FOX 8 Defenders: Solar panel financing lawsuit

FOX 8 Defenders: Solar panel financing lawsuit

NEW ORLEANS, LA (WVUE) - A New Orleans law firm files another class action lawsuit in the wake of what some call devastating changes to the state's solar panel tax credit program. This latest suit centers around the credit company consumers used to finance their solar energy systems.

"Some of these consumers are talking about possibly declaring bankruptcy. They're on a fixed income. They are taking out home equity lines of credit in their house to pay off this finance agreement," said Larry Centola, a plaintiffs' attorney who filed the class action complaint last Friday against GreenSky, LLC and SunTrust Bank, Inc.

It alleges Louisiana solar companies acted as GreenSky's agent when they presented consumers with 18-month interest-free bridge loans by GreenSky, a partner in the loans with SunTrust Bank.

"The finance agreements that were signed were interest-free for one year, and some of these consumers were promised by the solar company, 'Don't worry because...when this finance agreement comes due, you will have your tax credit from the state so you can take your tax credit to pay off your finance agreement,'" explained Centola.

The suit claims rather than being interest-free, the loan with GreenSky "actually incurred interest from the moment of purchase," an "interest rate of at least 17.99 percent."  It also mentions that if a consumer paid off the loan within 18 months, the interest adding up over all of that time would be waived.

"So these consumers thought they would have money from the state tax credit to pay the finance agreement. Now they don't, and now they owe a considerable amount of interest that they thought that they wouldn't owe. So that's where the panic sets in," Centola said.

Panic did set in over the summer for consumers Kevin Harvey of Ponchatoula and Crystal Viator of Belle Chasse.

"I really don't know what to do. Do I take out another loan to pay off this loan? Do I file bankruptcy?" asked Viator back in July when the FOX 8 Defenders interviewed both consumers.

The FOX 8 Defenders reported both consumers took out loans to finance solar panel systems, expecting that tax credits from the state would cover half the cost.

"They (solar companies) outline it for you, and they tell you what you owe. They tell you what you're supposed to get back from federal, and they tell you what the state owes you, and that is a guarantee at the time I bought the system," Harvey said.

In July, the FOX 8 Defenders learned lawmakers made significant changes to the solar tax credit program mid-year, after Harvey, for example, got his system in 2015. They capped the amount of credits that could be granted in a fiscal year. The changes also required credits to be granted on a first-come, first served basis, based on the date the tax return is filed, not on the installation date.

Over the summer, it was uncertain whether Viator or Harvey, whose solar systems were installed before the new law created the credit caps, would even see a refund. After a long wait and a lot of stress, both say they finally got refunds.

But Centola estimates hundreds of other consumers across the state won't get the credit because cap limits were met before many claims were even filed. Now consumers face maturing loans with high interest rates.

Alleging deceptive practices and a violation of state and federal law, the suit says solar companies - while they were aware state tax refunds were not guaranteed - continued to promise the tax credits, giving consumers an incentive to invest and enter into what it calls onerous finance agreements. The suit spells out, "GreenSky is vicariously liable for the acts and omissions of its agents, the solar companies."

Meantime, Centola said his firm has heard from nearly 100 Louisiana families in reference to a separate class action suit against the secretary of the Louisiana Department of Revenue.

"Our suit against the state is that the people that purchased prior to June 19th 2015 had the right, and the state subsequently took it away from them," Centola told us.

He says the state's measure to cap the solar energy tax program mid year was an unconstitutional taking of a vested property right.

The FOX 8 Defenders have reached out to both defendants in this latest suit, GreenSky and SunTrust Bank, but haven't heard back.

While solar companies aren't named as defendants, they are mentioned throughout the suit. The President of Gulf States Renewable Energy Industries Association, the trade group that represents solar firms in Louisiana, tells us in a statement that resources are available to taxpayers online through

Jeff Cantin also says taxpayers affected by the credit change have a limited time to file an appeal with the State Board of Tax Appeals. For many, he said the deadline is as early as next Friday, Oct. 14.

If you've got a consumer concern, call the FOX 8 Defenders staffed with volunteers from the National Council of Jewish Women at 1-877-670-6397 or you can fill out an online complaint form

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