Texas-based Sunnova, which has a virtual monopoly on Puerto Rico’s residential solar panel rental market, may no longer do business without being held accountable, but it won’t have to respond retroactively to the hundreds of clients who filed complaints over problems with its service and equipment.
The Puerto Rico Energy Bureau (PREB) confirmed that Sunnova has to change its business practices because it failed to disclose full information before clients signed the contracts. Nor did it adequately inform them on how the photovoltaic panels would work when connected to the Puerto Rico Electric Power Authority’s (PREPA) network, nor did it warn them that they would be useless when the power went out, as it happened after Hurricane María.
The procedure that the company offered to consumers to challenge billing issues is also illegal: an arbitration process, sometimes in Texas, in which customers are prevented from seeking help from the PREB, the top regulatory authority over the island’s public and private energy system.
Sunnova’s modus operandi violates Act 57 of 2014, known as the Energy Transformation and Relief Act, the PREB stated. But the regulator’s resolution and order, notified last December, arrived late and offers only a partial solution for customers.
It has been four years since the Independent Consumer Protection Office (OIPC, in Spanish) filed a request for an investigation against Sunnova, on behalf of those affected. But the decision that the PREB ultimately issued will not protect those who have already rented the solar panels, rather those who do so in the future, said attorney Hannia Rivera, executive director of the OIPC.
“Justice was not served to Sunnova clients. The matter is not resolved,” she added. The OIPC is requesting a review and maintains that, if no remedy is found, it will go to the Court of Appeals.
Madeline Batista, who sought help from the OIPC after installing solar panels at her home in Naguabo, confirmed she is dissatisfied with the process. “That resolution does not benefit me at all. What I wanted was for Sunnova to take the equipment and dispose of it and end the contract.”
For Sunnova, Puerto Rico isn’t insignificant. After California and New Jersey, this is where it has the most clients — nearly 16,000. The federal Energy Information Administration (EIA) published data, updated through December 2020, that shows the company’s dominance on the island. Sunnova commands 96% of the residential photovoltaic panel rental market, as well as 76% of all residential equipment interconnected with PREPA’s network through the net metering system.
Through this system, solar panels power homes and the excess energy is delivered to PREPA’s grid in exchange for a credit on consumers’ bills. If they need more electricity than their photovoltaic panels supply, they buy it from the public corporation.
“There are many solar providers on the island and Puerto Ricans have the choice to work with any of the installers that are available to them; we have always welcomed this competition,” the company said in a statement provided to the CPI, to questions about the monopolistic domain that the company exercises in the local renewable energy industry. This media outlet also asked what specific measures it would take to address the PREB’s decisions, but Sunnova said it could not discuss the matter because the issue is under consideration by the regulator in a new administrative proceeding against the company.
The business segment that the company commands — residential solar panel rentals — has only two providers in Puerto Rico: Sunnova and California-based Sunrun. This modality of providing access to renewable energy differs from other companies that sell equipment to be used completely independently from PREPA or connecting to it through the net metering system.
The Puerto Rican company Maximo Solar, a former partner of the Texan company, which is now associated with Sunrun, had accused Sunnova in a lawsuit of carrying out a “master plan” to implement a monopoly in the island’s residential solar market. This case was resolved in October 2019, according to the court docket, with an agreement between the parties that resulted in the contract between Sunnova and a consumer being terminated.
“Our clean energy service offerings have allowed people from all walks of life to access the savings and reliability that solar and storage provides. We are committed to building a cleaner, more reliable and more resilient energy system in Puerto Rico,” the company claimed.
These statements contrast with the experience of more than 500 people who filed complaints with the OIPC and asked it to represent them before the Bureau to resolve their problems with Sunnova. In addition, more than 250 people have filed complaints in the past three years with the Better Business Bureau (BBB), which annually accredits companies that demonstrate ethical business practices and good customer service. The BBB last certified Sunnova in 2019 in Texas, where the corporation is headquartered.
