Top Class Actions  |  July 19, 2024

Category: Lawsuits to Join

Solar PPA issues: Who’s affected?

Couple trying to understand their contract.
(Photo Credit: fizkes/Shutterstock)

Did you sign a power purchase agreement (PPA) with Sunrun or Vivint Solar? California residents may be eligible to take part in an investigation into allegations of deceptive sales and business practices. Fill out the form on this page to learn more. 

Residential solar company Sunrun, which acquired Vivint Solar in October 2020, is facing allegations it duped consumers into long-term contracts using misleading sales tactics, including promises that customers could cancel any time, lower their energy bills, pay for only what they use, easily transfer to another person if they sold their home, increase their property value, and other allegedly false and deceptive claims.  

These allegedly aggressive and dishonest sales tactics and hard-to-understand PPAs lock consumers into 20-year obligations that are difficult and extremely expensive to escape. These practices may violate California consumer protection laws and, as a result, homeowners could be entitled to compensation or other relief to help get out of their contract. 

Do you qualify?

If you live in California and have a solar PPA (not a solar lease) with Sunrun or Vivint Solar, you may be able to pursue mass arbitration and seek relief.

Fill out the form on this page for more information.

Sunrun and Vivint Solar accused of deceptive sales practices

Sunrun and Vivint Solar have allegedly employed high-pressure, dishonest sales strategies and complex financial agreements for more than ten years. These tactics can be excessively harmful to consumers. 

These two residential solar energy companies offered a power purchase agreement, which locks individuals into a 20-year obligation. The contractual language within the solar PPA can be complex and nuanced, making thorough comprehension challenging for many consumers. Additionally, early termination of the contract may trigger significant financial penalties or obligations for the homeowner. 

If these allegations are found to be true, they could represent multiple violations of California statutes meant to safeguard homeowners. As a consequence, individuals who signed a Vivint Solar or Sunrun power purchase agreement may qualify for legal recourse. 

Power purchase agreements: an overview

What is a power purchase agreement?

A power purchase agreement (PPA) is a contract where the homeowner agrees to pay a predetermined rate for the electricity generated by a residential solar energy system over the entire term of the contract. Individuals pay for a fixed amount of kilowatt-hours of electricity. 

If the homeowner’s usage exceeds the amount produced, the homeowner must pay the local utility provider (e.g., PG&E, Southern California Edison) for any supplemental energy needed. If a homeowner does not fully utilize what their system produces, the energy is typically wasted. At the end of the 20-year contract, the homeowner does not own the equipment and is required to pay further fees to keep the system in place.  

Will Sunrun put a lien on my home?

When the homeowner enters into the power purchase agreement, Sunrun/Vivint Solar will file a UCC-1 Financing Statement against the property. While this is not formally classified as a lien, it serves a similar purpose. This statement gives the solar company recourse to obtain the homeowner’s property in the event of non-payment.  

Are there tax benefits to me under a solar PPA?

No. The solar company owns the system throughout the contract and therefore is entitled to utilize any tax credits or other governmental benefits. 

What if I want to cancel my Sunrun PPA?

Terminating your Sunrun PPA before the end of the contract presents significant challenges for the homeowner. If the homeowner wishes to sell the property, relocate, or discontinue payments due to financial difficulties, the agreement stipulates that they must repay the estimated remaining energy value for the entire term. For example, if the homeowner originally signed a 20-year contract, this could mean paying for over a decade of energy before it is ever generated—often tens of thousands of dollars!

What if I want to sell my home?

In order to sell your home, you have two options: (1) Persuade the homebuyer to take over your PPA, or (2) buy out the entire contract if the homebuyer won’t agree to the assignment. Either way, the PPA will complicate your transaction. You may have to reduce the sale price or offer other concessions. And if they won’t budge, you must buy out the PPA and, if you wish to further utilize the system, pay for removal, transportation, and reinstallation yourself. 

Can I file a class action lawsuit?

Unfortunately, no. Except for the very first consumers who signed up with Vivint Solar more than a decade ago, every version of the PPA contains an arbitration agreement and class action waiver. That means any legal dispute must be brought in a private legal action called arbitration and you cannot join with other consumers who have similar claims. 

What kind of relief can I get in arbitration? 

The good news is you can get the same relief as in a court of law. That could mean cancellation or modification of your PPA, monetary compensation, or other relief. 

Is arbitration expensive? 

Arbitration is not expensive for you. Under the PPA, Vivint Solar/Sunrun must pay for arbitration costs and fees, which can be tens of thousands of dollars, whereas we just pay a small filing fee. 

How are you paid? 

We only get paid if we win—meaning we receive a portion of any arbitrator award or settlement. If we recover nothing, you pay nothing. While arbitrations are typically quicker than lawsuits filed in court, the legal process is hard to predict. Some cases may resolve within several months and others may take a year or two. 

See If You Qualify

Join a Sunrun and Vivint Solar PPA investigation

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