Solar Wars- Homeowners Lose

In Solar these days these days there are a lot of losers. There are the national solar companies who continue to operate in the red. There are the small solar companies that are being driven out of business by the large ones. There are the shareholders whose money is being used to subsidize the large companies, who are being run like internet companies with burn rates. And finally there are the homeowners who are being sucked into signing these 20 year leases that end up costing them more money than if they had bought the system themselves.

Why does SolarCity continue to lose money? Opening up so many new markets has a learning curve, which according to some in the industry has proved expensive. These fast track solar companies  are constantly tweaking or overhauling with their business models. SolarCity has remade itself several times since its humble beginnings as a community oriented solar installer in Northern California. The company recently shook up its east coast operation, shutting down  divisions and completely replacing management teams.   Elon and company recently felt strongly enough about a need for change that the company  turned to a competitor and “poached” their CEO – Tanguy Serra from fast growing rival Vivint Solar.  For such an innovative thinker, Elon is not shy about stealing expertise from the competition. This is not the first time SolarCity has “poached” expertise. In 2012  SolarCity and Sunpower were engaged in a lawsuit after a top Sunpower Sales Manager jumped ship to SolarCity with his salesteam with their downloaded Salesforce client lists in tow.

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News: Elon Musk’s SolarCity appears to have gotten a two-for-one special this week, bolstering its own management team while weakening that of one of its closest competitors. The company has hired former Vivint Solar CEO Tanguy Serra as its Executive Vice President of Operations, according to a source with knowledge of the situation. April 23. 2013.

In an interview in December 2013  Vivint CEO and perennial cap wearer Todd Peterson is quoted as responding to Tanguy’s “poaching” saying: “We fired our president of solar six months ago, he went to work there. Instead of trying to figure out how to do it themselves, they’re just hiring our sales managers, which is fine…Obviously, we’re better at customer acquisition and targeted sales acquisition than they are.”

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“We’ve got to where SolarCity took 8 years to get to, in 2 [years]. Elon Musk’s cousin…… Lyndon or whatever, he spends his entire day doing what? Recruiting Vivint’s sales guys. I’m not joking. Every day, day in, day out, trying to recruit our people away from us. Because all they know how to do is raise capital ….”

 Read more:http://www.businessinsider.com/vivint-solarcity-2013-12#ixzz2pfCQMeJT
Todd Peterson’s company Vivint – specializing in home alarm systems, boasts a meteoric growth rate via supercharged sales tactics, and a long trail of collateral customers complaints, lawsuits and state  investigations. This summary of complaints was taken from Wikepedia. 

Vivint’s sales practices have resulted in nearly 2500 complaints to the Better Business Bureau over the last three years, and resulted in investigations by at least fifteen states.[44][45]

Wisconsin took legal action against the company in September 2012, for deceptive and misleading sales tactics. The judgment ordered Vivint Inc. to refund up to $148,000 and cancel almost $450,000 in consumer debt. The judgment requires Vivint to pay refunds to consumers who were misled about their ability to cancel their alarm service contracts, as well as consumers who were misled about false alarm charges. Vivint also will remove affected consumers from collections and the company will pay forfeitures and attorneys fees to the State as well as improve their disclosures to consumers about their services and charges, making it easier for consumers to cancel their contracts if they so desire.[46]

Arkansas fined Vivint/APX $40,850 for over 40 violations in 2009.[47] On September 10, 2010 the State of Arkansas Attorney General’s Office charged Vivint, Inc. with violating the Arkansas Deceptive Trade Practices Act. Vivint paid $125,000 for the costs of the investigation and prosecution of the complaint.[48] In 2008 and 2009, Vivint paid a total of $65,850 in Arkansas using improperly licensed workers.[44]

The states of Washington, Louisiana, South Carolina, Minnesota and Tennessee have all fined Vivint/APX for violating state licensing codes.[47][49][47] In Washington, police cited Vivint/APX seven times in 2008 and 2009 for having unlicensed workers install alarms.[44] Louisiana also fined Vivint for violating a Cease and Desist Order, and engaging in false, misleading, or deceptive practices.[47]

State and local prosecutors in California, Ohio, Oregon, and Kansas have also charged Vivint with engaging in deceptive trade practices, misleading customers, and engaging in improper collections tactics. To settle these charges, Vivint has entered into consent agreements. Vivint paid $425,000 in fines in California.[50][51] Oregon fined Vivint/APX $60,000 for “targeting elderly Oregonians with misleading and high-pressure sales tactics”.[52]

Similar complaints about the firm’s sales tactics have arisen in Maryland, Nevada, and Nebraska. Police in Georgia warned residents about aggressive alarm companies after hearing complaints about APX. Maryland officials have also addressed complaints against the company.[53] Vivint entered into a compliance agreement with Nebraska in which it agreed not to make any false or misleading statements or attempt to deceive customers.[48]

SolarCity seems to have bought into (literally) the Vivint model.

Pederson is correct, Vivint Solar’s rise has been even more dramatic than SolarCity’s.  The company employs the same door to door style they use with their home alarm business. They focus on middle class neighborhoods, people with perhaps  smaller electric usage but a keen desire to reduce their utility costs. Vivint has quickly dominated many of the markets they have entered. Elon and company clearly want a piece of those aggressive growth numbers, and are eager to take on the requisite sales tactics. Their  high flying stock made the front page of The New York Times again last Sunday. The article closed with an angry SolarCity customer. Pressed to constantly boost sales numbers to keep that share price aloft, SolarCity has chosen a business model that will inevitably lead to larger numbers of dissatisfied customers. And unfortunately for now it seems as goes SolarCity so goes the solar industry,

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read full article – Vivint Dominates Hawaii Solar Market, Sparks Consumer Fears
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