In response to rising energy costs[1] and escalating climate change anxiety,[2] a growing number of Americans are ditching fossil fuels and seeking alternative, clean energy solutions to power their homes.[3] While this is a positive step towards achieving carbon neutrality,[4] there are associated risks, as some see this newfound demand as an opportunity to manipulate vulnerable consumers.[5] As a result, bad actors within the clean energy industry exacerbate the problem of climate change by discouraging homeowners from embracing climate-friendly energy solutions due to fears of predatory lending, property damage, and exploitation.[6]
Fossil fuels—oil, coal, and natural gas—continue to be the primary energy source in the United States despite their status as a non-renewable resource[7] and role as the leading contributor to climate change.[8] Buried deep beneath the earth’s surface and only accessible by mining, fossil fuels are a product of exposing organic material to millions of years of heat and pressure.[9] Their finite nature, high demand, and associated extraction costs have long resulted in volatile price fluctuations[10] that will only be exacerbated by climate change.[11] In contrast, clean energy refers to “energy sources that produce no climate-warming greenhouse gas emissions in their operation.”[12] Not only are these alternatives better for the environment,[13] they are also increasingly seen as cost-effective because they harness renewable resources like the wind and sunlight.[14]
Over the past decade, Americans have increasingly embraced renewable energy[15] despite its high upfront costs.[16] This trend can be attributed in part to federal[17] and state incentives[18] that subsidize the costs of solar panel installation. Though these incentives vary by state, on the federal level, the Inflation Reduction Act grants solar customers an income tax credit equal to thirty percent of the cost of their solar panel installation.[19] These incentives have largely been successful in promoting the usage of solar energy; in 2023 alone,[20] the United States produced approximately 139 gigawatts from utility- and small-scale solar installations.[21] Not only is this enough to power twenty-two million American homes of average size, but it is also twelve times the amount of energy generated in 2013,[22] and that number is only expected to increase moving forward.[23]
This embrace is a tremendous success in the ongoing fight against climate change, but a deep dive into the solar industry reveals widespread aggressive sales tactics, predatory loans,[24] outright fraud,[25] and limited recourse for victims due to mandatory arbitration clauses.[26] Eager to make a sale and attract more customers, many companies post advertisements highlighting the availability of government subsidies but fail to clarify that an income is required to qualify for such programs.[27] Pushy sales representatives[28] are then dispatched to the homes of interested parties to conduct their sales pitch and officially close the deal, even if it requires the use of deceptive tactics.[29] For example, sales representatives often use iPads during the sales presentation, as it allows the representative to skip over the fine print and even mislead customers about what documents they are signing.[30]
Claver Campbell, a 76-year-old homeowner from Queens, is one of many Americans who has fallen prey to these solar scammers.[31] Ms. Campbell lives on a fixed income and struggled to afford her high utility bills.[32] She became interested in purchasing solar panels after seeing an online ad promising a free, new roof to qualifying seniors who purchase solar panels.[33] During her meeting with a sales representative, she was promised a monthly payment of only $184 and given a “detailed” breakdown of the costs and savings.[34] However, the emailed copy of the contract contained numerous discrepancies from the meeting. Notably, the contract stated that she was responsible for a $160,000 loan and monthly payments three times larger than expected.[35] The contract also included her email signature, despite her insistence that she never signed anything.[36]
Ms. Campbell tried to cancel the agreement multiple times to no avail.[37] Unable to afford the payments, the solar panel company has since placed a lien on her home.[38] She is now suing the solar panel company and its lending partner in federal court for “fraudulent, deceptive, and abusive business practices.”[39] Since her lawsuit was filed only in September 2024, it is unclear whether she will have her day in court or be compelled to arbitration like many other consumers.[40]
Solar subsidies were intended to enable all Americans to invest in solar power, and yet consumers are being exploited for profit. This practice ultimately harms both consumers and the environment, as stories of prior consumers’ negative experiences while attempting to go green will likely discourage others from embracing clean energy.[41] Proactive steps must be taken to prevent the exploitation of consumers before they enter solar contracts, as there is little recourse once the contract is signed due to the presence of mandatory arbitration clauses.[42] Potential remedies[43] include strict guidelines surrounding solar advertisements,[44] support for third-party financial counseling,[45] required distribution of government-issued material with laymen’s explanations[46] of available subsidies,[47] and mandatory disclosure of such materials.[48] Ultimately, by advocating for stronger regulations and supporting initiatives that protect vulnerable communities, we can build a future where solar energy is both accessible and trustworthy, ensuring that the transition to renewable energy benefits everyone.
