With the home solar panel industry and the electric utility industry at war, you might expect a liberal Democratic congresswoman from New York City to support the solar side. But that’s not what happened recently when Rep. Yvette Clarke decided to wade into this fight. Instead, she signed her name to a letter apparently written by utility lobbyists that warns about the risk of solar companies duping consumers.
The Federal Trade Commission (FTC) is holding a workshop on June 21 to learn about the booming rooftop solar market and how it’s affecting consumers. There are concerns on both pro- and anti-solar sides: The solar industry is hoping that the FTC will look into what they consider to be anti-competitive practices by the electric utility industry, intended to stymie the growth of solar. The utilities hope to prod the FTC to investigate allegedly unscrupulous solar companies, in the name of protecting consumers.
The FTC is inviting comment ahead of its workshop. Clarke sent a letter to the FTC commissioners expressing concern that consumers could be misled and ripped off by solar-panel installation companies. Clarke’s office also circulated the letter to other congressional offices seeking supporting signatures, according to solar industry sources.
But it appears that Clarke and her staff didn’t write the letter; utility industry reps did. Grist has obtained the letter that Clarke’s office distributed to other members of Congress, and the metadata on the Microsoft Word document show it was created by Eric Grey, director of governmental relations at the Edison Electric Institute, the trade association representing investor-owned electric utility companies. The last person to save changes to the document was Vincent Barnes, a lobbyist for Gray Global Advisors, which has EEI as a client. The letter makes no reference to EEI’s role in its creation.
Clarke’s office did not respond to a request for comment from Grist, nor did Gray Global Advisors. EEI responded to our query with the same vague statement it gave to Politico, which first reported on the existence of the letter last week for its subscription-only Pro service. “We are providing information to policymakers seeking feedback on the important issues raised by the workshop,” wrote EEI spokesperson Jeff Ostermayer in an email.
The letter does not address any of the issues on which EEI is directly butting heads with the solar industry, such as net metering, a policy in place in most states that lets customers with solar panels essentially sell excess power they produce to their local utility at the retail rate. Rather, the letter expresses concerns that consumers may be taken advantage of by companies offering to lease solar panels and not disclosing the financial risks. “No-money-down solar leases are being aggressively marketed to homeowners,” the letter complains. “Too many times the marketing misleads customers.”
Tyson Slocum, director of the energy program at Public Citizen, an actual consumer advocacy group, says EEI isn’t really looking out for regular folks. “Nothing gets us more upset than when EEI or another industry trade group says they are acting on behalf of consumers,” he says. “They are not. They are acting first and foremost in the interest of their shareholders.”
What is the utility industry up to?
Until relatively recently, solar panels were expensive and, like most things, had to be bought up front. That’s changed over the last few years as companies such as SolarCity and Sunrun started offering solar leases, which allow people to get solar panels on their roofs without having to buy them. These leases are intended to be profitable for the homeowner because the money they save on their monthly electric bill is supposed to be greater than their monthly lease payment.
But EEI, its member utilities, Koch-backed groups, and their corporate and conservative allies have been lobbying states, sometimes successfully, to eliminate net metering or otherwise reduce the financial incentives for clean home power generation. When they succeed, people with solar leases could end up with less in savings on their electricity bill than the cost of renting their solar array.
EEI’s letter feigns concern for these consumers — an impressively cynical maneuver, as it’s the very group leading the push to raise those consumer costs. EEI argues that solar companies should be required to apprise potential customers that their state may abandon net metering or make other regulatory changes, such as eliminating clean energy tax incentives.
What EEI is actually trying to do is protect utility companies from a form of competition. “If the rooftop solar industry expands, that takes away from the bottom line of utility companies,” says Andrew Newbold, public policy manager for Sunrun. “[EEI] is just trying to throw everything they can and see what sticks in terms of arguments against solar to crush the competition.” Says Bryan Miller, president of the Alliance for Solar Choice, a trade group for rooftop solar companies, “It would be like Budweiser complaining about Coors and running to the federal government and saying, ‘Don’t let people drink Coors.’”
