills. Under the terms of the settlement, Going Green was required to pay $120,000 in civil penalties (a portion of which is suspended pending compliance with the injunctive provisions), as well as restitution, attorneys’ fees, and investigative costs.
Last year the Arizona AG’s office settled a lawsuit against Stealth Solar LLC and its owners over similar allegations regarding aggressive telemarketing calls and customer solicitations. AG Brnovich’s predecessor also issued a consumer alert last year warning Arizonans regarding deceptive sales practices and unsubstantiated claims perceived to be prevalent in the industry.
The Arizona AG’s office also has been asked to investigate alleged tactics to harm or discredit the solar industry. In March, the Checks and Balances Project sent a letter to AG Brnovich requesting an investigation into whether the Arizona Public Service Co. (which has recently submitted a proposal to state utility regulators to increase monthly fees on solar customers) is connected with alleged efforts by the Virginia-based Taxpayers Protection Alliance to conduct a door-to-door poll purportedly designed to discredit the residential solar industry in Arizona.
Other AGs also have brought claims against the industry. Massachusetts AG Maura Healey recently announced a settlement with Soltas Energy Corporation over allegations that it violated the Massachusetts Consumer Protection and False Claims acts by failing to honor agreements to sell net metering credits. And last year Louisiana AG Buddy Caldwell investigated Sader Power Enterprises for alleged violations of the Louisiana Unfair Trade Practices Act relating to allegations that Sader misled consumers about the amount of cost savings from the use of solar equipment and the costs of leasing the equipment.
In 2013, the Texas AG Greg Abbott filed a deceptive trade practices lawsuit against a solar panel facility 1 SolTech Inc. and obtained a temporary restraining order relating to allegations that the facility falsely claimed its products were produced in the United States. The owners were alleged to have advertised and sold solar panels as being made at their Texas-based facility, despite the fact that they were manufactured by a Chinese company and imported from China.
There are also instances when an AG’s use of authority benefits the solar industry. For example, last month New Mexico AG Hector Balderas’s office filed a motion to dismiss a request by the Public Service Co. of New Mexico (the largest electric utility in New Mexico) to charge customers with new solar power systems a monthly fee to connect to the grid. Public Service argues that solar customers should pay for their share of the fixed costs of maintaining the electric grid. The AG’s office also requested that state regulators investigate the effects of distributed generation (the use of solar panels or wind turbines to generate electricity connected to the grid) on the utility system.
Given the increasing demand for solar energy by consumers and the corresponding effects on the greater energy industry as a whole, AGs likely will continue to use their authority to remain engaged on the actual and perceived consumer protection issues raised by the solar industry’s practices.