Solar panels, which generate electricity at points of consumption, can help people from losing power after a major hurricane like María, which after destroying PREPA’s power grid in 2017 caused one of the longest blackouts in global history. This was one of the reasons why patients who depended on electrical equipment died.
Similar to most of the plaintiffs, Madeline Batista signed a request for services and a credit check on a tablet, but later learned that she had actually signed a contract. Furthermore, she did not see the promised savings in the bills after the solar panels were installed. And when Hurricane María hit, the photovoltaic panels, which had no batteries, stopped working: the technology disconnected from PREPA on every blackout. That was something that she had not been previously told about, she told the CPI.
It was after Hurricane María that Sunnova began offering battery-powered energy storage, available for rental at an additional cost, allowing solar equipment to operate independently of PREPA and keeping homes energized during blackouts.
Batista moved to South Carolina after the hurricane. She left the solar panels installed on the roof of her home because the 25-year contract with Sunnova does not allow her to remove them unless someone buying the house wants to take on the debt. There is only one relative now living in her house, but the electricity bill with Sunnova is fixed: $109 per month. “That’s very expensive for someone who is hardly ever in the house. The system was not worth it.”
Problems with Sunnova are not exclusive to Puerto Rico
Batista’s story is similar to Virginia Doroteo’s, but she lives in Los Angeles, California. Six years ago, her husband was shown a tablet with a document in English, and he only speaks Spanish. He initialized it expecting that they would give him a qualification and then give him the contract to sign. But he too had unknowingly committed to a 25-year contract. He and his wife wanted to buy the panels, not rent them.
To install the photovoltaic panels, they had to make improvements to the roof. They asked Sunnova for time to get them done. “They told us not to worry, that we could install the solar panels and then remove them when we were ready for the repairs and put them back later. But then they told us that taking them off and putting them back on was going to cost us $1,500, which is what they charge, but they didn’t tell us that initially,” said Doroteo.
Then she told Sunnova representatives: “the contract is in English. My husband doesn’t speak English. You’re only interested in closing the contract to get the money.”
The highest electricity bills came in at around $80 every summer, when the air conditioning was turned on most of the time. With Sunnova, they have been paying more than $85 a month, which will increase, because the contract has a 3% increase every year. “With them the bill never dropped. On the contrary, it went up,” said Doroteo.
Six months ago, Doroteo and her husband stopped the automatic monthly payment to Sunnova and said they were not going to pay them anymore. “Since then, they haven’t left me alone. They call daily to collect.” Doroteo offered the company to pay off the pending debt if Sunnova disassembled and removed the panels. “They told me that wasn’t going to happen and that I would have to keep the contract.” That’s impossible for her family: “with the pandemic I don’t have a job, I have no money.”
Doroteo’s husband, Marcos Luna, was one of those who filed complaints with the Better Business Bureau, this entity confirmed to the CPI. The BBB told the company that it would not renew its good service and ethical business practices certification until the PREB case in Puerto Rico is resolved. However, Sunnova did not reapply for accreditation in 2020. It was unable to do so. It had to resolve and respond to six complaints filed with that entity, a requirement to be able to get a new certification. Sunnova told the CPI that it intends to recertify in the “near future.”
Based in Houston, Sunnova was founded in 2012 and has been a publicly traded company since 2019. It has more than 100,000 clients throughout the US and territories connected to net metering programs, according to the EIA.
Although renewable energy is a way of breaking free from imported fossil fuel pollutants, such as oil, coal, and methane gas, the EIA’s numbers show that Puerto Rican residential solar market also depends on foreing sources because it’s controlled by Sunnova.
“Getting rid of fossil fuel doesn’t mean that we have freed ourselves from colonialism and energy imperialism,” said Marcel Castro, professor of engineering at the University of Puerto Rico’s Mayagüez Campus, who is advocating for a significant island wide effort to develop renewable energy by putting solar panels on the roofs of houses and using batteries to store the energy.