Just because EEI’s motives are selfish doesn’t mean that all of its arguments are totally bogus. Solar consumers should be apprised of the possibility that the regulatory environment in their state may change and that their savings from using solar power could be reduced. But EEI is exaggerating when it claims in its letter that there has been “a dramatic increase in consumer complaints about abusive or deceptive acts and practices in solar sales, marketing, and financing.” According to Slocum, “There is not yet a super-serious issue that people are being taken advantage of [by solar companies]. There are some unscrupulous third-party actors that state attorneys general have looked into. The market leaders — the SolarCitys, the Sunruns — we have not seen complaints about their contract terms and arrangements. But this market is going to grow very rapidly. Any time a market experiences a lot of growth, you’re going to see a lot of new players enter. There is a legitimate threat of unscrupulous players entering.”
The solar industry, naturally, doesn’t think additional regulation is needed for consumer protection and argues that it could stifle solar’s growth. “Every state has consumer protection laws,” says Tom Kimbis, acting president of the Solar Energy Industries Alliance. “We see a well-intended but unfortunate knee-jerk reaction from some regulators to propose a solar-specific consumer protection law that is completely redundant with what is already on the books.”
Why is a progressive representative siding with utilities?
It’s unclear why Clarke decided to weigh in on this issue by spouting the utility industry’s line. She has a generally pro-environment voting record and no major campaign contributions from EEI or its member companies.
One clue might come from Brentin Mock’s reporting in Grist in 2014 on the relationship between electric utilities and the Congressional Black Caucus, of which Clarke is a member. EEI has tried to bring African-American leaders to its side by arguing that the people getting solar panels are relatively affluent — homeowners, for example, instead of renters — and that net metering forces utilities to raise rates on everyone else to make up for the lost revenue. Some black lawmakers and organizations have been persuaded by that argument. In 2014, EEI copied anti–net metering language almost verbatim from the right-wing American Legislative Exchange Council and submitted it to the the National Policy Alliance (NPA), a coalition of African-American politicians, including the Congressional Black Caucus, and NPA adopted the resolution.
But communities of color are the ones hurt most by the air pollution from coal-fired power plants and threatened most by climate change. And these leasing arrangements are making solar affordable to people with less money than in the days when you had to shell out thousands of dollars for a solar array and recoup the cost over years. So the environmentally just solution is to expand solar access further down the income scale with things like community solar projects that allow for collective ownership. Ultimately, it might be necessary to slightly reduce the rate that utilities pay homeowners for the solar power they produce, in order to avoid putting utilities out of business. But just trying to quash rooftop solar is not in the long-term interest of anyone who wants to breathe clean air and avoid catastrophic climate change.
The solar resolution adopted by the NPA is out of step with the policy preferences of most African-Americans, who are overwhelmingly pro–clean energy. As Mock reported, “The Joint Center for Politics and Economic Studies put out a report in 2010 that found solid majorities of black people in South Carolina, Arkansas, Indiana, and Missouri said they were willing to pay $10 extra on their electric bills to fight global warming.” NPA also adopted a resolution opposing Obama’s Clean Power Plan even though African-Americans overwhelmingly support it.
There’s a legitimate debate to be had about how best to integrate rooftop solar into our existing grid without undermining electric utilities, which we still need. But EEI isn’t helping to foster that debate.
Instead, the group is sneakily trying to get other people to make disingenuous arguments on its behalf. EEI’s letter argues that solar leases marketed with misleading claims of being “free” are similar to sub-prime mortgage loans. That’s an overstatement, especially in terms of the size of the financial risk involved, but it’s not inherently wrong for the FTC to consider whether we need rules to ensure transparency in solar lease advertising. But if transparency is a value the utility industry believes in, then it shouldn’t disguise itself as a member of Congress.
