- Office of Attorney General Maura Healey
Media Contact for On Summer Solstice, AGHealey Releases Solar Power Guidance for Residents and Businesses
BOSTON — On the summer solstice, the day of the year with the most sunlight, AG Healey released new guidance for residents and small business owners considering solar energy.
Switching to solar may deliver clean renewable energy and help lower electricity bills, but the process can also be confusing and intimidating. The AG’s guidance is designed to help residents and businesses consider which solar option may be a good fit for them. The AG’s guidance also helps customers avoid potential consumer pitfalls when entering into a contract for a solar product.
“On the longest day of the year, and with more summer weather ahead, we want to make sure Massachusetts residents and businesses who are considering solar to power their home or business have the resources that they need,” AG Healey said. “We hope this guidance helps customers select the best solar option for them.”
The guidance was created following a series of workshops the AG’s Office held with the solar industry to discuss best practices to protect consumers and to provide information on their responsibilities under Massachusetts law.
There are three main solar options in Massachusetts – direct ownership, third-party ownership, and community shared solar.
With direct ownership, the customer pays – either through cash or a loan – for the installation of a solar energy system on their property. The customer owns, operates, and is responsible for maintaining the solar energy system. With this option, the customer typically retains sole ownership of the energy, environmental incentives, and tax credits that the system generates.
With third-party ownership, a third-party company installs, owns, and maintains a solar energy system on a customer’s residence or business. Third-party ownership, such as a solar lease or power purchase agreement, can be a good option for customers who are unable to pay up front for a solar energy system. Customers who sign up for a solar lease make monthly payments to the third-party for the right to use the electricity and/or credits that the system generates.
With a power purchase agreement, the customer purchases the electricity that the system generates at an agreed-upon price that typically increases over the term of the contract. Although there are not usually up-front costs with solar leases or a power purchase agreement, customer obligations under these contracts can last for a long time – most last for 20 years or more and can continue even if a customer moves from the home where the solar energy system is installed. The third-party owner usually has the right to collect and keep any tax credits and environmental claims generated by the solar energy system.
Community shared solar is often a good fit for customers who would like to participate in solar energy without installing solar panels on their roofs. These customers include those who rent or whose property cannot host a solar energy system. With this option, residents can subscribe to a share of a large solar energy system. In return for paying a fee for the subscription, customers receive net metering or solar credits to reduce their electricity bills. This option allows multiple households to share in the benefits of a single large solar energy system.
Do your research and review your contract
The AG’s Office recommends that customers research their options, understand the range of solar products available, and find a reputable company before selecting a solar product. Once customers select a solar product, the AG’s Office recommends that the customer read and review all the contract terms and conditions and understand all potential fees before signing. Customers should be aware of the following: any automatic contract price increases as part of their financial obligations; the length of the contract; what the customer’s responsibilities are including any responsibilities to operate and maintain the solar energy system; what happens to the solar energy system at the end of the contract; what happens if the customer moves prior to the end of their contract; any cancellation fees; and any and all warranties. Solar product offerings should include a consumer disclosure form with this information, as required by the Department of Energy Resources’ SMART program.
What to understand about savings claims
If the solar company claims that it will save the customer money, the AG’s Office encourages customers to ask the solar company about any assumptions underlying those savings claims. Customers should carefully review and understand any estimates about future utility rates and make sure that the solar company’s savings claims take into account all of the customer’s energy expenses – meaning the customer’s utility bill and any payments that the customer is required to make for the solar product under the contract.
Customers who currently receive a low-income discount rate with their utility should make sure that any savings estimates take into account the customer’s low-income discount, which is a discount on the entire electric bill.
Aggressive sales tactics
Do not respond to any solar energy salesperson claiming to be affiliated with or employed by a utility company. At this time, no electric utility company can offer solar products to customers, and anyone claiming to be affiliated with a utility company is likely employed by a solar marketing or sales company. The AG’s Office recommends that customers be wary of aggressive sales tactics and that they not allow anyone to pressure them into signing up for a solar product. If someone refuses to take no for an answer or to leave your home, contact law enforcement.
When maintenance providers go out of business
From time to time, solar energy systems can require maintenance for a variety of reasons and a solar installer should provide customers with the name of a maintenance company regardless of whether the customer owns or leases the solar product. If the solar company goes out of business or is sold, customers should check their contract and the warranties provided at installation, and if there are not any successor companies listened in the contract, customers should find another service provider or file a complaint with the Attorney General’s Office.
As the state’s ratepayer advocate, AG Healey supports the state’s transition to a clean energy system and is working to ensure that it is done correctly and in a way that is reliable and fair to all customers.
For more information on switching to solar energy, visit the AG’s solar guidance at www.mass.gov/ago/solar. Other resources include the Massachusetts Clean Energy Center’s Residential Guide to Solar Electricity, the Department of Public Utilities’ Net Metering Guide, the Solar Massachusetts Renewable Target (SMART) Program Consumer Protection and Disclosure Forms, and the Solar Energy Industries Association’s Consumer Protection Primer.