Deceptive marketing of community solar projects could taint the nascent industry in Illinois and beyond.
Illinois is about to see a community solar boom, and advocates want customers to know what they’re getting into before signing up.
As solar developers prepare to market subscriptions to customers under two major statewide initiatives, program administrators and consumer groups are taking precautions to make sure outreach is clear and to avoid potential scams. Illinois in recent years has cracked down on alternative retail electric suppliers for deceptive marketing schemes that often target low-income and minority customers. Administrators hope to prevent that from happening with solar.
A total of 112 community solar projects across the state, with an additional 807 waitlisted, were selected in the lottery for the Adjustable Block Program, one of two solar incentive programs outlined in the Future Energy Jobs Act. The other program, Solar for All, aims to ensure these projects reach low-income and environmental justice communities. Project submissions for Solar for All will be accepted starting in mid-May.
The new projects will expand Illinois’ community solar industry considerably, meaning exponential growth in the number of potential customers.
An alternative retail electric supplier contract, in which a customer purchases electricity through a company other than one of the state’s regulated utilities, might last one or two years. A community solar subscription, however, could last 10 or 15 years, said Illinois Power Agency Director Anthony Star. “This is not just a small transaction,” he said. It’s vital for customers to know what they’re subscribing to.
The power agency in January released final marketing guidelines for developers under the Adjustable Block Program. Notably, in addition to the contract, developers must provide a disclosure form for customers to sign acknowledging they understand their agreement. The agency provides a sample of the seven-page form on its website, and developers are required to upload the signed copy for each customer.
“The disclosure form is a good thing,” said Jim Chilsen, communications director for Citizens Utility Board, a consumer advocacy group that advises customers on renewable energy and bill-savings opportunities. It’s clear enough that it should be helpful for customers, he said, adding that the guidelines as a whole are strong.
But experience with the alternative electric supplier market has proved that strong protections are only half of what’s needed, he said. Now it will be up to state regulators and consumer groups to ensure developers follow them.
The most important thing community solar program administrators can do is work with the industry, said Dan Whitten, vice president of public affairs for the Solar Energy Industries Association. SEIA provided input on the Adjustable Block Program guidelines.
“Our members include many of the largest developers, so flagging issues for us will help us get the word out to our members about items to watch out for,” Whitten wrote in an email. “At the same time, if administrators have a question about certain business practices, it’s worthwhile for them to discuss them with industry so that they have a better understanding of the solar industry’s products and services.”
It’s not clear yet how developers will reach customers to sell subscriptions. Door-to-door outreach seems likely, similar to alternative electric suppliers and rooftop solar companies. Developers may also use online advertising, as well as phone calls and direct mail.
Many companies sponsoring projects are based outside Illinois and may partner with local subscriber management or marketing firms to reach customers, said Vito Greco, associate director of solar programs at Elevate Energy.
“The best outcome will be that these regional or national firms develop meaningful partnerships with local firms for community engagement, each benefiting from and adapting their offer and communications accordingly,” Greco wrote in an email. “An unwelcome outcome will be that these large, out-of-state firms try to insert their existing offers and communications into Illinois with little adaptation, creating confusion and slowing the market.”
Wisconsin-based SunVest Solar has 10 projects planned. The company intends to work with subscriber acquisition firms for customer outreach, Timothy Polz, a senior vice president at the company, wrote in an email. “These service providers have developed user-friendly online platforms that streamline the onboarding process and make it easier for all that are involved,” he said. “Whatever provider is selected will be required to strictly observe the marketing guidelines and disclosure [form] requirements outlined in the program rules.”
Customers sometimes report aggressive marketing by rooftop solar program representatives, said Christina Uzzo, Citizens Utility Board’s environmental outreach coordinator. That will be something to watch out for as community solar marketing ramps up. Citizens Utility Board hosts live outreach events and has online solar resources, which Uzzo and Chilsen anticipate will expand in the future.
Still, they added, it will take a joint effort from many groups to ensure fair marketing. “We can’t intercept every single person that has someone come to their door” to sell them a project, Uzzo said.
To help customers decide on their best options, several consumer groups have partnered on a website, called Solar in the Community, where developers will be able to post and propose projects, and customers will be able to search for and compare projects. Sites like this could be useful for customers, and hopefully more will be launched in the future, Chilsen said.
Manipulative marketing in Illinois “can really sour the reputation of community solar,” said Sam Garcia, a research fellow at the Natural Resources Defense Council. Given how nascent the industry is, that could have national repercussions, he added.
Low-income and environmental justice communities have historically been targeted for scams, Garcia said. This is important to take into account for the Solar for All program.
The agencies overseeing Solar for All are “very clear that this is something they’re aware of and committed to getting right,” he said. The focus should be on “shaping and refining the specific approach,” especially in three areas.
First of all, to remove barriers to access, marketing materials should be concise and culturally sensitive, including being bilingual when necessary, Garcia said. Second, guidelines should ensure that customers have appropriate financial protections to avoid scams. And finally, privacy must be prioritized by keeping customer information private and deleting it on a timely basis once the contract ends.
Each of these factors is addressed in some way in the Adjustable Block Program guidelines. Given past experience with the communities intended to benefit from Solar for All, “there’s an even more pressing need” to make sure these guidelines protect them adequately, Garcia said.
Star, at the Illinois Power Agency, noted that the Future Energy Jobs Act isn’t clear on how to correctly compensate alternative retail electric supplier customers for the net metering credits they earn from their community solar subscriptions. For example, if the alternative supplier reports that the customer’s credits are worth $10 one month, the customer may not know how the supplier calculated that. Recently introduced legislation seeks to remedy this issue, he added.
“I think that it is fair to learn from the lessons of the alternative supplier landscape that we had in Illinois and some of the bad deals that consumers have gotten saddled with, because it’s really important that we get community solar right,” said Christie Hicks, a senior attorney with the Environmental Defense Fund, which worked on the Solar in the Community website.
Community solar could bring savings and economic opportunity to underserved communities, especially when the projects are sited within those communities, Hicks said. “If anything, I’m optimistic,” she added. “There’s been a real recognition to want to do this as well as possible. I think that’s reflected in the consumer protections.”