As more South Carolina homeowners turn to solar energy, state officials are working to resolve disputes between customers and renewable energy companies.
New renewable energy regulations from the S.C. Office of Regulatory Staff and Department of Consumer Affairs went into effect on May 28. While technical, the regulations have one overarching goal: help homeowners advocate for themselves in transactions for the leasing or buying of renewable energy, namely solar panels.
The new regulations were created and approved by the two government bodies to address complaints from homeowners who felt they didn’t know what they were getting into when they decide to purchase or lease solar.
The Office of Regulatory Staff, which oversees the leasing of renewable energy, has had 36 complaints since 2014, when the state started regulating solar leasing. The Consumer Affairs Department, which regulates the sales of renewable energy, received around 230 complaints in that time.
“It has emerged that there are some customer protections that are needed both on the way that solar leasing companies market to their customers — the types of promises they make them — and then how customers who are dissatisfied … can remedy their dissatisfaction,” said Dawn Hipp, chief operating officer at the Office of Regulatory Staff.
Until May 28, government officials had been operating informally to address the solar complaints, Hipp said. Most of those complaints involved homeowners who were unaware of how much solar energy would cost them and expected better returns on their investments.
In other instances, homeowners found themselves waiting weeks or months to hear back from solar companies after they paid for the panels to be installed. There were also cases of elderly people signing 30-year contracts without being aware of how much it would cost them.
“The goal of these regulations, in part, was to make sure that customers have all of the relevant information to make a decision and, if they did not, then they would have a remedy,” said Ronald Aiken, spokesman for the Office of Regulatory Staff.
Addressing the complaints
Government officials hope the new regulations will help resolve some of the complaints while empowering consumers.
In 2019, the S.C. Energy Freedom Act directed Office of Regulatory Staff and Consumer Affairs Department to work together to create the new rules.
Under the regulations, solar leasing and installation companies are required to provide a set of disclosures so consumers are aware of their responsibilities when it comes to owning or leasing renewable energy.
As part of the disclosure requirement, the companies must provide a marketing pamphlet to consumers who are interested in using solar at the beginning of the process. They then have to provide another set of disclosures before any contracts are signed, Consumer Affairs Administrator Carri Grube Lybarker said.
“If the salesperson makes certain statements — if they talk about savings — they have to also give a full list of disclosures and make that a fuller statement so the consumer has all the information,” she said.
The new regulations also set up a formalized complaint process to prevent businesses from taking advantage of consumers, which in turn gives businesses a baseline for operations, Hipp said.
“It formalizes a lot of the practices we had already been doing with these leasing companies,” she said. “There are no surprises for them.”
A solar boom
The rise in complaints against solar energy companies can be tied to growing pains as renewable energy becomes more popular.
Solar energy leasing in South Carolina has only been legal since 2014. In that year, there were about 580 installations of solar panels for lease in the state, according to data from the Office of Regulatory Staff. Since then, popularity in solar energy has skyrocketed to over 25,500 installations in 2020.
The state does not have data on the number of homes that have purchased solar panels instead of leasing them, as those transactions don’t require a licensing process. Solar energy installers like Kasey Harwell, who owns Raywell Solar in Charleston, have seen the number of new contracts grow each year.
“It’s becoming more mainstream,” Harwell said. “A clear example of that are some of the new tract homes that are being built are including solar on every home.”
Although the new regulations help protect consumers and hold businesses accountable, they don’t take away some of the challenges that come with moving to solar.
One of the major challenges is responding to changing utility rates, Harwell said.
“It used to be all solar was worth 12 cents per kilowatt hour,” he said. “Now, you can get discounted rates if you sell it back to the utility. So the calculations from our standpoint … got a lot more difficult with utility changes.”
In an effort to follow the new rules and be on top of changes to utility rate schedules, Harwell said he and other companies have to invest in more advanced sales software.
Despite the frustrations that can come with the changing landscape of solar sales, Harwell said, he’s in support of the regulations that will ultimately prevent a culture of pushing sales without disclosing important information for the consumer.