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Home Solar Scams and Red Flags

Solar scams are like these red flags

In short: Scammers, fraudsters, and jerks peddling misleading information are everywhere. Unfortunately, they are also in the solar industry. We’ll make sure you can see the red flags, and empower you to make smart decisions about solar for your home.

Before the re-authorization and expansion of the solar investment tax credit in 2008, a small number of dedicated, caring solar companies installed solar panels on homes and businesses. After 2008, the solar industry exploded with new companies. Unfortunately, some of those companies engage in shady business practices, and consumers need to be careful.

In 2017, the Campaign for Accountability reviewed hundreds of complaints to the Better Business Bureau (BBB) about solar installers between 2012 and 2016. Most complaints relate to financial promises which never bore fruit. In a few instances, some customers even reported an increase in power bills after installing solar panels.

Depending on where you live, solar takes a little while to pay for itself. In states with strong solar policy, that’s usually between 6 and 10 years. If your solar salesperson says you can get solar panels for free or break even within a year or two, that’s a red flag.

Let’s take a look at some other signs that your salesperson isn’t on the up-and-up.

How can I tell if I’m being scammed or misled on solar panels? Here are some other things to be wary of:

#1 – Solar websites, installers, or salespeople who promise “free solar”

It’s not free, how would they be in business otherwise? These aren’t non-profits, and other than specific programs to help low-income homeowners, the government isn’t going to make solar “free” for anyone, even if you’re a war hero.

#2 – Salespeople who are not willing or hesitate to answer how much their installations typically cost homeowners in terms of installed dollars per watt

For an average sized 7,000 watt solar system, most installations are completed for between $3 and $4 per watt. So, between $21,000 and $28,000. You should be able to divide your total amount quoted for the install by the number of watts in your system to arrive at a number between $3-$4. Anything significantly higher than $4, and you might consider asking where they are planning on taking their next expensive vacation on your dime.

#3 – Salespeople who seem rushed, or hurry you to sign papers for something small and inconsequential, such as a “roof measurement”

Why on earth would you need to sign anything for a dude to measure your roof? There has been evidence that these seemingly innocuous requests have actually been linked to 20-year solar contracts. Be careful.

A special note on leasing, $0 down panels, and Power-Purchase Agreements

Solar leases or Power-Purchase Agreements (PPAs), can be a great way for low and moderate income families or for those who can’t secure a loan to go solar. Under a PPA, you don’t actually own the solar panels. Your solar company offering you a PPA will install and own the panels on your roof, and allow you to use them for your energy needs. You’ll pay that company a monthly fee to own the electricity that pumps into your home, not the panels.

While you can certainly begin generating your own power immediately, and save money on your power bill immediately under such arrangements, you’ll also be immediately paying a monthly installment for the panels — whether through a PPA, solar rental agreement, or a lease. For most of these arrangements, your new power bill amount plus this payment will still be less than your power bill without solar.

In this case, your solar installer is able to benefit from any state or federal tax incentives and rebates, not you. This is how they are able to offer you such an interesting deal in the first place, where you don’t need to pay anything down, and going forward you have a lower power bill. If you can take those credits yourself, you should look into getting a home equity loan, or a solar loan and own instead of rent.

Another thing to watch out for is that some PPAs are structured to increase your monthly rent on the panels every year. Average annual solar panel rent increases of around 2.5% are typical under a leasing arrangement.

For more detailed information, head on over to our PPA and solar leasing guide.

Other tools to help you make smart solar decisions for your home

One last thing to keep in mind

While even some salespeople will admit they’ve worked alongside problem people who are more money motivated than service and purpose motivated, the vast majority of our industry is made up of good people trying to help others make smart decisions – even if that means recommending that solar isn’t right for you.

Last modified: September 4, 2019

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shashi kumarBen ZientaraJOSEPH ENNIS Recent comment authors
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shashi kumar
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Thanks for the wonderful information..

JOSEPH ENNIS
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JOSEPH ENNIS

A solar PPA is the way to go.

Ben Zientara
Admin

Not for everyone, but it can be! A PPA is like a balancing act. You trust the system owner (solar company) to keep its panels and your home well-maintained and operating properly, and you pay for it. They take all the incentives, and hopefully provide you with an affordable way to get solar energy for the long haul. When it works, it works well, especially for people who can’t take state and federal solar tax credits. When it doesn’t work, PPA customers can end up locked into long-term contracts paying the same or even more money than they were before… Read more »

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