SAN JUAN, Puerto Rico – After Hurricane Maria ravaged Puerto Rico’s power grid and plunged the island into 11 months of darkness, local leaders and activists vowed to start shifting the Caribbean island toward distributed renewable sources, like solar power, and energy independence.
But the Texas-based company that owns the majority of the residential solar market in Puerto Rico has been plagued by hundreds of complaints – from misleading clients to failing to deliver on cheaper electric bills – and accused of running a virtual solar monopoly that could hamper the island’s transformation of its energy sector.
This month, the Puerto Rico Energy Bureau, an oversight agency, released a scathing report against Sunnova Energy Corp. confirming clients’ complaints and directing the Houston-based company to fully disclose information on the services it offers customers. The bureau said 436 customers filed complaints against the company.
- Customers thought they were agreeing to a credit check but instead had signed up for a 25-year contract with Sunnova.
- Sunnova misled customers on potential savings with their solar panels.
- Sunnova didn’t fully reveal costs of solar panel financing to customers.
“Sunnova’s practices during the contracting process are not consistent with the obligations that power companies have” under Puerto Rican law, the report said.
Sunnova, which has 20 days to reply to the report, denies the allegations and is preparing a detailed rebuttal to the Energy Bureau’s claims.
“Sunnova strongly disagrees with the allegations in the recent PREB report,” the company said in a statement. “We take these matters very seriously and are committed to working in good faith to resolve any and all valid issues.”
A joint investigation by the Center for Investigative Journalism in Puerto Rico and USA TODAY found wide-ranging cases across the island in which clients felt they were misled on their solar panel systems and entered costly arrangements they couldn’t afford. Another widespread complaint: Their solar panels didn’t work after Hurricane Maria.
Sunnova leases its solar panels to customers and uses local contractors to install them.
Madeline Batista of Naguabo, in the southeast part of the island, said she signed a contract with Sunnova in 2014 to buy solar energy and rent 16 photovoltaic panels. Her bill, just for the panels, was $98 a month for 25 years, with an additional payment of about $60 a month to the Puerto Rico Electric Power Authority, or PREPA. Her monthly electric bill has not gone down, she said, even though her power consumption has remained the same.
“If I can get out of this contract, it would be wonderful,” she said.
Batista left Puerto Rico after Hurricane Maria to live with a son in North Carolina, but her husband, Rafael Rivera, stayed behind to continue paying for the solar panels, she said.
“That contract was very abusive,” she said.
Puerto Rico’s electrical system has been in a state of disrepair for decades and controlled by PREPA, a public corporation that controls energy generation and distribution on the island. It is in the midst of bankruptcy proceedings in federal court.
Sunnova, which has 65,000 solar customers in the U.S. and its territories, began selling solar panels in Puerto Rico in 2013 as an attractive alternative to costly PREPA services. The company quickly became the island’s solar leader. Today, it has about 10,000 residential solar customers in Puerto Rico – or more than 90 percent of the total residential solar market on the island.
Complaints against Sunnova quickly started piling up at the Independent Office of Consumer Protection, known by its Spanish acronym OIPC, a consumer advocacy agency that monitors energy companies. The complaints were mainly related to lack of savings promised by Sunnova, according to Jose Perez Velez, former OPIC director. By 2017, OPIC had registered more than 1,000 complaints related to Sunnova systems.
Then, on Sept. 20, 2017, Hurricane Maria blasted onto the island and rendered the power grid – and many Sunnova panels – useless for nearly a year. Maria’s powerful gusts damaged at least 80 percent of the transmission and distribution systems, according to PREPA. The vast majority of residential solar systems done by Sunnova are grid-connected and lack batteries for energy storage. When the grid goes down, so do the solar systems.
The lack of power on the island was crippling for Puerto Ricans recovering from Maria and was attributed to many of the estimated 2,975 deaths from the storm as sick residents went without ventilators or dialysis machines.
Lydia Rosa of Carolina, just outside San Juan, was stunned when her 30 Sunnova solar panels went dormant after Maria. She believed the company would right the wrong by upgrading her to a battery storage system that would allow her to switch out of the grid if it went out. When she called the company, Sunnova offered her a 13.5-kilowatt-hour (KWh) battery at $100 a month for 10 years, she said.
“I couldn’t absorb that additional cost on top of the payments to Sunnova and PREPA,” Rosa said. “I was not going to get into that kind of arrangement.”
A Sunnova representative told her the company does not allow its customers to buy batteries from from other suppliers, she said. “Puerto Ricans were treated like idiots,” Rosa said.
Knowing Puerto Rico is an island prone to strong storms and the vulnerable state of its power grid, Sunnova officials should have more aggressively sold customers solar systems with a battery source that could be used off-grid, said Tom Sanzillo of the Cleveland-based Institute for Energy Economics and Financial Analysis.
“You have a basic model that had many things wrong,” he said. “Then the hurricane just ripped it open and showed it was a completely unusable product.”
Kelsey Smith, a Sunnova spokeswoman, said the “solar-plus-storage” system wasn’t widely sold in Puerto Rico because the battery technology hadn’t been fully developed in the years the company was selling the systems and customers couldn’t readily afford the higher costs.
“The technology, market and supply wasn’t where it needed to be,” Smith said. “Moreover, as people had never been through a storm like Maria before, with such a long period of power outage, demand for batteries was not there.”
Smith said that after Maria, Sunnova technicians descended upon Puerto Rico and fixed any Sunnova systems damaged by the storm, at no additional cost.
Today, the company sells only the “solar-plus-storage” systems in Puerto Rico.
“We’ve been committed to Puerto Rico since our first customer in 2013, and we’re committed to continuing to do just that,” Smith said.
John Rodríguez, a retired U.S. Army sergeant from Las Piedras, about 30 miles southeast of San Juan, said he also was surprised when his Sunnova system didn’t work after Hurricane Maria.
He pays about $250 a month, including $182 to Sunnova, in a bill that increases each year, and another $3 a month to PREPA, he said.
“I am paying more for power even though my energy consumption … has remained the same,” Rodriguez said.
He said Sunnova officials offered him batteries that would allow him to keep his lights on even if the grid goes down for an extra $100 a month for 10 years, but it’s a cost he’s unwilling to take on.
“Basically, I am not ready for the next hurricane,” he said. “I will need to use a fuel-powered generator if the power goes out.”
Sunnova’s rush to corner the residential solar market in Puerto Rico misled customers and installed systems vulnerable to storms, said Cecilio Ortiz Garcia of the National Institute for Energy and Island Sustainability at the University of Puerto Rico. It also created a private monopoly that will slow efforts to transform Puerto Rico into a solar, energy-independent island, he said.
Competition between solar providers is key because it lowers costs, improves quality and makes renewable energy more accessible to more homes, Ortiz said.
For now, the future of grid-tied solar homes in Puerto Rico rests largely in the hands of Sunnova.
“Their market model was not optimizing for energy independence,” Ortiz said. “We basically traded one monopoly for another.”
Eliván Martínez Mercado reported from Puerto Rico and is an energy journalism fellow at the Energy Institute of The University of Texas at Austin. Follow him on Twitter: @Elivanmartinez, or reach him at: email@example.com.
Rick Jervis reported from Texas. Follow him on Twitter: @MrRJervis, or reach him at: firstname.lastname@example.org.
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