Camille Mitchell sat in her living room, phone clutched in her hand, listening for a voice to come through on the other line. She was on hold with the lender that financed the solar panel system on top of her Clear Lake City home.
She waited to discuss a $189 automatic withdrawal she and her husband Charles noticed on their account. They understood they would be responsible for monthly charges once their system started operating.
The only problem was that it wasn’t.
A growing number of residents going the solar energy route are finding themselves in similar situations. Some solar installers are soliciting contracts by appealing to consumers’ ability to save on electricity bills and potential interest in a greener option.
Yet months later, these companies close their doors due to financial or operational issues, leaving customers incurring costs while navigating how to get incomplete or botched installations up and running or repaired. Many also remain contractually obligated to the former business’s finance partner.
Lenders can help by offering to negotiate contracts or finding another solar installer to complete or fix these jobs. However, this process could take time, placing consumers in a longer limbo.
The Houston Press contacted Dividend Finance — Camille and Charles’s lender — for comment, and a spokeswoman with the financial company provided the following statement.
“In response to Vision Solar’s closure, Dividend has established a program to help customers with both system remediation and loan relief. Where feasible, Dividend will work with customers to engage replacement installers, at its own expense, to help complete projects and make solar panel systems operational. Dividend is also offering payment deferments to those customers whose installations are being completed. Dividend takes all customer complaints seriously and investigates them accordingly, including any complaints related to Vision Solar. Dividend is focused on its customers and ensuring they get the outcomes they expect when adding solar panels to their home.”
The spokeswoman declined to comment on whether or not Dividend was aware of Vision Solar’s financial status and consumers’ claims that the lender paid the installation company up front for its services.
Despite multiple calls to the former company, the Press could not reach Vision Solar for comment.
“I noticed that there was a void not being filled between installers and clients that were stuck with systems that no longer had a company contracted to take care of them,” said Kenneth Burnside, CEO at Burnside Solar Service. “Anyone and their mother can start a business and then go belly-up the next year or two, leaving all their customer’s hands’ tied.”
“When someone does lose an install company, the process comes down to the consumer. It’s the ‘pull yourself up by the bootstraps, you gotta figure it out’ mentality,” Burnside added. “There’s a lot of responsibility on the consumer end. They’re being taken advantage of by the seller.”
Burnside started his company last year after the installation business he worked for filed for bankruptcy. He describes himself as the person consumers can call for help with repairs and replacements when they have no one to go to.
He said the need for help when these companies vanish is a new, naturally evolving part of the solar industry. As the number of people seeking this assistance grows, there will be an emerging demand for more businesses like his.
As of the end of last year, 16.5 percent of Texans who installed solar systems lost their contract with their installer or their installer suspended services in the state, according to Solar Insure — a company that provides software monitoring and warranty plans for residential and commercial consumers.
Texas currently has the most solar power systems installed out of every other state in the country. This includes California, which maintained that status up until last year. However, last year saw a 52 percent reduction in sales in the state.
Higher interest rates, a tighter lending market and some utility rates decreasing slightly in Texas also financially challenged these companies. The installers that closed shop in the state included Suntuity Renewables and Pink Energy, two larger multi-state service companies, and two smaller businesses, Verisolar and Envirosolar – that catered exclusively to statewide consumers.
Suntuity and Pink Energy filed for bankruptcy, and ongoing litigation against both businesses is pending in several states.
Thirteen other installation companies have suspended their services in Texas, saying they need to attain financial stability before starting operations again. This temporary financial buffer period usually lasts one to two years but can vary per business.
“Let’s say they (consumers) had an installation done in early 2023. There’s a high probability that their installer either left the state or closed shop,” said Ara Agopian, founder and CEO of Solar Insure.
“So, if they need service in the future, if they need a panel replaced or there are some wiring issues that manifest themselves and they need a service provider to come out, it’s going to be much more challenging to find somebody in the area because more and more of these companies are shutting down,” he added.
If the trend continues, Agopian projected that what Solar Insure refers to as the “consumer abandon rate” could climb up to 25 percent by the end of 2024.
Charles said after choosing Vision Solar and subsequently signing the contract in August 2022, crew members took about seven months to come out to start the installation process. At the time, he and Camille thought these delays would be their biggest problem.
Instead, nearly two years later, they have a non-functioning solar system and no installer contractually committed to finish the job.
“I had this feeling I should tell them (the crew) don’t,” Camille said. “Just forget everything. We don’t want to proceed. And I ignored it.”
In theory, solar energy should work
According to Dr. Becca Jones-Albertus, director of the U.S. Department of Energy Solar Energy Technologies Office, rooftop solar installations have grown yearly over the past decade. About four million homes currently have solar systems on them.
Jones-Albertus, who now oversees SETO, said the office aims to reduce the cost of solar energy. When it first launched as the SunShot Initiative in 2011, one of its main goals was to bring solar prices down to where they were cost-competitive.
She added that the industry is in a place now where solar energy is the cheapest form of new electricity generation in much of the country. The cost target for residential solar was 50 cents per kilowatt hour in 2010 and dropped to 16 cents per kilowatt hour in 2017.
