In a Solar Power International session focused on the top 10 financing mistakes, Seth Weissman, who is responsible for SolarCity’s legal affairs, spoke to a capacity crowd about the mistakes contractors make in residential solar financing.
He offered the following tips (and noted they have no particular order):
- Contracts should be in plain English. “If you can’t talk about the contract at the kitchen table, it’s broken,” Weissman said. “You have to develop relationships at the table.”
- Submit a UCC-1 filing, also known as a fixture filing. “Your fireplace is a fixture. Your oven is a fixture. A solar system is probably not a fixture. So why file a UCC? So if you lose the house, the system will always be yours.” Also, he said, make sure the customer knows it’s not a lien on their home.
- Nothing scares customers more than the unknown when it comes to their roofs. “The warrany should be totally clear to the customer.” It should include items on removing the system and restoring the roof.
- Since the 2011 ruling of ATT Mobility vs. Concepcion, which permits contracts to exclude class action arbitration, businesses must be very careful about applying the law. “You can thank the conservative wing of the Supreme Court for this.”
- Every contractor must be licensed. If one enters into an agreement without a license, a customer can recover all compensation paid to the contractor and keep the solar system – the contractor may also face criminal charges. “Everyone in this space should have counsel.”
- Use the actual price or formula in a pricing schedule, not just “minimum price.” You cannot have “0” in a schedule. “It gives consumer watchdogs and lawyers an easy in.”
- If an offer is not written in the contract, it is not part of the deal – but such an explanation doesn’t go over well with the BBB, state licensing board or Yelp. “Don’t let the sales team promise anything not in writing. Although it’s not legally binding, try telling that to Yelp.”
- Contractors must have qualified counsel when it comes to Regulation M. “I’ve got news for you: This wasn’t built for solar.” In a lease you may not have a fair-market buyout. The price must actually be stated or do not offer it.
- Be careful about “green-washing” in advertising. General FTC rules apply, as well as state rules. Consumer leasing also has advertising requirements when payments are mentioned.
- Always anticipate changes in contract. “I can promise the majority of your contracts will change and you need to build a process for changing git from both sides. Without that, you’re asking for an unhappy customer.”
Tell Us What You Think!