Owners of buildings that generate onsite renewable energy, with solar panels or otherwise, and sell the renewable energy credits (RECs) should not claim the building “uses renewable energy.” The term may be deceptive in that circumstance.

Similarly, building owners should not should not claim they have purchased RECs if the law already requires the activity that is the basis of the renewable energy. 

The uncertainty of the solar panel market and the fast changing industry that is in large measure supported by RECs, constantly raises questions about what marketing claims a building owner can make about renewable energy installations on their property.

The Federal Trade Commission issued revised “Green Guides”, 16 CFR Part 260, in late 2012 that are designed to help ensure that claims made about the environmental attributes are truthful and non-deceptive under Section 5 of the FTC Act, 15 U.S.C. 45.1. The Guides are administrative interpretations of the law. Therefore, they do not have the force and effect of law and are not independently enforceable. The FTC, however, can take action under the Act if a marketer makes an environmental claim inconsistent with the Guides. In a recent post to this blog I wrote FTC To Ramp Up Enforcement of Environmental Claims.

The Guides include specific language with respect to carbon offsets,  .. 

(a) Given the complexities of carbon offsets, sellers should employ competent and reliable scientific and accounting methods to properly quantify claimed emission reductions and to ensure that they do not sell the same reduction more than one time.

(b) It is deceptive to misrepresent, directly or by implication, that a carbon offset represents emission reductions that have already occurred or will occur in the immediate future. To avoid deception, marketers should clearly and prominently disclose if the carbon offset represents emission reductions that will not occur for two years or longer.

(c) It is deceptive to claim, directly or by implication, that a carbon offset represents an emission reduction if the reduction, or the activity that caused the reduction, was required by law.

The Guides offer an example:

An online travel agency invites consumers to purchase offsets to “neutralize the carbon emissions from your flight.” The proceeds from the offset sales fund future projects that will not reduce greenhouse gas emissions for two years. The claim likely conveys that the emission reductions either already have occurred or will occur in the near future. Therefore, the advertisement is deceptive. It may not be deceptive if the agency’s website stated “Offset the carbon emissions from your flight by funding new projects that will begin reducing emissions in two years.”

As onsite renewable energy, including solar installations, become more common so too will questions become more common about what can be claimed about those installations.

All are invited to the University of Baltimore School of Law symposium “Can Green Building Law Save The Planet?” on March 26 at 5:30 p.m.  Susan Dorn, general counsel of the USGBC, Abbey Hopper, director of the Maryland Energy Administration, and others will be presenting with me. For details and to RSVP.