One of SETO’s 2030 goals is to cut the average minimum price of electricity for solar panel systems by 50 percent, from six to three cents. This would then reduce the cost target of residential solar to five centers per kilowatt hour.
The cost of solar energy can vary per location, the kind of solar system installed and the system’s access to direct sunlight. According to the U.S. Energy Information Administration, Texas’s average cost for residential electricity is roughly 14 cents per kilowatt hour.
Rice University professor Dr. Ramamoorthy Ramesh and the former founding director of the SunShot Initiative (now SETO) said innovations in other technologies, such as solar batteries, have expanded the financial benefits of residential solar systems.
According to Ramesh, batteries provide a way to ensure systems will operate and produce electricity at their usual capacity despite the weather conditions. However, they can come at a significant cost. A cheaper way for residents to access solar energy is through leasing, rather than installing and owning their own systems.
“Financing was a big problem, and that’s what led a whole bunch of companies to do third-party financing,” Ramesh said. “This basically means you (a consumer) rent out your rooftop, so they come and install solar panels for zero cost, and you are either using the electricity off of it or selling it to the grid if you’re not using it.”
“I think this is working very well because you can effectively get solar installation with zero cost down,” he added. “For you as a consumer, that’s good because you don’t have to pull any money out of your pocket. I could not afford $35,000 in 2010; now that’s different.”
Jones-Albertus said there are also a mix of ways, on the local, state and federal level, that make solar power a more affordable option.
Texas does not practice net metering statewide, like other states do. However, a federal tax credit is in place for the next nine years or so that provides up to a 30 percent reduction of the total cost of a consumer’s system. This credit can vary per person and is only applied if the resident qualifies. Jones-Albertus added that if a consumer is not eligible for a credit, additional options, such as rebates from utility providers or state governments, are available.
She said when it comes to incentives, ownership agreements or contracts, it is important for consumers to grasp the terms and consult financial advisors if needed. Not understanding the fine print of such offers could complicate the process quickly.
Ramesh indicated that the transition to solar may go awry if a consumer unknowingly selects an unqualified installer. This can be difficult to avoid as state and federal regulation is lacking in this arena due to much of the oversight regarding the installation and permitting process under localized purview.
“There’s a whole bunch of companies now, installers, many of them very credible, but not all have the same level. Some of them are fly-by-night people,” Ramesh said. “This is not government mandated, so it’s purely business practice.”
“There are some good companies and some not very good. In principle, all this should work seamlessly,” he added. “But it’s like any car dealership or clothing store. There’s a whole spectrum of people. Some are in it for the long haul, and some are just looking to make a quick buck, and they vanish.”
Liabilities and rising costs
Burnside said some of his client visits consist of routine repairs such as micro inverter replacements or squirrel bite fixes – surprisingly common, he notes – and others do not.
He added some situations he comes across are dangerous. Wires can be stripped in an attic and not run through specific hardware or conduits to ensure the connection is safe. This work is usually done by inexperienced servicemen or installers who do not know what they’re doing.
“There are people out there with systems installed by people who should be arrested and held accountable,” Burnside said. “I have to do a lot of damage control, which harms the solar market and makes everyone look bad. It makes the manufacturers look bad, and the state looks bad.”
Jose Treviño, an Austin resident and one of Burnside’s clients, found Burnside through a former employee of his original solar installer, Speir Innovations. Treviño had asked his electrician to shut his solar panel system off because the initial installation left the system sending the incorrect voltage to electrical ports in his house. This caused the lights and appliances to burn out and tripped the surge protectors.
Burnside was able to fix Treviño’s website connectivity issues so he could see his solar consumption and production online again. This was another problem Treviño had been having with his system for months.
Although Burnside was able to assist, Treviño is unsure if he wants to reactivate his system after switching it off.
Treviño pays roughly $270 for solar energy and about $300 for his electricity a month. A cost that could be reduced by nearly half if he chose not to get his system up and running again. In addition to this double expenditure, Treviño struggled to find somebody to help him when he needed to reactivate the webpage and figure out why his electrical system was short-circuiting.
Treviño later learned through speaking with a former employee that Speir was out of business. Before contacting Burnside, Treviño reached out to his manufacturer, Enphase Energy, where he was referred to their list of seven partner installers – all of which were not taking new customers.
“It’s like buying a car and then finding out there’s no mechanic in your area to fix it. I’m at the point where I don’t want to deal with it anymore,” Treviño said. I just want to remove the damn thing and put in a new roof. “Why should I pay more for what I was supposed to get cheaper?”
“It’s like buying a car and then finding out there’s no mechanic in your area to fix it.
Frank S. Razem faces a similar predicament. Like Camille and Charles, he is a Houston resident who chose Vision Solar as his installer. He said he also keeps up with his monthly electric and Dividend Finance payments — despite his solar system not currently operating.
Razem pays about $270 for his system and $300 for his monthly electricity. He added that he could try to contest the automatic payments to Dividend’s customer service, but he is concerned he would have to pay them regardless eventually.
