Consumer Protection

Consumer protections for energy systems and technologies broadly include laws, policies, and programs aimed at protecting consumers against unsafe and unfair goods, services, and business practices.

State and local governments and industry groups have implemented a variety of approaches to ensure that consumers who install energy-generating systems or energy-efficient technologies are protected and treated fairly. Efforts to protect residential customers fall broadly into two categories:

• Physical safety, which is addressed through provisions such as system design and standards, building codes, fire protection requirements, and workforce standards and credentialing
• Strategies to protect customer financial investments by preventing fraud, abuse, and deception.

Although it is ultimately the consumer's responsibility to complete due diligence when learning about markets and products, industry and government play a role in ensuring that consumers have access to this information.

Existing Consumer Protection Landscape

Federal Trade Commission Regulations

The Federal Trade Commission Bureau of Consumer Protection is charged with investigating and stopping Unfair, Deceptive, or Abusive Acts or Practices. The agency regulates all advertising and telemarketing within the United States, which also extends to how energy developers and installers advertise their systems.

Safety Standards

Codes provide a base level of safety to consumers. These include:

National Electric Code

International Residential Code

International Fire Code.

Implementation Standards

Government and industry approaches to consumer protections range from less formal practices, such as consumer education, to more formal actions, such as enacting regulations or establishing grievance procedures. In broad terms, consumer efforts include consumer education, guidelines and standardized contracts, workforce standards and credentialing, consumer protection regulations, and grievance procedures.

Consumer Education

Consumer education materials focus largely on helping customers understand contract terms, financing options, and local policy considerations, all of which are discussed in more detail below. Resources may also highlight questions that consumers should consider and ask of developers, installers, and financing institutions before entering into contracts. For example, Minnesota has leveraged online resources to share information about local and state-level solar policy to aid consumers in understanding the local policy landscape. In addition, New York, Vermont, and New Mexico have published state-specific homeowner guides to residential solar and financing options.

Understanding Contract Terms

Installing a rooftop PV system, for instance, raises many questions, which may be included in a lengthy contract:

• What is the length of the contract?
• Who owns the PV panels?
• What happens if the customer wants to sell their house?
• What happens if the PV system is damaged? Who is responsible for insurance?
• Is there a minimum production guarantee?

The answers to many questions consumers may have about their contract are often different depending on the financing mechanism.

System Financing

Customers may initially be confused about what exactly they are purchasing and owning. For residential energy system consumers, the main financing arrangements include direct purchase, loans, and third-party ownership models like leases and power purchase agreements.

Navigating Policies

To fully understand the financial costs and benefits of installing energy-generating systems or energy-efficient technologies, consumers need to comprehend the national, state, and local laws and incentives that influence investments, including net metering regulations, renewable energy certificate markets, and financial mechanisms.

Guidelines and Standardized Contracts

Developing clear guidelines for installers and third-party system owners is another important element of a robust consumer protection strategy. Additionally, guidelines or standardized contract templates can help consumers understand contract terms and can create a more competitive market by helping consumers accurately compare offers.

Workforce Standards and Credentialing

Product and workforce standards and credentials are used as a consumer protection strategy across many industries globally. In addition to system and component safety standards that states can elect to adopt, state and local governments can implement workforce standard and credentialing practices to foster safer and more transparent residential markets. Consumers that use businesses with credentialed workers can be sure that the workers have the competencies to perform quality work using industry best practices for safety and cost-effectiveness.

Enacting Consumer Protection Regulations

Several states have passed disclosure laws and regulations, which require developers to provide certain details about products to customers upfront. Arizona, and Utah have passed mandatory rooftop PV disclosure laws, while Maryland has instituted mandatory community disclosure regulations.

Establishing Grievance Procedures

Establishing grievance procedures can help state attorney general offices evaluate complaints. When paired with strong mandatory disclosure laws, these procedures can help the Federal Trade Commission and state attorney general offices evaluate customer complaints more efficiently—and thus, address more of them. Industry groups such as the Solar Energy Industries Association have also developed internal complaint processes for consumers.

NLR Publications

Best Practices for Operation and Maintenance of Photovoltaic and Energy Storage Systems, NLR Technical Report (2018)

Additional Resources

For more information about consumer protection, the following tools and resources may be helpful:

Consumer Protection, Interstate Renewable Energy Council

Residential Consumer Guide to Solar Power, Solar Energy Industries Association (2023)

Guide for States: Consumer Protection for Community Solar, Solar Energy Industries Association (2017)

Something New Under the Sun: Competition and Consumer Protection Issues in Solar Energy, Federal Trade Commission Workshop (2016)