FTC Should Ban Forced Arbitration Clauses in Solar Leases

Statement of Tyson Slocum, Director, Public Citizen’s Energy Program

Note: Public Citizen today submitted comments (PDF) to the Federal Trade Commission (FTC) urging the agency to ban mandatory arbitration clauses in solar leasing contracts.

WASHINGTON, D.C. — (RealEstateRama) — Forced arbitration clauses have no place in solar leasing contracts. These “rip-off clauses” hidden in the fine print rob consumers of the ability to take a company to court if it breaks the law or engages in abusive practices.

While mandatory arbitration clauses are common in many industries, they usually aren’t included in electric utility service contracts. That’s because electric utility service always has been considered a public service and has been regulated as such for more than a century by states. The terms in solar leases essentially function as electric utility service. But state regulatory commissions do not regulate solar leasing contracts, leaving consumers vulnerable to corporate abuses and lawbreaking.

Homeowners who lease – rather than buy – their solar panels under long-term contracts account for more than three-quarters of all new rooftop solar deployed in the U.S. over the past year. Public Citizen obtained sample leases from SolarCity and other leasing companies and found that many contain mandatory arbitration clauses.

Public Citizen earlier this year urged the solar leasing industry leader, SolarCity, to remove arbitration clauses from standard contracts, but the company has refused. That’s why the FTC needs to protect consumers by eliminating mandatory arbitration in contracts from solar leases and power purchase agreements.

Public Citizen is a national, nonprofit consumer advocacy organization founded in 1971 to represent consumer interests in Congress, the executive branch and the courts.

Contact:
Phone: 202-588-1000

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Federal Trade Commission

The Federal Trade Commission (FTC) deals with issues that touch the economic life of every American. It is the only federal agency with both consumer protection and competition jurisdiction in broad sectors of the economy.

The FTC pursues vigorous and effective law enforcement; advances consumers’ interests by sharing its expertise with federal and state legislatures and U.S. and international government agencies; develops policy and research tools through hearings, workshops, and conferences; and creates practical and plain-language educational programs for consumers and businesses in a global marketplace with constantly changing technologies.

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1-877-FTC-HELP (1-877-382-4357)

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