As solar power gains popularity for its affordability, more homeowners consider installing panels. However, with increased interest comes a rise in solar scams. To prevent financial losses, it’s crucial to spot red flags and research thoroughly before choosing a solar installer. In this blog, we’ll learn about solar scams and what solar panel companies to avoid.
Scams by Solar Panel Companies to Avoid
Before learning what solar panel companies to avoid solar scams, you’ll need to get an understanding of what types of solar scams are prevalent. Here are some common scams to be aware of:
1. Fake Solar Companies
Some scammers create fake solar companies, selling solar panel systems without any intention of installing them. They may ask for a big upfront payment and then vanish without doing any work.
2. Identity Theft Scams
Scammers, whether from fake solar companies or posing as solar representatives, might trick you into filling out fake solar paperwork. They could then use your personal information for identity theft.
3. Solar Lease or PPA Scams
While leasing or using a Power Purchase Agreement (PPA) for solar panels isn’t inherently a scam, these contracts can be challenging to break. Be cautious, as they may lock you into an unwanted monthly payment for a solar array you don’t own. Always understand the terms before committing.
4. Misleading Contracts
Dishonest solar companies might install panels but present contracts that overcharge you or release them from responsibility if the system has issues. Always check contracts carefully to avoid problems.
Knowing about these scams helps protect your assets and prevents you from falling victim to deceptive practices in the solar industry. Now, let’s backtrack to our main focus and see what are the worst solar companies.
Also See: Is Hawaii Solar Tax Credit Refundable?
Red Flags to Identify Worst Solar Panel Companies Scams
With the boom in the solar industry, there is also a boom in solar scams. Be careful and watch out for the following red flags, they’ll help you identify the solar panel companies to avoid:
1. Deceptive Free Solar Panel Ads
If you’ve been exploring home solar options, you’ve likely encountered ads on platforms like Facebook or YouTube claiming free solar panels. While attention-grabbing, these ads are often deceptive. The underlying truth is a concept known as third-party ownership, where a solar company installs panels for free, but you enter into a lease or energy purchase agreement. Be cautious of long-term contracts and escalating payments, especially in solar leases and PPAs that may last over 20 years.
Also See: Leasing Solar Panels vs Buying: What is Better?
2. False Urgency: Programs Ending Soon Claims
Beware of solar salespeople claiming that special programs are ending soon to pressure you into a quick decision. While some incentives have expiration dates, the federal solar tax credit, a major incentive, was extended until 2032. Be skeptical of outdated claims and verify information about state and local incentives from reputable sources.
3. Utility Company Impersonation by Salespeople
Unfortunately, some solar salespeople impersonate utility company representatives, using misleading words to gain trust. If someone at your door claims to work with your utility company on a solar program, exercise caution and verify their authenticity through official channels.
4. Immediate Sign-Up Pressure: Limited-Time Deals
Similar to the tactic of expiring programs, be wary of the solar panel companies to avoid scams where salespeople pressure you into signing immediately for a limited-time deal. This urgency may indicate a lack of transparency and potential overcharging. Take your time, obtain multiple quotes, and carefully assess each offer.
5. Misleading Federal Solar Tax Credit Information
Understand the federal solar tax credit correctly. It is a non-refundable tax credit, not a cash rebate. Some misleading information may suggest receiving a substantial check from the government, but this is conditional on factors like prior tax payments. Seek guidance from trusted financial advisors before committing to solar loans and understand the tax credit’s nuances.
Also Read: Can You Claim Solar Tax Credit Twice?
6. Inflated Electricity Price Increase Estimates
While home solar can be a wise investment, be cautious of solar companies projecting excessive annual electricity price increases, especially beyond 3%. Verify the data supporting these estimates and compare them to industry averages. Misleading companies may inflate savings to persuade you to sign a contract.
7. Incomplete Information in Quotes
When evaluating solar quotes, ensure the company provides comprehensive details, including model numbers of proposed solar panels. Some quotes may lack specificity, merely mentioning the brand. While model numbers can change before installation, signed contracts should guarantee a certain panel set. If changes occur, the installer should justify and offer appropriate adjustments. This is one of the common red flags to identify solar panel companies to avoid scams.
