A tale of solar fraud and a maturing industry

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Selecting a trustworthy contractor is a challenge for any home improvement project, including installing solar panels. And as the solar market grows, regulators are likely to spend more time refereeing disputes and policing service providers. Here’s an unusual case, which one day could become more common: The California Public Utilities Commission voted on Thursday to deny a solar company’s petition to be allowed back into the state incentive program after finding fraudulent signatures on a rebate application the company submitted.

The commission sided with the decision by a program administrator that banned Pacific Home Remodeling from participating in the California Solar Incentive (CSI) program after finding forged signatures on an application for a homeowner. A data analysis ran by the administrator also showed that Pacific Home charged way more money than other installers statewide: $14.03 per watt from Pacific Home versus $8.82 per watt elsewhere. At the same time, the average energy offset achieved by the solar electric systems sold by Pacific Home is “substantially lower, only 46.38 percent, when compared with the 70.83 percent of consumption offset by systems installed by all other contractors” in the territory of San Diego Gas & Electric.

The case is a good cautionary tale that the regulators are using their filters to sniff out poor business practices and to protect consumers. California regulators and solar industry folks have talked about the importance of consumer protection; it was a subject of a panel discussion at a conference by industry organization SolarTech in Silicon Valley last March. Back in 2010, CSI administrators added a rule that required installers to justify their prices if their charges are way above the norm.

Rooting out unscrupulous installers not only helps consumers but also the solar industry in general. Showing the public that there are processes in place to help people find credible installers is a necessary part of a mature, established industry.

Case of Pacific Home

The case with Pacific Home, which does business in the San Diego and Los Angeles areas, started in late 2010 with missing signatures on the warrant, energy audit and other documents that were necessary to complete an incentive application. CSI’s administrator for the San Diego region, California Center for Sustainable Energy (CCSE), contacted Pacific Home, the subcontractor that handled the installation — McWire Electric — and the homeowner. There was a deadline to complete the application, and right before the deadline, California Center received the documents that turned out to bear signatures that looked quite different from the signature in the completed portion of the application.

That discovery kicked off an investigation and hearings, and neither Pacific Home nor McWire Electric could say who handled the documents with the forged signatures. The homeowner told California Center that he didn’t sign those newly submitted documents. California Center notified Pacific Home in Nov. 2010 that the company could no longer participate in CSI. Pacific Home then appealed the decision that prompted the utilities commission to take a look and vote on yesterday.

The case had some interesting twists. While California Center was investigating the forged signatures, the homeowner in question was unhappy with the installation because he believed it wasn’t sized correctly and was not producing as much energy as he had expected. He complained to Pacific Home and McWire and received additional panels for free. After that, he wrote a letter that retracted what he said about the forged signatures, and Pacific Home and McWire presented that letter as evidence that they didn’t commit fraud.

“When initially confronted with the facts, (Pacific Home) made no effort to investigate … To this day, it refuses to admit that any wrongdoing even occurred,” according to a statement from CCSE, the program administrator for the San Diego region, that it filed last September. At the end, Pacific Home wasn’t able to explain the different signature styles in the same application, and the utilities commission said in a document that it agreed with the decision to kick Pacific Home out of the CSI.

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