I have helped many homeowners deal with solar panel companies when things go wrong with their systems. If anyone is considering having solar panels installed on their home or business, it is imperative that you know your rights. There are several things you need to consider when reviewing the solar panel contract.  I strongly believe you should have an experienced attorney review the solar panel contract before you sign, so the attorney can explain the terms to you. This article discusses only a few examples of things to consider before having solar installed on your home or business.

 

Solar panels on residential houses have become much more prevalent in the past decade. Odds are if you drive through a residential neighborhood, you will see at least one house with the large panels installed on the roof. To obtain customers, it is common practice for solar panel companies to have salespeople go door-to-door offering homeowners the ability to have solar installed. In addition, solar panel companies often enter into agreements with solar panel installers to solicit the sale of solar panels.  While they have an agreement together relating to the sale of solar panels, the companies are completely separate, a fact that tends to confuse homeowners. 

 

The sales pitch given varies slightly but on the whole it tends to include promises of reduced or eliminated energy bills, hefty federal and/or state rebates, money to the homeowner for selling back solar to the grid, and the option to purchase the solar panel system at the end of the contract terms. Sometimes, even a new roof is promised by the salespeople. As an attorney who has been engaged in solar panel litigation for years, I can tell you that the alleged benefits are stressed while the actual cost of the system is downplayed or not disclosed at all. 

 

The reality is that very few people will qualify for the federal rebate for having solar installed. Despite what a salesperson may have told you, the rebate is not cash in you pocket. If you don’t owe the federal government taxes at the end of the year, you will not be able to use the rebate and it will simply disappear. For example, let’s say you are promised a 30% rebate and the system costs $50,000. The amount of the rebate would be $15,000. You would have to owe the federal government $15,000 or more to be able to receive the tax rebate of $15,000. If you owe less, the rebate only applies to your tax bill. No cash will come back to you as a result of this tax rebate. If you don’t use it, you lose it!

 

Most leases for solar panels are for a term of 25 years and the contract typically binds your heirs in the event you die before the lease is up. If you have the panels installed, your surviving spouse or children will be liable for the monthly payments until your house is sold and the contract is transferred to the new owner. The long-term lease may impact your ability to sell your house as some potential purchasers may not want to be bound by a lease you entered into. In addition, if you need a roof replacement during your lease, most of the time, in most instances, you are responsible for paying the solar panel company for them to remove and reinstall the system. If your new roof comes with a warranty, once you have the panels reinstalled, the new roof warranty will likely be voided. This is due to the fact that the solar panel system must be drilled into your roof and this creates a potential of water penetration issues in the future. 

 

Most solar panel contracts contain water penetration warranties but some are shorter than others. If you are going to have solar installed on your roof, you need to know the length of time the solar panel company will fix any water that comes into your house from the panels. A common complaint I get from solar customers is water damage as a result of the solar panels, so the duration of the roof penetration warranty is important. There are some contracts that provide you with a very short roof penetration warranty, such as one year and others that give you up to ten years. Identifying who must pay for the panels to be removed and then reinstalled in the event of a leak is also critical, as the cost can be $2,500 and up. If your roofer takes the panels down, in most cases, you have voided the warranty with the solar panel company.

 

Another common complaint I receive from solar customers is that the cost of the solar was not explained to them. I have represented several individuals who were promised that the entire system would be completely free. After the solar panels were installed and they received their first monthly bill, they were shocked! These individuals would call to ask why they were receiving a bill if the system was free and they all later learned that the salesperson lied to them and that the solar panels were not free. In fact, they learned that they would be responsible for making monthly payments (that vary between $70 and $450) per month for twenty-five years AND if they failed to give the solar panel company the 30% federal tax rebate (again, that few qualify for) the monthly bills would increase.  Now that you know that the federal rebate can only be applied to your tax liability, you need to understand that unless you pay the $15,000 to the solar panel company under this example, your monthly payment will increase. The solar contract, sometimes called a Purchase Power Agreement, will have the increase listed in it. 

 

Solar production is a huge issue as well. Solar customers are promised that they will receive a substantial reduction, if not elimination, of their electric bill. However, time after time, I receive complaints that the system is not producing or that it produces such a small amount that the payments being made to the solar panel company along with payments to the utility company essentially increased the total cost of the customer’s monthly expenses. The salespeople will swear that you’ll be saving money by switching to solar, but that is not a guarantee by any means. 

 

If you are considering having solar installed, read the contract. Yes, it’s very long and complicated but the terms in it are essential to understand. Read the fine print. Know the monthly amount you are responsible for paying. Do the math! How many payments must you make over the course of twenty-five years and does that amount make sense if you still have an electric bill to pay? These are questions you need to answer before you commit to having solar installed. 

 

There are many other things to consider before having solar panels installed. If you need further guidance before entering a solar panel contract, contact an experienced attorney to ensure you know exactly what you are signing up for. The attorneys at Rivers Law Firm are available to review the terms of a solar contract with you or consult with you if you have solar and something went wrong.