Financial concerns heat up in solar panel leasing market

US politicians from both parties are calling on financial regulators to take a look at the sales practices employed in rooftop solar leasing deals, suggesting that homeowners may not be given sufficient information to judge the potential costs and risks.

12 Republican members of the House of Representatives have written to the Federal Trade Commission, claiming that leasing solar panels from a third party may be a harmful investment for homeowners if they are not in possession of detailed financial information.

In addition, a group of Arizona-based Democrat representatives has contacted the US Consumer Financial Protection Bureau (CFPB) requesting the regulator take a close look at the solar leasing market, following rapid expansion in that state.

In a letter, the group says leasing companies “may be overstating the economic benefits of signing a long-term solar lease while failing to disclose important information” when making sales pitches.

Solar leases are a popular option for homeowners who do not want to pay upfront for rooftop solar panels and for non-profit organizations or government facilities that cannot take advantage of federal tax credits when they install solar, as the leasing companies are able to capture those subsidies.

The leases commonly have terms of 20 years and require monthly payments. However, the representatives say it is difficult for consumers to calculate whether those payments will be less than the amount of money they save by generating much of their own electricity with solar.

The letter states: “Customers are quoted savings each month on their utility bills, However, who calculates those estimations and are they accurate?”

The group is calling on the CFPB to review practices such as offering easy initial financial terms, and says the solar leasing industry should proceed “with caution and awareness”.