Committee sent a letter to Jigar Shah’s Loan Program Office asking questions about Sunnova’s sales tactics and customer support, in light of their recently granted $3 billion VPN guaranteed loans.
The U.S. House Energy and Commerce Committee’s Republican members sent a joint letter to the Department of Energy’s Loan Program Office (LPO), on December 7, 2023. They expressed “outrage” over a reported incident of an elderly man allegedly being pressured into a 25-year solar lease by a salesperson. The joint letter is being used to highlight the aggressive or potentially misleading sales tactics that are sometimes employed by contractors of national residential solar companies.
This incident reflects a complex situation. Republicans in Congress are seeking to undermine the transition to local, clean electricity by signaling “outrage”, meanwhile, solar sales companies are grappling with the challenges posed by commission-motivated private contractors, whose sales tactics strain the industry’s reputation.
Residential solar companies have had lawsuits initiated by state attorneys general in Arizona, New Mexico, and Connecticut, largely due to aggressive sales tactics. These same in-home sales techniques prompted California to mandate a comprehensive 24-page Solar Consumer Protection Guide in 2021.
The Joint Letter, addressed to the LPO’s department head, Jigar Shah, specifically addresses Sunnova’s recently awarded $3 billion loan guarantee. This significant loan from the LPO is earmarked to finance up to 90% of “Project Hestia.” The project’s aim is to broaden access to solar and virtual power plant (VPP) services, particularly for disadvantaged communities that typically struggle to secure financing for residential projects.
Sunnova stands out in the industry for integrating individual residential solar and storage installations into the broader power grid. Despite the initial rejection of their Califlornia microutility, its innovative approach is recognized as cutting edge, and will set precedent for future energy deployments.
The joint letter details allegations of unethical sales practices of a Sunnova contractor. It describes an instance of alleged exploitation: “a door-to-door Sunnova salesman sold her father—who she characterized as in hospice care—a $60,000 solar system for his mobile home shortly before his death.” It also references complaints from a 2019 USA Today article regarding Sunnova’s expanding market in Puerto Rico.
The Committee requests all documents related to Sunnova’s loan approval, previous sales complaints, consumer protection measures, and the company’s financial status. They also inquire about LPO’s oversight of Sunnova’s sales practices.
By the end of the third quarter of 2023, Sunnova had amassed approximately 386,000 customers, adding 37,000 customers in the third quarter alone. The company anticipates that they will have added 135,000 to 145,000 new customers in 2023.
In response to the Committee, Sunnova outlined their position in a letter to investors on December 11, 2023, reaffirming their “commitment to Project Hestia, ethical business practices, and customer service.” The letter cited Sunnova’s role as the primary risk-bearer in the $3 billion loan, its expanded service team, the offering of 25-year warranties, and the operation of a “state-of-the-art Global Command Center” to oversee its numerous solar projects.
The company specifically mentioned the expansion of its support services in Puerto Rico, where the Global Command Center plays a crucial role, reflecting the island’s growing importance in their business strategy.
Regarding the LPO’s reaction, while no official statement has been released, Jigar Shah of the LPO expressed support for Project Hestia and Sunnova in general via a tweet:
https://twitter.com/JigarShahDC/status/1734395964486513130
pv magazine USA reached out to Kelset Hultberg, Sunnova’s executive vice president of communications and sustainability, with several queries about the company’s handling of customer support challenges over the past year:
- In instances where a dealer may have taken advantage of a customer, what are Sunnova’s policies for rectifying such situations? Are there specific steps Sunnova takes to address customer grievances before legal actions are initiated?
- If repeated sales transgressions occur, how does Sunnova deal with those sales groups? How many sales groups, or individuals, have been “fired” from Sunnova due to actions of this nature?
- Do you have statistics available on how many transactions Sunnova has backed out of that were considered aberrations to the sales process?
- Separately from above, does Sunnova have statistics available on how many potential clients used the “three day in house sales” option to decline a signed contract?
- Customer Satisfaction Metrics: Does Sunnova have data that contrasts the number of successful installations against customer complaints or legal actions? What is the percentage of customers who have lodged formal complaints or pursued legal action?
Sunnova did not provide specific responses to these inquiries, and instead directed pv magazine USA to refer to their previously issued press releases.
