Class Action Suit Says Sunrun’s Electricity Price Ain’t Right

A Greentech Media piece picked up an interesting item: a recently filed class action lawsuit accusing residential solar provider Sunrun of making deceptive statements about the rising cost of electricity to make its solar installations more attractive to consumers.

The complaint, filed in Los Angeles Superior Court, alleges that Sunrun’s central marketing message is that increases in electricity prices will result in cost savings for customers who have Sunrun solar systems installed at their homes. But, according to the complaint, Sunrun “deceptively states with certainty something that is inherently unknowable.”

Class plaintiffs quote the following excerpts from Sunrun’s web site:

You already pay a lot for electricity today. In the future, you’ll pay even more. Nationwide, electricity rates have been increasing 6% per year over the last thirty years. When you go solar, you take control of your electricity costs and opt out of utility rate increases. You’ll save money with solar by locking in a lower rate for your electricity than you will pay for the next thirty years. Many Sunrun customers start saving money right away.

According to the complaint, the representations that consumers would save money due to increasing electricity prices was misleading because, for example, energy prices at Southern California Edison have leveled off in recent years. The complaint also cites a number of articles reporting that natural gas prices have fallen considerably recently due to increased shale gas production.

Perhaps most salient is this short piece on CleanEnergyAuthority.com, quoted in the complaint, in which Jeff Mayer, the CEO of UK company Soluxe Solar says:

Most leasing contracts are sold on the assumption that the consumer will save money because utility costs are expected to increase over the years. But, the truth is that utility prices have been flat to down and consumers are being misled.

According to the complaint, customers whose current electricity prices are not as high as estimated by Sunrun are already losing out, and those whose electricity prices do not rise as expected in the future will also experience this cost disadvantage. Ultimately, however, even if Sunrun’s customers do not end up paying more for solar, the company’s unequivocal marketing message is still false and misleading:

But whether the cost disadvantage is experienced or not, the promise of a system sure to result in cost advantage was false when made and likely to deceive consumers into leasing a system they otherwise would not have.

One difficult question is how to classify this case. At bottom, it’s really about economics, not environmental benefits, so greenwashing is not a comfortable fit. But to the extent the cost savings at issue flow from renewable energy equipment, perhaps it’s not unreasonable to label it as some form of greenwashing.

The alleged deception here relates to electricity prices generally, which are mostly driven by fossil fuel production. So the allegations are probably closest to reverse greenwashing, which I define as allegedly false or misleading statements not about environmental benefits, but about the negative environmental impact of certain products or services (keeping in mind the caveat, of course, that the adverse impact alleged here is economic, not environmental).

For more on reverse greenwashing, see my initial post on the ChicoBag case here.

Eric Lane is a patent attorney at McKenna Long & Aldridge LLP in San Diego and the author of Green Patent Blog. Mr. Lane can be reached at elane@mckennalong.com