Editor's note: This is the first in a three-post installment on solar leasing

The CEO of a Connecticut-based solar installation company distributed a firm warning to solar industry leaders in late August that they need to “clean up their act.”

Jeffrey Mayer, CEO of Soluxe Solar, issued a press release saying he expects the solar industry will be a “falling star” if leasing companies and some of his other competitors keep making what he says are false claims about cost savings.

He said third party solar operators claim in their marketing materials that electric utility prices are going up 5 to 7 percent a year.

“That’s just not true,” he said.

Prices, since natural gas reserves spiked in 2008 have been flat or even down in some areas, he said.

Mayer is not alone in his concern about possible false advertising of cost savings.

Seattle-based consumer rights law firm Hagens Berman announced in the spring that it was investigating SunRun in preparation for a possible class action lawsuit on the issue.

There has been no lawsuit filed, said SunRun spokeswoman Susan Wise.

And she doesn’t expect that there will be one, because SunRun and the rest of the industry is not doing anything wrong, she said.

Third party solar is the fastest growing segment of the US solar industry and accounted for more than 70 percent of new home solar installations in 2011.

Growing model

There’s a reason for the popularity of the solar leasing model, which SunRun calls solar service and power purchase agreements, Wise said.

“The bottom line is – more people are hearing about it,” she said. “It lets people lower their utility bill, pay a predictable electric bill. They know exactly what they’re payments are going to be going into the future and they can do it with no money upfront.”

That no or little money down is the real allure of solar leasing. And that’s what has led to the model’s rapid growth.

“The highest growth is happening in lower and middle-income zip codes,” Wise said.

That’s real market expansion, she said.

“We offer this because we feel it’s a good value proposition,” she said.

Story continues in part 2 to be posted on Monday September 17th - part 3