“The Trustee is mindful that there are many customers who have solar panels systems that are not installed, not working properly, or not working at all. The Trustee is also mindful of the financial consequences to each customer created by the Pink Energy bankruptcy,” according to a fact sheet from court-appointed attorney Jimmy Summerlin of North Carolina.
“In the current state of the bankruptcy proceedings, it is neither practical nor financially feasible for the Trustee or the bankruptcy estate to complete any installation or repair work.”
The 8-year-old company had offices in several Ohio cities and employed 2,100 people before closing.
Neither Pink Energy, nor its law firm, will respond to questions, according to an automated message at Grier Wright Martinez, the Charlotte, North Carolina law firm handling the company’s bankruptcy case filed on Oct. 7. The law firm also did not respond to an emailed request for comment.
The complaints and swirl of legal action around Pink Energy provide a cautionary tale for consumers looking to save money on energy and as residential solar energy system installations soar and the federal Inflation Reduction Act boosts to 30% a federal tax credit for those systems. That law, passed earlier this year as part of an effort to battle climate change, replaces a 26% credit set to decline and then expire in 2024.
“Pink Energy ripped off consumers and is hiding behind bankruptcy,” said Pennsylvania Attorney General Josh Shapiro, who along with eight other state attorneys general sent a letter in late November to Sunlight Financial of North Carolina and four other lenders who financed the purchase of the Pink Energy systems, asking them to suspend loan payments and interest accrual as those states’ investigations and litigation involving Pink Energy continue.
Shapiro’s office has 299 complaints about Pink Energy as of Dec. 11, said Jacklin Rhoads, communications director.
“Lenders who want the solar power sector to grow should help consumers obtain relief now, while Pink Energy’s bankruptcy process continues,” Shapiro said in a news release. “Consumers made good-faith choices to heat and power their homes and should not be trapped in loans for a product that wasn’t delivered.”
Loan payments outstrip energy savings
Gilroy, a service-disabled U.S. Marine Corps veteran, said the company installed an undersized solar array and battery pack system that never produced the promised 100% electric bill offset. Instead, it saved him just $50 on his $200 monthly electric bill. After he went through the company’s arbitration process with the assistance of Yost’s office, Pink Energy agreed to install more solar panels. But although the monthly savings briefly rose to about $80, those new panels never passed all inspections and soon stopped working properly, Gilroy said.
Pink Energy directed Gilroy to use Sunlight Financial, which he said then brokered his loan with San Jose-based Technology Credit Union. Neither lender responded to questions from this newspaper.
Gilroy said the payments on his 25-year loan rose from $165 monthly to $226, an increase he blames on deceptive information provided to him about when he would get a federal tax credit that had to be applied toward the loan in the first year to keep payments from rising annually.
Gilroy said he was not sent detailed loan documents until after he obtained the loan, but he acknowledges that he should have more closely read the documents for both the solar energy system and the loan before signing them.
He said it wasn’t until later that he recognized as a red flag that Pink Energy employees frequently only responded verbally, rather than in writing, when he asked questions and sought clarification about the system they were installing.
Other consumers also complained about Pink Energy misrepresenting eligibility for state or federal tax credits they could use to pay off their loans, according to data from Yost’s office and the letter to lenders sent by Shapiro and the other attorneys general.
“For many consumers, not receiving the promised tax credits has left them unable to make the necessary lump sum payment required to keep your company, or an affiliated lender, from substantially increasing their monthly loan payment,” according to the letter to lenders. “These consumers relied on Pink’s representations regarding the tax credits in deciding that they could afford the terms of their loan, and the increased monthly payments are beyond what their budgets could handle — especially when the solar power system is not functioning properly or at all.”
|Local consumer complaints about Pink Energy|| |
|Thirty-nine area residents are among 410 Ohio consumers who filed complaints with Ohio Attorney General Dave Yost about problems with residential solar energy systems installed by Pink Energy, formerly known as Power Home Solar, a North Carolina company that closed and filed for bankruptcy in October.|| |
|Source: Ohio Attorney General Dave Yost|
Ohioans accuse Pink Energy of aggressive sales tactics, misrepresentation of cost savings, warranty issues, poor construction and installation and customer service problems, according to a lawsuit Yost filed in Cuyahoga County Common Pleas Court in September accusing the company of violating the state’s consumer protection laws.
Yost wants Pink Energy to pay civil penalties of $25,000 for each separate violation of Ohio law and reimburse all consumers found to have been damaged by the company’s “unlawful actions,” according to the lawsuit, which was filed the week before Pink Energy’s bankruptcy filing.
“When a company files bankruptcy, it adds another layer to our case in that another court becomes involved, including that court’s rights and rules,” said Kelly May, spokeswoman for Yost.
