Solar panel company under fire for ‘unfair trade practices’
Kyle Barnett - Apr 24, 2014
After a local solar panel installation company was named in a class action lawsuit this February, it appears many St. Charles Parish residents may be affected by what attorneys who brought the suit are calling unfair trade practices.
New Orleans-based Sader Power is accused of saying that the installation of their solar panels would result in substantial savings on a customer’s electric bill. However, attorneys handling the class-action lawsuit say that some people ended up paying more after getting solar panels.
When Boutte resident Ronnie Barger began exploring an investment in putting solar panels on his property to save on electric bills, one of the first companies he contacted was Sader Power, largely due to their marketing efforts.
“When I called they were not as nice as they appeared on TV,” he said. “I got an uncomfortable feeling. Basically the stuff they were saying was they would lease it out to you and after a while there was a fee or cost at the end.”
The part of the deal that struck Barger as odd was the fact that he would be leasing the solar panels for a six-year period before being given the opportunity to buy them from Sader Power.
Barger said he was turned off by the deal and could never find out what the eventual purchase price would be.
Instead, Barger contracted with a company that installed three large solar arrays over a three-year period. Although the solar panels cost him around $50,000 up front, he was able to recapture 80 percent of those expenses through federal and state rebates.
Barger’s electric bill is now limited to around $11 per month in fees for the hookup alone while it used to be $180 to $200 a month.
While Barger is happy that he did not go with Sader Power for his solar panels, he knows there are plenty of others out there who did not scrutinize the contract as closely as he did.
“Some people got caught in the breach here with these people who came in and did these deals,” he said.
Although the number of those in St. Charles Parish who contracted with Sader Power for the installation of their solar panels is uncertain, attorneys handling the case put the statewide number at between 2,220 and 2,800. Given that Sader aggressively marketed their services on local TV stations, it is likely a number of local homeowners were affected.
Josh Rubenstein, an attorney with the law firm Scheuermann & Jones, who is representing the class action, said that the advertised savings never materialized due to maneuvering on behalf of Sader Power to pocket state and federal grant monies that paid for 80 percent of the cost of the solar panels. Sader would then rent the system to its customers.
If a resident had instead chosen to purchase the solar panels from another company, they would have received the 80 percent rebate.
“The so-called service contract goes on for 15 years and they have been negotiating anywhere from $35 to $55 from customers per month. The profit margins are huge if you have already made your money off the installation and made money off the depreciation and this continuous income,” Rubenstein said.
Rubenstein said those who have enrolled in the class-action lawsuit against Sader Power have all have maintained they had negative experiences with the company, and in many cases have ended up paying more for their electricity.
“It is a very interesting business model. If the panels truly provided the savings that was advertised then perhaps the customer would be getting a decent deal, but all of our clients have said over and over again they have not received anywhere near the promised savings or any savings. When you add the monthly service charge, you are worse off than you were before,” he said. “It’s a bad deal for anybody but Sader.”
Rubenstein said it is difficult to locate those who entered into the rental agreements with Sader Power because the company was not licensed to do solar panel installations.
“Part of the problem with Sader is that when you install these things you are supposed to have solar license and they did not. They admitted that last month,” he said.
When the class-action lawsuit is certified, Rubenstein is optimistic that he will be able to receive a list of all of Sader’s customers.
U.S. Judge Mary Ann Lemmon, who was formerly a judge in 29th Judicial District in St. Charles Parish, is hearing the case in the U.S. Court for the Eastern District of Louisiana.
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