[1] Kayleigh Rubin, Molly Freed, & Ashna Aggarwal, 1 in 7 Families Live in Energy Poverty, States Can Ease That Burden, RMI (Dec.18, 2023), https://rmi.org/1-in-7-families-live-in-energy-poverty-states-can-ease-that-burden/ [https://perma.cc/TLN8-C2LN].
[2] Climate change anxiety refers to extreme fear and stress about the looming threat climate change. Charles Schmidt, Climate Anxiety, Hᴀʀᴠ. Mᴇᴅ. (2023), https://magazine.hms.harvard.edu/articles/climate-anxiety [https://perma.cc/M8F9-E4Y9].
[3]Alex Tyson, Cary Funk, & Brian Kennedy, Americans Largely Favor U.S. Taking Steps To Become Carbon Neutral by 2050, Pᴇᴡ Rsᴄʜ. Cᴛʀ. (March 2022), https://www.pewresearch.org/science/2022/03/01/americans-largely-favor-u-s-taking-steps-to-become-carbon-neutral-by-2050/ [https://perma.cc/BF4U-QBY2].
[4] Carbon neutrality refers to net-zero carbon dioxide (CO2) emissions attained by balancing the emission of CO2 with its removal stop its increase in the atmosphere that causes global warming. To achieve carbon neutrality, we need to switch to carbon free renewable energy resources. Jing M. Chen, Carbon neutrality: Toward a sustainable future, 2 Iɴɴᴏᴠᴀᴛɪᴏɴ 1 (2021), https://pmc.ncbi.nlm.nih.gov/articles/PMC8454731/ [https://perma.cc/Y99Q-AK88].
[5] Colin Kinniburgh, Solar Companies Scammed Queens Homeowner Into Predatory Loan, Lawsuit Alleges, N.Y. Fᴏᴄᴜs (Sept. 11, 2024), https://nysfocus.com/2024/09/11/new-york-solar-panels-electric-bill [https://perma.cc/5WVW-4ZSB].
[6] Alana Semuels, The Rooftop Solar Industry Could Be on the Verge of Collapse, Tɪᴍᴇ (Jan. 25, 2024, 7:00 AM), https://time.com/6565415/rooftop-solar-industry-collapse/ [https://perma.cc/3EYP-Y2GF].
[7] Natural resources that cannot be replenished once depleted because they take longer than the natural human lifetime to form. Fossil fuels such as coal, oil, and gas are non-renewable resources. Saddique Ansari, Non-Renewable Resources, Eᴄᴏɴ. Oɴʟɪɴᴇ (Dec. 29, 2023), https://www.economicsonline.co.uk/definitions/non-renewable-resources.html/ [https://perma.cc/7ZA5-WF9N].
[8] The United Nations estimates that the burning of fossil fuels accounts for over 75% of greenhouse gas emissions and 90% of all carbon dioxide emission. Causes and Effects of Climate Change, U.N., https://www.un.org/en/climatechange/science/causes-effects-climate-change#:~:text=Fossil%20fuels%20%E2%80%93%20coal%2C%20oil%20and,of%20all%20carbon%20dioxide%20 [https://perma.cc/7ACT-FUFJ] (Last visited on Oct. 29, 2024).
[9]Melissa Denchak, Fossil Fuels: The Dirty Facts, Nᴀᴛ. Rᴇs. Dᴇғ. Cᴏᴜɴᴄɪʟ (June 1, 2022), https://www.nrdc.org/stories/fossil-fuels-dirty-facts#sec-whatis [https://perma.cc/X8UT-NZGD].
[10] Jeremy Martin, Why Are Gasoline Prices So Volatile?, Tʜᴇ Eᴏ̨ᴜᴀᴛɪᴏɴ (March 29, 2022, 11:15 AM) https://blog.ucsusa.org/jeremy-martin/why-are-gasoline-prices-so-volatile/ [https://perma.cc/L59R-XP25]; Lauren Melodia & Kristina Karlsson, Energy Price Stability: The Peril of Fossil Fuels And The Promise of Renewables, Rᴏᴏsᴇᴠᴇʟᴛ Iɴsᴛ. (May 2022), https://rooseveltinstitute.org/wp-content/uploads/2022/05/RI_EnergyPriceStability_IssueBrief_202205.pdf [https://perma.cc/8H6P-AWWB].