8. Overpriced Equipment
Such companies replace high-efficiency solar panels with cheaper ones from abroad. Homeowners may think they’re getting top-notch panels without verifying the actual products. Using lower-quality panels enables solar companies to overcharge for installations and boost their profits.
Protect yourself from this solar scam by researching the per-watt cost of solar panels in your area. This helps you understand the average cost, ensuring you don’t pay more than necessary.
9. Improper Installation
Solar panels’ performance relies on proper installation. Some companies may cut corners, risking your investment. This can happen through poorly designed systems or by hiring solar installers lacking roofing experience. National solar companies often use generic designs, leading to inadequate energy production and poorly positioned panels. Lack of roofing expertise can result in improper sealing, causing roof leaks. Choose a reputable and experienced solar installer, ensuring proper design, installation, and protection.
10. High-Pressure Sales Tactics
One common complaint against subpar solar companies involves the use of high-pressure sales tactics, forcing customers to make hasty decisions. These tactics may include persistent calls, scare tactics, door-to-door visits, or making unfounded claims about solar benefits. Companies employing such methods prioritize sales over delivering quality service. These are the red flags to identify solar panel companies to avoid scams.
Also See: Do You Still Have an Electric Bill With Solar Panels?
11. Unclear Product and Service Descriptions
Another warning sign is a company providing vague or confusing information about its products and services, potentially using complex jargon or making unsupported claims about solar advantages. Reputable solar companies are transparent, offering clear details about their installations, warranties, and expected energy bill savings.
12. Communication Challenges and Lack of Responsiveness
Effective communication is crucial for any home improvement project, including solar panel installation. If a company is unresponsive, challenging to contact, or fails to answer inquiries promptly, it may not be the right choice. A trustworthy solar company ensures easy accessibility and willingly addresses customer questions.
13. History of Lawsuits
A lengthy history of lawsuits is another red flag when considering a solar company to avoid scams. These legal issues could involve poor workmanship, unfulfilled promises, or fraudulent practices. Prior to choosing a solar provider, thorough research into any existing lawsuits or complaints is essential.
Also, check out How to Become a Solar Panel Distributor: Roles, Opportunities and Benefits
14. Forced Leasing Agreements
Beware of solar companies pressuring customers into lease agreements, where monthly payments are required instead of outright purchase. These agreements are often linked to high-pressure sales tactics. While leasing can be beneficial, it’s crucial to comprehend the terms, including lease duration, monthly fees, and penalties for early termination.
15. Fly-By-Night Solar Installers
These are unlicensed individuals or companies offering cheap solar installations. They might use low-quality equipment, provide substandard installations, or disappear after taking your money. Protect yourself by researching and choosing a licensed, local solar company with a reliable history of quality installations. Avoid such solar panel companies to avoid solar scams.
Also Read: 24 Most Common Solar Panel Problems With Solutions
How to Protect Yourself Against Solar Scams
After learning what solar panel companies to avoid, let’s go through the precautions to protect yourself from such companies. Being informed and cautious helps you make wise decisions when exploring solar panels for your home. Follow these tips to protect yourself against solar scams:
1. Learn About Solar Before Getting Quotes
Start with learning about home solar panels and explore topics like panel quantity, payback time, and solar loans.
2. Get Multiple Quotes
Arm yourself with solar knowledge and obtain quotes from different installers. Compare system size, expected energy production, equipment details, costs, incentives, financing options, and warranties.
3. Check Online Reviews and Certifications
Research companies thoroughly. Read reviews on solar websites, and check other platforms and the BBB. Ensure the company and its installers are certified by bodies like the North American Board of Certified Energy Practitioners (NABCEP).
Also Read: Is Solar Worth It in Colorado?
4. Understand Financial Options
Home solar panels are a significant investment. Before deciding, fully comprehend your financial options. Consult with a tax professional to understand tax credits and speak to an investment advisor for a comprehensive financial analysis.
After learning about these precautions, let’s learn how to file complaints against solar panel companies involved in solar scams.
Also See: Unsecured Solar Loan: Empowering Homeowners to Go Green
How Can I File Complaints Against Solar Panel Companies Engaged in Solar Scams?
