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AND GOVEANMENT REFOFM

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December 12, 2014
The Honorable Edilh Ramirez

Chairwoman
U-S. Federal Tmde Cornmission
600 Pennsylvania Avenue, NW

WashinSton, DC 20580
Dea[ Chairwoman Ramirez:
Given the rapid expansion ofthe rooftop solar industly, we wish to call your altelltion to the e ergence of
third-party leases for rcoliop solar systems. sorne ofthese compsnies lhat mafkel leased solar systems to
consumerc as a way to leverage promotilg soiar leasi g products are actually acting as selle$ offinancial
products, levemgingthe fed€ral lnvestmell Tax Credit (lTC) and applicable state renewable subsidies lo

obtaiI tax equity investment for th€ puq)oses of tumilg a prcfit. Under incleasing pressure from Wall
street to sign up morc leosing customeN b€fore the ITC expires, these companies are reported to be usinS
potentially deceptive sales tactics - practices that, iftrue, merit investigation
By way ofbackground, lhe rooftop solar ma*et has surged ill r€cent years This su[8e is, in part, dlle to
r.egulatory subsidies and the i lcl€ased use ofthird-party leasirrg anangements in rcsidential roofiop solar
iDstallations. Consulners are treing enticed by solar leasing companies who offer zero_rnoney_down
leases, essentially le3s€r'rates, for a 20 year lease agreement llduslry analysts predict that a vast majority

of rooftop solff installations acrcss the nation will be Ii[anced through long_tenn, third_party leases in
2014. oie of the laryest solar. leasing conrpanies, has a stated goal ofconrmittirrg one million c[stomers
to long{erm contracts by 2018. Asa vety rcw industry with a limited track record and little regulatory
oversight, the solar leasing lrarket may pose a considerable risk to the increasingly large numbers of
American consumers thal cotntDit to the leasing product without all ofthe relevant infolnation (not to
mention the Amcrican taxpayer, who h€avily subsidizes each looftop solar pmject).
Ofpadicular concem, is the possibility that these third pany leasing companies may be utilizing deceptive
marketing stmteSies that ovcrstate the savings the homeownel will receiv€, while understating the risks
associated with agreeing to a decadeslong lease lhat is often secured by a second deed oftrust to the
house a financial cotnmitment that will likely exce€d both the life ofthe rcofand duration ofthe
l€ssor''s home ownership. Nalionalsoiar leas ing cornpa n ies have aggressive'y marketed lhe zero_moneydown leases to homcowners in select states. lll fact, one ofthe largesl solar leasing companies has

psnnered with a stmtegic soles conpany that sold large numbers ofsubprime mortgages to nsuspecting
horieowners in the rur Lrp to the subprime mo,lgage crisis-r Class action lawsuits have been filed in

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ENns{r's

 California and l,ouisiana by homcorvners alleging fiaudr ent marketiD8 and overststirlg potenti{ $virlgs
f.om zero-money-down leases.2 Irr addition, nurnerous rcports have found that holrleownerc who have
signed these zero-rnoney'down leases arc struggliig to selltheir homes, indicating that they were not

fully aware ofthe ter.rns oltheir 20-30 year lease commitments.3
Consumer plotection and fairness requirc a clear explanatior ofpossible risks. Fai less also requhes
acclralc factual assumptiors when prcsenting the options to cons[mels. As it stands, solar collsum€rs ar€
likoly not aware ofthese risks. AkeycoDcern is tlEt ifthcse leases arc not offered in good faith orwith
accurate disclosures, tho entire solar industry could be tairled.
Therefore, we ask that you respond to the following questions:

1.

What options exist to ensurc consumers are fully apprised ofthe costs and bencfits ofsolar
leasing affangements, iDchding potential financial risks? At a minimum there appeaB to exist a
negd foL a rcsourcc ccnter for consumers to weiglr risks before rnakirrg a financial commitlnent.

2. L the rnlikely

evenl ofa company or lrarket faihrc, what recource gxisb for the erd coDsumer to
be held llalmless for the lenninderofthe lease? Alter the teccnt ho siig crisis itsccmsonly
roasolable for consrnnels to know theil recorrse should they need one.

3.

What level ofcoordioalion and infonnation-sharing does the Commission have with state-level
consumer protectior oflices with othq similar type fioaDcial services?

4.

What options exist to ensure that consurners are fully apprised ofthe costs and benefils ofsolar
leasing Aralrgements, inchrding potential fmancial risks?

5.

Has the ComDission received any colnplaints pertairing to solar lease conhacts? Have any of
these conlplaints involved the rtse ofpotertially elroneous infonnation by matketing personnel to
increase the aftractiveness ofsolar leas€s?

Tllank you for yotll attention to the issues raiscd by this letter; we look forward toyour timely response.
As always, we ask that this inatter be handled iD strict accordance with the existing agency Nles,

JeffSnall at

regulations, and ethical guidelines. Should you lleed have arry queslions please contact
Jcfl lSnrall@nrail.house.eov

Sincercly,

I

A. Gosar, D.D.S.

Trcnt I:

Lamar Smith
Mernber of Congress

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