PG&E, Sungage, Others Facing Class Action Lawsuit Over Alleged Solar Panel Financing Scheme

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A proposed class action lawsuit accuses utility giant PG&E Corporation, subsidiary Pacific Gas & Electric Company and several other entities of luring consumers into taking out loans for solar panel installation with the false promise of no finance charges and easy transferability.

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The 18-page lawsuit claims that PG&E, solar financing company Sungage Financial, New York-based NBT Bank and installer Sunmade Energy operate a “bait-and-switch” scheme whereby consumers are promised a zero-interest loan that is “easily transferable” to future home buyers. The suit alleges that the companies instead inflate the total loan amount to include massive undisclosed finance charges and unrelated fees, which are deliberately misrepresented in consumers’ contracts in order to hide their true nature and avoid federal disclosure requirements.

In addition, the case contends that the loans are essentially non-transferable. Per the complaint, when a consumer tries to sell their home, they discover that the companies require potential buyers to qualify for completely new loans at substantially higher interest rates—specifically, the “current rate + 5.00% or 9.99% (whichever is less).” This renders the property “virtually unsellable,” as the rate is so high that “no home buyer would agree” to it, the filing argues.

According to the PG&E solar panel financing lawsuit, the alleged scheme attempts to exploit federal tax incentives that are meant to encourage movement toward clean energy.

“This systematic deception has trapped families in their homes, saddled them with fraudulent debt, and perverted a federal program designed to help the environment into a vehicle for corporate enrichment at taxpayers’ expense,” the suit charges.

The case was filed by a California resident who claims he was one of thousands of homeowners defrauded in the alleged “solar power finance scheme.” The plaintiff says he was informed by a Sungage representative that while the actual solar panel system cost was $63,000, the companies were financing his system for $82,136.04.

Per the complaint, this means that “a substantial portion of his loan proceeds—approximately $20,000 of the total $82,136.04 loan amount—is an undisclosed finance charge paid to Sungage rather than applied to solar equipment or installation.”

The filing alleges that the hidden charges are not properly disclosed in consumer loan documents, in violation of the federal Truth in Lending Act (TILA).

The alleged misrepresentations surrounding the purportedly “predatory” loans have left consumers like the plaintiff with inflated debt, threats to their credit score, loss of tax credit benefits and other financial injuries, the suit contends.

The lawsuit looks to represent all individuals in the United States who, since 2018, entered into solar financing agreements with Sungage Financial and/or NBT Bank; received TILA disclosure statements showing zero-percent annual percentage rates and/or no finance charges while substantial portions of loan proceeds were diverted as undisclosed finance charges; had loan amounts that exceeded the actual cash price of their solar projects by more than $10,000; and had UCC-1 Financing Statements or other liens recorded against their property as a result of such transactions.

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