When the consumer advocacy group Public Citizen, recently criticized the rooftop solar giant SolarCity, for forcing its customers to sign contracts containing arbitration clauses, it raised a lot of eyebrows. This is because SolarCity, owned by entrepreneur Elon Musk, was not the typical recipient of ire from the group started by progressive icon Ralph Nader. Musk has accumulated a lot of support from progressives over the years for his efforts to build environmentally friendly businesses including SolarCity and also Tesla, an electric car company.

Public Citizen took this action against SolarCity, because consumer advocates object to the preponderance of businesses that force their customers into contracts that mandate arbitration to settle disputes. These “rip-off clauses” -- as described by Public Citizen -- put consumers at a disadvantage in a disagreement, because the arbitration process is skewed in favor of the corporation.

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Across the United States, leading law enforcement officials have issued warning to consumers about bad practices within the rooftop solar industry. In Vermont, the Attorney General’s office even warned solar companies that they may not advertise their products as “solar,” “renewable,” or even “clean,” because the solar companies sold the credits generated by the production back to utility companies.

Much of the scrutiny around the rooftop solar industry stems from sales representatives misleading potential customers. Salespeople have been reported to deceive consumers into believing they qualify for government loans, to reduce the cost of installation, which can easily cost over $10,000 or $20,000 depending on the size of the house.  Salespeople may also exaggerate savings generated by customers using electricity from their solar panels and selling electricity back to the utility company. Once you add in the cost of the panels, savings realized from the solar panels can be wiped away.

In much of my home state of Michigan, housing prices have not recovered from the mortgage crisis. Yet, when Michiganders add solar panels on their homes, they risk limiting their access to home equity lines of credit and lowering the actual value of their dwelling. This is because the cost of the solar panels is essentially a lien on the home that can last over a decade.

Members of Congress, both Democrats and Republicans, have also written letters to federal regulatory agencies including the Federal Trade Commission (FTC) and the Consumer Financial Protection Bureau.  This summer, the FTC signaled that it was going to pay closer attention to the rooftop solar industry and held a public-workshop. Earlier this year, The FTC, in coordination with the Department of Justice brought a federal court action to stop a telemarketing operation that allegedly made illegal robocalls promising consumers energy savings, in an effort to generate leads to sell to solar panel installation companies.

In my time as Chairman of the Subcommittee on Oversight and Investigations, I looked at multiple businesses that had identified government subsidies and found ways to generate massive profits by unfairly manipulating both the subsidies and the public. Typically, these government-backed incentives were efforts by legislators to improve society, such as incentivizing homeowners to use solar power to slow global warming. Unfortunately, the solar industry seems to be following in the footsteps of other industries that take advantage of government subsidies to cheat consumers.

Importantly, residential rooftops are not the only way to utilize solar panels, they are just the fastest way to deploy, and unfortunately are the mode that is the most susceptible to “snake oil" sales tactics. The solar industry has been extremely successful in utilizing landfills, abandoned mines and other excess unusable land for large-scale production of much needed renewable energy. New joint ventures with existing power utilities to deploy community solar farms also hold great promise for distributed power generation. These alternatives take longer to come to fruition and require a higher degree of planning, but will need to become a bigger part of the solar industry’s focus.

If I were advising the solar industry, I would urge them to quickly clean up their act. I would also counsel them to move quickly to utilize other modes of implementation that are not as prone to abuse. If not, scrutiny will undoubtedly increase from regulators at the federal and state levels. When someone puts solar panels on their home, it is a commitment to improve the health of the planet. People should feel good about that decision, not like they have been duped into a bad investment.

Bart Stupak represented Michigan's 1st District from 1993 to 2011


The views expressed by authors are their own and not the views of The Hill.