[11] Climate change will further exasperate energy price fluctuates because rising temperatures induce the need for greater energy to be devoted to cooling. This puts strain on our already stressed energy infrastructure. Additionally, climate change intensifies the power and increases the frequency in which natural disasters occur. Their destructive power threatens vital infrastructure and halts the production of needed resources. Bernard Njindan Iyke, Climate Change, Energy Security Risk, and Clean Energy Investment, 129 Eɴᴇʀɢʏ Eᴄᴏɴ. (2024), https://www.sciencedirect.com/science/article/pii/S0140988323007235 [https://perma.cc/W3VL-9FSG]; About 25% of Gulf Of Mexico oil production shut in due to Hurricane Helene, Rᴇᴜᴛᴇʀs (Sept. 26 2024, 2:24 PM), https://www.reuters.com/markets/commodities/about-25-oil-production-shut-us-gulf-mexico-due-hurricane-helene-2024-09-26/ [https://perma.cc/GRN2-BJL4].
[12] What is “clean energy”? Is any kind of energy completely clean?, MIT Cʟɪᴍᴀᴛᴇ (May 7, 2024), https://climate.mit.edu/ask-mit/what-clean-energy-any-kind-energy-completely-clean [https://perma.cc/LS87-PNVH].
[13] The production and usage of fossil fuels causes water pollution, land degradation and high carbon emissions. These emissions then trap heat in the atmosphere and result in higher global temperatures. Clean energy does not produce these effects and does not strain the earth’s resources. Denchak, supra note 9; What is “clean energy”? Is any kind of energy completely clean?, supra note 12.
[14] See generally Melodia & Karlsson, supra note 10; What is “clean energy”? Is any kind of energy completely clean?, supra note 12.
[15] Neuman, supra note 15.
[16] The average installation cost is $30,000. Emily Walker & Vikram Aggarwal, Solar Panel Cost in 2024: It may be lower than you think, Eɴᴇʀɢʏ Sᴀɢᴇ (Oct. 7, 2024), https://www.energysage.com/local-data/solar-panel-cost/ [https://perma.cc/WT6B-NLSJ].
[17] Rebecca Leppert & Brian Kennedy, Home Solar Panel Adoption Continues to Rise in the U.S., Pᴇᴡ Rsᴄʜ. Cᴛʀ. (Oct. 14, 2022), https://www.pewresearch.org/short-reads/2022/10/14/home-solar-panel-adoption-continues-to-rise-in-the-u-s/ [https://perma.cc/W3Y6-XTUG]; A Dᴇᴄᴀᴅᴇ ᴏғ U.S. Sᴏʟᴀʀ Gʀᴏᴡᴛʜ, Cʟɪᴍᴀᴛᴇ Cᴇɴᴛ. (Apr. 3, 2024), https://www.climatecentral.org/climate-matters/a-decade-of-us-solar-growth-2024 [https://perma.cc/4YU6-Y9K8]; Neuman, supra note 15.
[18] Alison Kasch, Solar Tax Credit By State In 2024: The Ultimate Federal Solar Energy Tax Credit Guide, Fᴏʀʙᴇs (July 30, 2024, 1:40 AM), https://www.forbes.com/home-improvement/solar/solar-tax-credit-by-state/ [https://perma.cc/8JD8-TWDP].
[19] Leppert & Kennedy, supra note 17; Homeowner’s Guide to the Federal Credit for Solar Photovoltaics, Oғғɪᴄᴇ ᴏғ Eɴᴇʀɢʏ Eғғɪᴄɪᴇɴᴄʏ & Rᴇɴᴇᴡᴀʙʟᴇ Eɴᴇʀɢʏ (updated April 2024), https://www.energy.gov/eere/solar/homeowners-guide-federal-tax-credit-solar-photovoltaics [https://perma.cc/2LG8-MTYU].
[20] A Dᴇᴄᴀᴅᴇ ᴏғ Gʀᴏᴡᴛʜ ɪɴ Sᴏʟᴀʀ ᴀɴᴅ Wɪɴᴅ Pᴏᴡᴇʀ, supra note 17.
[21] Id.
[22] Neuman, supra note 15.
[23] Id.
[24]CFPB Report Finds Lenders Cramming Markup Fees and Confusing Terms into Solar Energy Loans, Cᴏɴsᴜᴍᴇʀ Fɪɴ. Pʀᴏᴛ. Bᴜʀᴇᴀᴜ (Aug. 7, 2024), https://www.consumerfinance.gov/about-us/newsroom/cfpb-report-finds-lenders-cramming-markup-fees-and-confusing-terms-into-solar-energy-loans/ [https://perma.cc/9886-5UXN].
[25] Kinniburgh, supra note 5.
[26] Semuels, supra note 6.
