SolarCity Clouds Savings Claims

UPDATE 12/10/15: SolarCity now claims on its website that “utility rates have been increasing over time.” The company had previously stated that “rates have increased over 5 percent every year.” Our original ad alert follows.

SolarCity cannot guarantee that a homeowner will save on electricity costs by leasing one of its home solar systems — despite claims on the company’s website suggesting it can.

One claim on the page for SolarCity’s SolarPPA leasing option states:

With SolarCity’s SolarPPA (power purchase agreement) you simply pay for your solar power by the month, just like your utility bill, only lower.

States another section of the same page:

Your savings can grow over time as utility rates continue to increase. Historically, utility rates have increased over 5 percent every year. With a SolarPPA, you can lock in lower electricity rates for the term of your contract.

The phrase “as utility rates continue to increase” can reasonably be interpreted as a prediction on future utility rates. But those rates are unpredictable. And SolarCity admits this.

“Utilities will not tell you what their rates are going to do,” said SolarCity spokesman Jonathan Bass.

A customer’s actual future savings are also dependent upon other factors like future electricity consumption, which SolarCity also cannot predict, Bass told TINA.org in an interview.

And that annual 5 percent utility rate increase figure used in SolarCity marketing? The company says it’s “certainly true in some cases” but also notes it relates to some specific areas of the U.S. that SolarCity serves and not the country as a whole.

In fact, the only thing SolarCity says is a safe bet is the rate you will pay for the solar lease for the next 20 or so years because the monthly payments are locked in for the duration of the leasing period.

“Our sales proposals are very clear that we do not guarantee the estimated savings to the customers, and we seek to explain this to the customers during the sales process,” Bass said.

Maybe SolarCity should explain that during the web surfing process as well.

For more of our coverage on solar leasing companies, which have come under recent scrutiny by federal lawmakers, click here.