Missouri Attorney General Eric Schmitt also sued Pink Energy for violating that state’s consumer protection laws, according to an October news release from Schmitt.
The Better Business Bureau received 1,617 complaints about Pink Energy in the past three years, according to its website.
Pink Energy officials blamed the problems consumers have on a line disconnect device known as SnapRS made by Generac Power Systems Inc., a publicly-traded Waukesha, Wisconsin company that sells generators, solar and battery storage solutions, energy management devices and power tools. The SnapRS device is installed between solar panels to allow a rapid shutdown of the system in compliance with national safety standards.
“Due to rampant consumer discontent resulting from faulty Generac solar equipment, Pink Energy has been forced to close its doors permanently. We exhausted all avenues to find a way forward that would allow us to service all past, present, and future customers and are devastated that we can’t do so,” the company posted on its now defunct website in October.
Pink Energy sued Generac in federal court, claiming that the company’s equipment overheated and caused the Pink Energy solar panels to stop working and leading to massive demand for service calls. The lawsuit alleges that problems with the Generac part caused Pink Energy to lose $155 million in revenue and $452 million in business valuation, according to documents filed in U.S. District Court in Virginia on Aug. 1.
Pink Energy’s bankruptcy filing lists $17.7 million in debt the company owes Generac.
“The current year net income includes pre-tax charges totaling $55.3 million, including $17.9 million of bad debt expense related to a clean energy product customer that has filed for bankruptcy and $37.3 million of clean energy product warranty-related matters,” Generac stated in its Nov. 2 third quarter results.
In December a lawsuit was filed against Generac by two investors, Oakland County, Michigan employee benefits and retirement plans, according to the lawsuit filed in U.S. District Court in Wisconsin. The lawsuit alleges Generac withheld information from investors about the problems it had with SnapRS and the risks of it’s business relationship with Pink Energy.
The lawsuit seeks class action status and compensatory damages.
Generac spokeswoman Tami Kou did not directly address the claims in the two lawsuits, but said the company is committed to its customers and understands how frustrated consumers are with “Pink Energy and their inaction.”
“In certain situations, especially when product installation guidelines have not been followed, as appears to be the case with some Pink Energy installations, customers may have experienced certain issues with a particular Generac component of their solar energy system. We are committed to replacing those components under warranty, if needed,” Kou said.
“Generac is a leading manufacturer of solar plus storage solutions, and we sell our products to a wide range of distributors and solar contractors. We’ve been in business for more than 60 years, and we’ve done that by standing by our promises and products.”
Gilroy had earlier tried to get Generac to assess his system but said they wanted to charge him for that visit. However, after being contacted by this newspaper, Kou said the company would assist Gilroy.
“Generac is helping,” Gilroy said on Tuesday “They are actually out here today trying to figure out what is wrong.”
Kou said consumers will not be charged for parts or labor for warrantied Generac parts as long as they go through an authorized warranty service provider.
“Pink Energy customers who need support or have questions about the Generac components of their solar systems can contact us at firstname.lastname@example.org or 1-800-396-1281 for assistance,” Kou said.
‘People need to be cautious’
The U.S. Federal Trade Commission and the Better Business Bureau websites both have consumer tips for people considering installing solar energy systems in their homes.
They emphasize that consumers need to start by thoroughly researching their energy needs, including using the U.S. Department of Energy’s customizable calculator. And they say to not rely exclusively on information provided by the company selling the system.
Consumers should become familiar with the options to buy, lease, subscribe to a shared community system or sign power purchase agreements, as well as the ramifications of each, including impact on selling the home or what happens if the roof needs replaced after panels are installed.
The BBB also recommends consumers get references from people they know, seek multiple bids and carefully read contracts with the solar energy systems company before signing.
Solar energy is a great way to power a home, but “people need to be cautious,” said Rich Stromberg, vice chair of the photovoltaics technical division for the American Solar Energy Society, a non-profit renewable energy advocacy group.
Homeowners can research solar energy through sources like state solar energy societies, he said. Stromberg also recommends picking an established company with a good reputation and having an attorney review any contracts before signing.
“There are very reputable and well-intentioned companies out there,” Stromberg said. “But there are folks out there that all they are concerned about is the sale and getting it installed and you have to question whether they’ll ever be around for support.”
For Gilroy his search for some energy independence and a way to help the environment left him feeling like the victim of “one big Ponzi scheme.”
“Their whole sales pitch was that their solar systems would produce 100% of your electrical needs and the savings from your electric usage would cover your solar payment,” Gilroy said. “So your solar payment would be equal to or less than your current electric bill and you wouldn’t have an electric bill. It pays for itself. Except it never did.”
Follow @LynnHulseyDDN on Twitter and Facebook