If you encounter or fall victim to a solar scam, there are consumer protection resources available:
1. Social Media Scams
Flag false or misleading solar advertisements on social media for removal.
2. Federal Trade Commission (FTC) Reporting
Report instances of fraud to the FTC through their website. They will share your report with law enforcers for investigation and legal action against businesses involved in fraud or scams.
3. Department of Justice (DOJ) Reporting
To file complaints against solar panel companies, report fraud or scams in your state or locality to the DOJ. Begin your report by visiting your state’s DOJ website.
4. Legal Assistance
If you’ve been scammed, seek legal advice. You may consider filing a case against the fraudulent company. Check your state’s DOJ website for information on filing a lawsuit or settling a complaint in small claims court.
With this, you have learned that filing complaints against solar panel companies involved in solar scams is quite simple. Let’s finally read about some cases of solar panel scams in Florida and California.
You can take a look at our blog – What Happens When You Pay Off Your Solar Panels?
Solar Panel Scams in Florida and California
Solar panel scams in Florida and California are quite common, as they are in any region where solar energy is popular and incentives are provided. Scammers take advantage of people’s limited knowledge about solar systems, providing misleading information that makes it hard for victims to recognize the scam. Recently following solar scam cases garnered attention in both states:
1. Local Woman Claims Door-to-Door Solar Panel Offer Ended Up Costing Thousands
On February 3, 2023, News4Jax featured Michelle Thompson’s story. Seeking savings during the pandemic, she responded to a door flyer promising reduced electric bills through solar panels. Assured of minimal costs for the first year, Thompson later discovered an undisclosed loan of over $25,000. Despite expecting $15 monthly payments, she was charged $250, impacting her credit score. Jacksonville Area Legal Aid intervened, revealing the absent loan notice.
Many homeowners, misled by door-to-door solar sales, share similar issues, underscoring the need for consumer awareness and protection against deceptive practices in the solar industry, especially those targeting vulnerable populations.
Also See: Understanding Electric Bill Before and After Solar Panels: Changes and Savings
2. Lawsuit Against Tampa Solar Company Accused Of Scamming More Than 400 Customers
On November 7, 2023, various news outlets, including Fox13 and the official website of Attorney General Ashley Moody, reported that legal action was being taken against M.C. Solar and Roofing by Florida Attorney General Ashley Moody. The Tampa-based company is accused of scamming numerous customers, particularly targeting seniors, veterans, and people with disabilities.
The alleged scheme involved promises of federal tax incentives, 25-year warranties, and misrepresented interest rates to entice customers. After securing financing, the company purportedly disappeared without fulfilling the promised work, leaving homeowners facing financial burdens and property damage. Hence, you should be cautious of such solar panel companies to avoid similar types of scams.
3. Ex-California Solar Firm Executive Sentenced for $1B Fraud
On February 1st, 2023, news sources, including AP News, reported that Ryan Guidry, a former executive of DC Solar, received a 6 1/2-year prison sentence and was ordered to pay almost $620 million in restitution for his involvement in a $1 billion fraud scheme. Guidry, who admitted guilt in 2020 for conspiracy and money laundering, was part of the California solar company accused of a Ponzi scheme.
DC Solar, led by founder Jeff Carpoff, falsely promoted mobile solar generator units, deceiving investors like Warren Buffett’s Berkshire Hathaway. The fraud involved approximately 9,000 nonexistent generators. Carpoff received a 30-year prison sentence in 2021.
4. CSLB Issues Statewide Alert on Deceptive Solar Ads
On April 18, 2023, reports from sources like Lake County News revealed that the Contractors State License Board (CSLB) had issued a statewide alert in California regarding misleading solar ads that could result in scams. These deceptive ads, distributed through door flyers and direct mail, falsely suggested free solar programs mandated by Senate Bill 100.
CSLB highlighted the financial risks for homeowners subjected to high-pressure sales tactics, advising consumers to thoroughly research contractors, verify license status, and gather multiple bids before engaging in any work.
Solar is a smart renewable energy investment, yet scams and illegitimate companies exist in the industry. It’s crucial to research thoroughly and be cautious of potential solar scams.
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