By Larry Bell |March 31st, 2015

Last December Rep. Paul Gosar (R, AZ), a member of the Committee on Oversight and Government Reform, along with 11 other House members, sent a letter to the Federal Trade Commission warning that the new solar-leasing market industry has engaged in “deceptive marketing strategies” to sucker unsuspecting homeowners into misleading zero-money-down teaser loan deals.

Some of these purchasers who are now struggling to sell their homes were not “fully aware of the terms of their 20- to 30-year leases” which will exceed the life of the roof the panels are mounted to.

Such practices have prompted the U.S. Treasury Department to investigate SolarCity, the biggest player in the solar installation subsidy industry for possible misrepresentations about the “fair market value” of its systems and services.

Yet, as the company is expected to lose more than $1 billion through 2016, it still seeks to score more taxpayer subsidies out of the American Recovery and Reinvestment Act, which has already kept the industry going for far too long.Class action lawsuits filed by California and Louisiana homeowners against solar panel leasing companies likewise allege fraudulent marketing campaigns. Here, unscrupulous promoters often seek legitimacy through referral fees paid to local real estate brokers, architects, and contractors.

Writing in NewsmaxBradley Blakeman explained how the scam works, one where non-utility third-party contractors/installers approach homeowners and small businesses promising significant energy savings from rooftop solar systems with the enticement of a 20-year lease and little or no upfront installation and operation costs. The purported savings are based upon too-good-to-be-true inflated and unsupportable estimates of future utility rates.As Blakeman notes: “And like any scam, the perpetrators must act quick with high-pressure sales tactics employed to sign up as many victims as possible before flaws in the leasing model are made public. Left in the fine print, for example, is the fact that the initially low lease payments can then escalate year after year. Soon customers may find themselves stuck with paying more for electricity than they would without subscribing.”

Nor are homeowners typically aware that since the equipment must be insured, their solar installations may increase their property insurance premiums. In some cases the customer who doesn’t own that equipment is also responsible to pay for its maintenance. And while each purchasing homeowner typically gets a $1,000 subsidy from other taxpayers and grid users, the actual savings from electricity generated usually doesn’t even come close to covering the cost of materials, installation, and upkeep.Sometimes worst of all, homeowners aren’t told that upon entering into the solar lease, the solar company will secure the contractual obligations of the customer by placing a lien or other encumbrance on the entire real property . . . not just on the solar installation.

These liens can be sold to other creditors at a deep discount, offering no remedy to the solar customer if the profiteer goes out of business or simply walks away. When this happens, any refusal to pay — even for legitimate reasons — creates risks of potential foreclosure or other legal action by the new lease holder.

Homeowners may learn about the lien transfers for the first time after attempting to sell their property to a prospective buyer.

Many also experience other problems in selling their property. In some cases the solar installations are defective or become inoperable due to lack of maintenance. Removal can cause expensive roof damage. Improperly maintained fixed panels can cause roof leaks, and even fire hazards.

On top of all of this, solar panel leasers along with other electricity ratepayers also get hit to compensate utility companies for losses incurred under a “net metering” scheme which forces customers to purchase solar power at inflated, money-losing costs.

This happens through a shell game whereby credits subtracted from customer utility bills for electricity not used from the electric grid are simply incorporated back into overall rate increases.

Under the Energy Policy Act of 2005, all public utilities are required to offer customers net metering upon request. Currently, 43 states, the District of Columbia, and four U.S. territories have such policies in place. In addition, about half of all states have “renewable energy standards” which require utilities to purchase a set percentage of their electrical power from higher-than-market solar and wind sources.It’s time to recognize the decidedly shady side of the solar panel leasing industry, one whose “success” depends upon subsidies which enable homeowners to effectively have solar leasing firms install then for free, only to be gouged later along with generous — read as gullible — taxpayers. Let’s finally put a lock on that cookie jar.

NOTE: This article first appeared at: http://www.newsmax.com/LarryBell/solar-bailout-gosar/2015/03/30/id/635202/#ixzz3VyQqssxR

Conor Cummins

A graduate of Syracuse University and Suffolk Law, Conor is licensed to practice law in the Commonwealth of Massachusetts as well as several other New England states and New York, New Jersey and Washington D.C.

After graduating from Suffolk Law, Conor passed the Massachusetts Bar Exam on his first attempt and began analyzing and reviewing contracts at the corporate level for General Electric.

While working for General Electric, he analyzed and subjectively reviewed documents for substance and privilege and also developed a thorough understanding of factual and legal issues pertinent to several projects

Richard Nollman

Richard Nollman is the Chief Technology and Information Officer of Energy Mitigation Associates. He is an innovative leader driving technical vision to achieve EMAs mission, to provide our clients with the best possible outcomes resulting from environmental consumer litigation.

As CTO/CIO, his role is to develop strategies for using technological resources to evaluate and implement new systems and infrastructure to ensure that technologies are used efficiently, profitably, and securely.

A graduate of Boston University School of Public Communications, Richard has spent over 30 years working with complex technologies for Fortune 500 companies and multiple start-ups creating business value and growth through technology and information management.

Steven Giacalone

Steven Giacalone is a career business management and finance professional who has decades of experience in the commercial, mortgage, and investment banking sectors. He also has extensive experience in various investment analysis and management roles within the commercial real estate development industry.

For the past 20 years he had provided effective consultative vision and independent management guidance to dozens of start-up companies who have collectively sought out his exceptional organizational management skills and keen business acumen. In the wake of the 2008-09 financial crisis he successfully helped to assemble and originate 15 FINRA fraud and misrepresentation arbitration cases against Auction Rate Securities (ARS) Wall Street broker dealers.

A former USAF officer, his natural leadership talent has and continues to produce enormous incremental enterprise value for such clients. He holds a BA with majors in both Mathematics and Social Sciences from Dowling College as well as an MBA from Harvard University. He also recently completed an Advanced Studies Program (ASP) Fellowship from MIT, with a concentration in Financial Engineering.