[27] See Going Solar, Oғғ. ᴏғ ᴛʜᴇ N.Y. Sᴛᴀᴛᴇ Aᴛᴛ’ʏ Gᴇɴ., https://ag.ny.gov/publications/going-solar [https://perma.cc/5XWQ-DF9N]; Homeowner’s Guide to the Federal Credit for Solar Photovoltaics, Oғғ. ᴏғ Eɴᴇʀɢʏ Eғғɪᴄɪᴇɴᴄʏ & Rᴇɴᴇᴡᴀʙʟᴇ Eɴᴇʀɢʏ (updated April 2024), https://www.energy.gov/eere/solar/homeowners-guide-federal-tax-credit-solar-photovoltaics [https://perma.cc/2LG8-MTYU].
[28] Alana Samuels, Keith Romer, Jenny Lawton, & Emma Peaslee, Rooftop Solar’s Dark Side, NPR (July 12, 2024, 6:28 PM), https://www.npr.org/2024/07/12/1197961036/rooftop-solar-panels-energy-bills-marketing [https://perma.cc/3EYP-Y2GF].
[29] Solar sales representatives are paid by commission from individual sales. This system incentivizes pushy sales tactics because they do not get paid if they do not make any sales. Additionally, many companies have bonus rewards that are granted to the top sales representatives. See generally, Semuels, supra note 6; Samuels, Romer, Lawton, & Peaslee, supra note 28; Kinniburgh, supra note 5; LAS Lawsuit Takes Aim at Solar Panel Scammers, Lᴇɢᴀʟ Aɪᴅ Sᴏᴄɪᴇᴛʏ (Sept. 12, 2024), https://legalaidnyc.org/news/lawsuit-solar-panel-scammers/ [https://perma.cc/EME2-47KS].
[30] Semuels, supra note 6.
[31] Kinniburgh, supra note 5.
[32] Id.
[33] Kinniburgh, supra note 5.
[34] LAS Lawsuit Takes Aim at Solar Panel Scammers, supra note 29.
[35] Kinniburgh, supra note 5.
[36] Id.
[37] Id.
[38] LAS Lawsuit Takes Aim at Solar Panel Scammers, supra note 29.
[39] Kinniburgh, supra note 5.
[40] Semuels, supra note 6.
[41] Chen, supra, note 4.
[42] Consumer advocates have largely criticized mandatory arbitration clauses for being coercive and depriving consumers of their right rights. Rulings decided by arbitration are unappealable and are often unfairly biased towards the corporation. Katherine V.W. Stone & Alexander J.S. Colvin, The Arbitration Epidemic, Eᴄᴏɴ. Pᴏʟ'ʏ Iɴsᴛɪᴛ. (Dec. 2015), https://www.epi.org/publication/the-arbitration-epidemic/ [https://perma.cc/X5PP-JP5C]; Semuels, supra note 6.
[43] It is not enough to create these remedies; they also require active enforcement.
[44] The FTC already has strict guidelines governing environmental claims. 16 CFR § 260.2
[45] The Consumer Financial Protection Bureau has a blog post about credit counseling and offers support to connect with counselors. What is credit counseling?, Cᴏɴsᴜᴍᴇʀ Fɪɴ. Pʀᴏᴛ. Bᴜʀᴇᴀᴜ (last updated Aug. 2, 2023), https://www.consumerfinance.gov/ask-cfpb/what-is-credit-counseling-en-1451/ [https://perma.cc/WW5B-M5HE]; New York City offers free financial counseling through its Financial Empowerment Center. Free programs like this are incredibly important as they help make financial counseling available for people of all income levels. Get Free Financial Counseling, NYC Cᴏɴsᴜᴍᴇʀ Wᴏʀᴋᴇʀ Pʀᴏᴛ. (last visited Nov. 11, 2024) https://www.nyc.gov/site/dca/consumers/get-free-financial-counseling.page [https://perma.cc/BZY4-FUT5].
[46] “To prevent deceptive claims, qualifications and disclosures should be clear, prominent, and understandable. To make disclosures clear and prominent, marketers should use plain language and sufficiently large type, should place disclosures in close proximity to the qualified claim, and should avoid making inconsistent statements or using distracting elements that could undercut or contradict the disclosure.” (italicized for emphasis) 16 CFR § 260.3.
[47] Consumers will be more comfortable taking advantage of subsidies if they are aware of their existence and understand them. Michael Karpman & Elaine Maag, Lack of Awareness and Confusion over Eligibility Prevented Some Families from Getting Child Tax Credit Payments, Uʀʙ. Iɴsᴛ. (2022), https://www.urban.org/research/publication/lack-awareness-and-confusion-over-eligibility-prevented-some-families-getting [https://perma.cc/WGK2-URWF].
[48] 16 CFR § 260.3.
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