Solar Consumer Protection
Solar consumer protections broadly include laws, policies, and programs aimed at protecting consumers entering the solar market against unsafe and unfair goods, services, and business practices.
In the rapidly evolving solar industry, state and local governments and industry groups are implementing a variety of approaches to ensure that consumers who choose to interact with the distributed solar photovoltaic (DPV) market remain safe and are treated fairly. Although several federal and state-level consumer protection laws apply to the DPV market, some state and local governments and industry groups have implemented additional, solar-specific consumer protections. Efforts to protect residential solar customers fall broadly into two categories:
- Physical safety, which is addressed through provisions such as system design and standards, building codes, fire protection requirements, and workforce standards and credentialing
- Strategies to protect customer financial investments by preventing fraud, abuse, and deception in the residential solar market.
Although it is ultimately the consumer's responsibility to complete due diligence when learning about markets and products, industry and government play a role in ensuring that consumers have access to this information.
Existing Consumer Protection Landscape
Federal Trade Commission Regulations
The Federal Trade Commission Bureau of Consumer Protection is charged with investigating and stopping Unfair, Deceptive, or Abusive Acts or Practices. The agency regulates all advertising and telemarketing within the U.S., which also extends to how solar developers advertise their systems.
Safety Standards
Codes provide a base level of safety to consumers. These include:
International Residential Code
These codes minimize the technical risks of participating in the DPV market.
Implementation Considerations
Government and industry approaches to solar consumer protections range from less formal practices, such as consumer education, to more formal actions, such as enacting regulations or establishing grievance procedures. In broad terms, solar consumer efforts include consumer education, guidelines and standardized contracts, workforce standards and credentialing, consumer protection regulations, and grievance procedures.
Consumer Education
Consumer education materials focus largely on helping customers understand contract terms, financing options, and local policy considerations, all of which are discussed in more detail below. Resources may also highlight questions that consumers should consider and ask of solar developers and financing institutions before entering into contracts. For example, Minnesota has leveraged online resources to share information about local and state-level solar policy to aid consumers in understanding the local policy landscape. In addition, New York, Vermont, New Mexico, and Massachusetts have published state-specific homeowner guides to residential solar and financing options.
Understanding Contract Terms
Installing a rooftop PV system raises many questions, which may be included in a lengthy contract:
- What is the length of the contract?
- Who owns the PV panels?
- What happens if the customer wants to sell their house?
- What happens if the PV system is damaged? Who is responsible for insurance?
- Is there a minimum production guarantee?
- Who can take advantage of state and federal solar incentives?
The answer to many questions consumers may have about their contract are often different depending on the financing mechanism.
System Financing
Customers entering the DPV market may initially be confused about what exactly they are purchasing and owning. For residential solar consumers, the main financing arrangements include direct purchase, solar loans, and third-party ownership models like solar leases and power purchase agreement.
Navigating Solar Policies
To fully understand the financial costs and benefit of installing solar, consumers need to comprehend the national, state, and local laws and incentives that influence solar investments, including net metering regulations, renewable energy certificate markets, and tax credits.
Guidelines and Standardized Contracts
Developing clear guidelines for DPV installers and third-party system owners is another important element of a robust consumer protection strategy. Additionally, guidelines or standardized contract templates can help consumers understand contract terms and can create a more competitive market by helping consumers accurately compare offers.
Workforce Standards and Credentialing
Product and workforce standards and credentials are used as a consumer protection strategy across many industries globally. In addition to DPV system and component safety standards that states can elect to adopt, state and local governments can implement workforce standard and credentialing practices to foster safer and more transparent residential solar markets. Consumers that use businesses with credentialed workers can be sure that the workers have the competencies to perform quality work using industry best practices for safety and cost-effectiveness.
Enacting Consumer Protection Regulations
Several states have passed legislation regulating rooftop and community solar markets. These include mandatory rooftop disclosure laws and community solar disclosure regulations, which require developers to provide certain details about the PV systems and transaction to customers upfront. Arizona, New Mexico, and Utah have passed mandatory rooftop PV disclosure laws, while Minnesota and Maryland have instituted mandatory community solar disclosure regulations.
Establishing Grievance Procedures
Establishing solar grievance procedures can help state attorney general offices evaluate complaints for the residential DPV market. When paired with strong mandatory disclosure laws, these procedures can help the Federal Trade Commission and state attorney general offices evaluate customer complaints more efficiently—and thus, address more of them. Industry groups such as SEIA have also developed internal complaint processes for consumers.
NREL Publications
Best Practices in Photovoltaic System Operations and Maintenance., NREL Technical Report (2016)
Residential Solar Photovoltaics: Comparison of Financing Benefits, Innovations, and Options, NREL Technical Report (2012)
Additional Resources
For more information about consumer protection, the following tools and resources may be helpful:
Consumer Protection, Interstate Renewable Energy Council
Residential Consumer Guide to Solar Power, Solar Energy Industries Association (2018)
Guide for States: Consumer Protection for Community Solar, Solar Energy Industries Association (2017)
Something New Under the Sun: Competition and Consumer Protection Issues in Solar Energy, Federal Trade Commission Workshop (2016)
A Homeowner's Guide to Solar Financing: Leases, Loans and PPAs, Clean Energy States Alliance (2015)
Solar Business Code, Solar Energy Industries Association
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