SALT LAKE CITY — Utah's Vivint Solar is named in a 17-count civil complaint, filed Thursday by New Mexico Attorney General Hector Balderas, that includes allegations of unfair business practices, fraud and racketeering.
In a release, Balderas said an investigation conducted by his office uncovered evidence that Vivint's actions in New Mexico have led to "hundreds of clouded titles" to residents' homes, that the company employs "high-pressure sales techniques and procedures designed to mislead consumers" and binds customers into 20-year contracts under which rates increase "by over 72 percent" over the life of the agreement.
“I will fight to protect the rights of all New Mexico consumers and hold giant, out-of-state corporations accountable who abuse, mislead and employ dishonest practices to defraud our hardworking families,” Balderas said. “Every New Mexican deserves access to clean, affordable energy, and the development and expansion of rooftop solar should be encouraged by businesses that use the industry’s best practices to help consumers become more energy independent.”
In a statement issued Friday afternoon, Vivint Solar disputed characterizations made in Balderas' press release.
"Much of the interest in this lawsuit has been driven by this press release that not only misrepresents Vivint Solar's dealings with consumers in the state, but also does not accurately describe the attorney general's own allegations in the disputed lawsuit," the statement read. "It was also issued before the lawsuit was filed, giving Vivint Solar little opportunity to respond."
The statement goes on to say that the company intends to address all the issues in court, but sought to clarify how their contracts with customers, called purchase power agreements, actually work.
"To be clear, Vivint Solar does not, has not, will not and cannot ever jeopardize its customers' home ownership," the statement reads. "Vivint Solar does not take a lien on its customers’ homes under its purchase power agreements or solar system lease agreements. A (purchase power agreement) is commonly used throughout the residential solar industry as a means of providing consumers with access to clean, affordable energy with no upfront investment by the customer; in exchange, the customer agrees to pay for all energy produced by the solar energy system."
In an op-ed published in December by The Hill, Daniel Stevens, executive director of the nonprofit watchdog group Campaign for Accountability, wrote that Vivint and Elon Musk-owned competitor SolarCity account for the majority of complaints filed about solar companies with the Federal Trade Commission.
"First among the companies receiving high numbers of customer complaints, two companies in particular stand out: Vivint and SolarCity," Stevens wrote. "Complaints against these two — among the largest providers — constituted nearly 56 percent of all the complaints filed with the Federal Trade Commission about solar companies. Among other things, consumers reported being tricked into buying or leasing solar panels and ending up with increased, rather than lower, utility bills."
In an interview Friday, Stevens said his organization has gathered solar company consumer complaint data from multiple states and has previously requested investigations, based on evidence of "false and misleading actions," by the attorneys general of California, Florida, Oregon and Texas. Stevens said he was "not surprised" by the allegations leveled against Vivint Solar in Balderas' filing.
"Our initial focus was just looking at contract-related issues," Stevens said. "But what we found was the complaints were much more widespread."
According to a spokesman for Balderas, the New Mexico Attorney General's Office had received seven complaints since 2016 about Vivint Solar. He also noted some early complaints went through an informal resolution process under the state's Consumer and Family Services Division.14 comments on this story
Vivint Solar was founded as an offshoot of Vivint, now Vivint Smart Home, in 2011 and became a publicly traded company in 2014. Both companies have their roots in APX Alarm Systems, a company co-founded in 1999 by former BYU student Todd Pedersen.
Shares in Vivint Solar peaked at $15.85 per share in July 2015 but declined sharply in the year following, dropping as low as $2.24 a share in May 2016. On Friday, Vivint Solar stock closed at $3.25 a share for a market capitalization of about $373 million.