Waiting for the Bureau to approve a protocol
In 2019, after the PREB found that the company did not comply with Puerto Rico’s public energy policy, Sunnova expressed its opposition to the investigative process. It alleged that the regulator lacked information that contradicted its findings and that it based its conclusions on client allegations without giving it the opportunity to refute them.
In the resolution and order issued in December 2020, the PREB upheld its conclusions and ordered the end of the investigation. It further said that Sunnova’s allegations, that it adequately trains and supervises its local partners to provide good service, fell short. Its local partners are intermediary companies that promote solar panels with no initial installation costs and with fixed monthly rental payments, such as Power Solar, Pura Energía, Iso Group, Windmar Home and Melpro.
The PREB also ordered Sunnova to develop a protocol to disclose full business information before clients sign contracts and to process billing objections without requiring arbitration. The regulator is still evaluating the protocol that Sunnova would apply, almost two years after opening an administrative procedure for Notice of Non-compliance against Sunnova.
The new administrative procedure that began in 2019 was interrupted by a procedural error by the PREB, which prevented from initiating it until the prior investigation was completed. Once it was completed in December 2020, the PREB reopened the new process and is now evaluating the protocol that Sunnova presented.
“There’s no justification. The amount of time it has taken is excessive,” said attorney Hannia Rivera.
Another dispute has now come up as a result of the conclusions of the investigation and the 2019 administrative procedure. The OIPC, defender of the rights of energy consumers, asked that PREB reconsider its decision to end the investigation, because it did not offer any remedy to those affected. It also requested that it promptly evaluate the protocol submitted by the company, to protect more consumers from experiencing the same problems. It asked to be an intervening agent in the pending case from which a protocol must result, something that was rejected by the regulator, which is asking the OIPC to first establish why it should be allowed to intervene.
The PREB told the CPI that there will be no remedy for claimants who have already signed contracts with Sunnova, because the OIPC asked for an investigation into Sunnova’s practices but failed to file a complaint under Regulation 8543 requesting specific remedies.
“Neither the OIPC, nor the clients that had flagged these Sunnova practices, petitioned an adjudicative process of complaints at the Energy Bureau,” the PREB said in a statement to the CPI. “For the Bureau to provide specific remedies, it must be under an adjudicative process, which is typically a complaint process that’s characterized by giving the parties access to due process of law, and a formal process for adjudicating controversies. The remedies requested by the OIPC and Sunnova were procedural in nature.”
However, PREB’s stance of not providing a remedy to Sunnova’s clients raises questions about the extent to which the regulator responds to article 6.3 of Act 57 of 2014, which makes it responsible for investigating and protecting consumer rights, with all the additional and implicit powers necessary to comply with public policy.
“The OIPC’s position is that the Bureau had and still has the legal power to grant a remedy to all Sunnova consumers and, to protect their rights and the public interest, it was obliged to do so. This, regardless of the process in question or the remedies that the OIPC may have requested,” said Attorney Rivera.
The case proves how access to energy justice in Puerto Rico is bureaucratic and technical, while discouraging consumers from seeking a cleaner and cheaper energy service.
If necessary, “I will be forced to go to the Court of Appeals. I’m going to defend the powers that were delegated to us by law. Our powers are absolute. I don’t see why the Bureau believes that we cannot intervene, especially when this case arises from an investigation request from the OPIC,” said Rivera.
“I want to somehow guarantee that the corresponding administrative measures are taken against this company.”
“I hope that the situation that happened with the investigation request, which took almost five years, will not happen again in this case … It’s not fair that at this point we’re still deciding whether the company should in fact be sanctioned when the Bureau itself determined that it violated the law. And it seems unfair to me that consumers haven’t been given relief. I’m very disappointed with the process that was brought before the Bureau,” Rivera added.
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