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Solar Leasing Company Versus PACE: Solar Industry Shooting Itself in the Foot?


The frontal assault on Property Assessed Clean Energy (PACE) caught many observers, and especially many cities, by surprise. What was even more surprising was the source of some of the attacks: the solar industry itself. One solar leasing and financing company claimed that it acted in the defense of homeowners, but there are definitely some skeptics out there.  Mike Stark writes on the HuffingtonPost that "the the utility and coal lobbies had received cover from a solar finance company, SunRun, described by an industry source as a ‘rogue' player in the otherwise tightly knit solar industry."

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Now that Congress is proposing legislation to fix some of the problems with PACE, accusations are flying fast and furious. Greentechmedia reports in an article entitled "SunRun Solar Versus PACE Program Efficiency" that the conflict has "pitted elements within the solar industry against each other...[B]oth sides said they really didn't want a fight-but the argument continues." According to the report, an organization trying to save PACE accused SunRun of offering an amendment to the proposed legislation that would "significantly delay[] movement on PACE until the laborious and uncertain effort of amending state law is undergone" or possibly "block[] PACE permanently."

SunRun responded that it "supports consumer choice and knows including third-party owners in PACE can reduce loan and lien amounts by more than 30 percent for the same solar facility, while providing reduced risk and greater customer service for homeowners." But, SunRun concluded that "we will withdraw this proposed amendment because industry infighting over proper PACE strategy has become a distraction to operating our business and delivering on our mission."

And PACE is not the only source of tension within the solar industry. The Wall Street Journal reports that an "uneven distribution of federal solar subsidies has stirred up a dispute between companies that sell the systems and those that lease them to customers, with the former group alleging overcharging by the leasing companies, which vehemently reject that claim." The government has "been grappling with how to value third-party solar systems, and has been sued for holding back subsidies as it tries to figure it out." The Treasury pays out grants based on the valuation of the system, and third-party solar system have been averaging 25% above similar direct-sale systems, according to a source quoted in the article.

As Obama has pledged to reintroduce important pieces of his energy legislation after the mid-term elections, iInfighting within the solar industry may be just the gift that opponents of alternative energy have been waiting for.