In cases involving pending litigation against Pink Energy, Dividend received notices to suspend loan payments from attorney generals in the states that are involved in these ongoing lawsuits.
Dividend temporarily paused Camille and Charles’s payments when they challenged the first amount withdrawn from their account. Charles said this was not an easy process and felt like a “merry-go-round” of endless calls and constant mixed messages.
Camille added at one point, she had six to seven different phone numbers to reach the finance company.
“We’ve never defaulted on our credit loans, credit cards or anything. We’ve never gone bankrupt in our 50 years of marriage,” Camille said. “We don’t want to be put in the position where we are expected to make payments on something that is not finished.”
“We feel like we’ve been misled about 100 times minimum by Vision Solar, but by Dividend Finance, too,” she added. “We stayed in touch trying to figure out what was happening, and they gave us different stories. I don’t know what ways they were deceived or if they were trying to be a part of it.”
Camille and Charles said Dividend sent a crew member of a new installation company, TriSMART Solar, to assist with getting their system up and running. The installer came to their house to inspect the status of the installation and said he would send them a quote for the work that would need to be done.
That was roughly two weeks ago, and they have yet to receive an email or further documentation of the required repairs.
Burnside said he’s seen this often occur, especially in previous jobs, people in the industry preying on older or Spanish-speaking homeowners.
“There is so much that people need to learn about solar before they buy it, and they’re not learning it, and salespeople are coming in and like crows,” Burnside said. “They target anyone they think they can say random things to.”
How Can Consumers Protect Themselves
Consumers can get ahead of an installer going out of business in several ways to ensure they do not confront several problems that could result from the closure.
According to Jeremy Sanders, a Chapoton Sanders Scarborough law firm partner, this could include investing in a solar operations and maintenance insurance plan or purchasing solar equipment from a warranty-ensuring manufacturer.
For a consumer to secure the warranty they purchase, Sanders said they may not want to buy from their installer or manufacturer (if not backed by a third party), as this could leave the resident losing the warranty they paid for if both entities end up bankrupt.
Solar Insure recently launched SolarDetect, a new monitoring and warranty software for “abandoned consumers” who lose their contracts with companies that go out of business. Solar Insure provides an annual contract to residents to monitor any issues, fix any problems and service their systems.
Sanders recommended checking to see if the installation company is licensed by the Texas Department of Licensing and Regulation and if the business uses licensed electricians for installations and any maintenance as legally required in Texas.
If a business is not abiding by these regulations, consumers should file a complaint with the state licensing agency or the Office of the Texas Attorney General. Residents could also contact the state consumer protection office or the Better Business Bureau to report faulty or deceptive business practices.
Sanders said a lawsuit is also always a viable option and could be brought against an individual owner of a company if the business files for bankruptcy. However, legal action does add up in expenses, and the client would have to prove that the company or owner acted intentionally or negligently.
For financial-related issues with lenders, consumers should file a claim with the lender directly or with a credit card issuer to have payments canceled or refunded. Sanders recommends that consumers retain experienced counsel to review contracts before moving forward on a solar system project.
“A client should make sure that any contract it executes with a lender offers protections for the client in the case of installers who go out of business (or declare bankruptcy) or never follow through on the installer’s original obligations,” he said. “It is vitally important.”
According to Jones-Albertus , consumers should look at the interest rate and the loan fees. If they choose to lease, they should look at the conditions of the contract and what financial commitments are required if residents want to buy the system when the lease is up.
Jones-Albertus added that she suggests consumers get multiple bids and compare them. Educational resources also walk residents through the contract review process on the U.S. Department of Energy, Solar Energy Industries Association and EnergySage websites.
Solar United Neighbors launched the Solar Help Desk last year, an online forum that assists residents in all stages of the solar transition process, from initial roof assessments to comparing multiple contract offers.
According to Ben Delman, senior director of communications for Solar United Neighbors, the help desk has assisted thousands of consumers since it was first made available online.
“There’s a lot of great examples of people who are very happy with how their solar installation went through that process and the money they’re saving down the road,” Jones-Albertus said. “That’s one of the reasons why it can be so valuable to talk to neighbors and others in your community about their experiences and to work with a company that others have had really good experiences with.”
Moving Forward
Camille and Charles still face uncertainty about what comes next with their payments. According to the TriSMART technician, the earliest they could expect their system to operate could be between one and six months due to needed repairs and the permitting process.
When they initially signed the contract with Vision Solar in August 2022, they agreed to pay off the $60,000 loan by roughly $200 monthly in payments over a 20-year window. The installation company also told them the total amount could decrease with the federal government tax credit and other incentives they qualified for.
Camille worries that if the monthly payments increase or they incur additional costs not expected while finally completing the installation and getting their system operating, they will be unable to afford it.
“When you take a retired couple on a fixed income, they’re looking at what it will cost me every month?” Charles said. “And can I outlive the total number of payments, or can I afford the total number of payments until I’m not here anymore?”
“It’s just a big mess,” Camille added.
This article appears in Jan 1 – Dec 31, 2024.
