NEW ORLEANS The State Licensing Board for Contractors fined Sader Power Enterprises this week for operating without a license since December, when the state notified all solar panel installers that they must have a contractor's license and solar classification to sell or lease systems.
The action by the state board is the first taken against one of the two largest solar panel installers in the state, and it comes as Sader struggles to stay afloat in a rapidly changing industry. The State Legislature voted last summer to phase out lucrative tax credits that leasing companies like Sader rely upon to finance their business.
Meanwhile, a move is afoot by some utility companies to cut the legs out from the solar industry by trying to eliminate or drastically limit net-metering. Net meters allow solar customers to 'bank' excess power produced by their panels so they can pull it back off the grid later without having to pay for it.
Sader's founder, Jon Sader, projected an image that all was well, even while he laid off dozens of employees, failed to meet payroll and shut down operations for months and fell behind on about 650 installation jobs.
The company was a New Orleans Saints patron sponsor last fall, airing commercials during each football game with Sader touting his company's strength. At the same time, internal emails obtained by Eyewitness News show that Sader was forced to stop paying employees for the 'survival' of the company.
Sader, a Michigan native, opened a new operation in Detroit in October. That same month, just as he laid off real installers here in Louisiana, he paid young women called 'the RAQ girls' to show off his patented fast-installation system at a Chicago trade show, appearing on a Chicago morning show to brag that his method could cut a weeks-long process down to under an hour.
Sader has not agreed to go on camera with us for months, but said in a telephone interview in December that the federal government shutdown, which ran from Oct. 1-16, was to blame for his cash-flow problems because it had kept his company from collecting crucial federal tax credits.
Still, internal emails in October and November showed that Sader expected to be back to normal in late October or November, but instead, his own Louisiana shutdown lasted until January.
Sader pleaded no contest to doing business without a contractor's license on Thursday. The $8,000 fine addressed only three installation jobs performed by Sader. But Sader boasts of having about 2,500 customers statewide, and says the company has been working since January to catch up with the massive installation backlog.
And customers who signed contracts more than seven months ago, and put down hundreds of dollars for deposits, are still waiting.
'I tried to contact them on numerous occasions,' said Melinda Duncan-Nolen, owner of McDonald Sanitation Services near Thibodaux. 'I got an answering machine with a full voicemail and could not get in touch with them.'
Duncan-Nolen paid Sader $250 in August and has contracts on two different homes. Another customer, Mario Mannina of Gretna, paid a $100 deposit in August. Neither can get a call back about their installation and Mannina said Sader's already cashed his check.
Both are worried about Sader's ability to survive to perform maintenance on the panels over the 20-year contract and what might happen to their systems if Sader doesn't survive that long.
'I am very concerned,' Duncan-Nolen said. 'That's my home. I worked hard to get that house. It's almost paid off and I'm about to put solar panels on top of it and I don't know if this company's going to be around for the duration of the contract.'
Both Duncan-Nolen and Mannina said Sader laid off the salesmen they were dealing with.
'They called him, said he was laid off,' Mannina said. 'He went to the Sader solar office on Chef Menteur Highway, the new office, and the gates were padlocked, all the installation vans were parked in the yard and the warehouse was chock full of solar panels.'
A class-action lawsuit was filed against Sader in federal court last month, alleging the company lied about the benefits of its systems and withheld key information. Sader has yet to answer those allegations in court.
The New Orleans Advocate also reported that the state Attorney General is investigating alleged unfair trade practices by Sader. Jon Sader told WWL-TV he could not comment on that 'because there are additional companies named in the allegations.'
It's unclear why that would prevent Sader from addressing the allegations against his firm.
Meanwhile, Sen. J.P. Morrell, D-New Orleans, says he's gotten a litany of complaints from customers about the actions of several leasing companies. He has filed legislation that would criminalize fraud by solar installers, correcting an ambiguity in current contractor fraud statutes.
Morrell says the phase-out of state tax credits is a major concern, and consumers need to be protected.
'A concern that's been brought to my attention on numerous occasions is that these leasing companies are kind of front loaded, because they're pulling down the tax credits -- that's how they're making their money,' Morrell said. 'And once the tax credit dries up what's the incentive for leasing companies in particular to stay in the state?'