What are Solar Panel Scams?
Table of Contents
- By Steven
- Published: May 20, 2024
- Last Updated: Jun 24, 2024
The sun produces enough energy every 90 minutes to power the world for a year. Despite this, in 2020, only around 0.2% of solar’s potential power production was utilized. Many organizations and nations have planned to move toward solar power. Still, consumers must have individual wealth, knowledge to vet potential installation companies, and wisdom to recognize and avoid potential traps.
Additionally, with a residential solar system costing, on average, between $10 and $20k, it’s no wonder consumers are always looking for deals to install and produce their power. Unfortunately, these same deals are also vital tools for scammers, luring potential victims into their webs.
So, is solar a scam? Solar panels, their benefits, and the programs that allow consumers to install them are real—but this doesn’t mean they are easily obtained. The residential solar panel installer industry is rampant with scammers; consequently, residents and business owners must thoroughly verify and authenticate the company they are interested in working with. It’s the only way to avoid falling victim to solar panel scams.
What is a Solar Panel Scam?
Solar scams come in many forms. Generally speaking, scams are those activities that deceive another into sharing information or assets. Solar panel scams, then, are those fraudulent activities that victimize consumers and businesses through the guise of authentic solar salespeople and installers. Said another way, solar scams exploit the growing interest in renewable energies to deceive consumers seeking to invest in solar technology. These scams have many forms, as solar installation processes have many pitfalls that can hide a scammer. The most common signs of a solar scam include:
- Unsolicited cold calls to a residential home or place of business
- Unsolicited door-knocking on residential homes and small businesses
- Pressurized sales tactics (i.e., limited-time deals, bonuses, extras)
However, even if a consumer relies on the fact that they contacted the installation company, there is never a guarantee they aren’t speaking with scammers; this is why it is essential to properly verify a company’s history before reaching out to them for things like quotes. If the company isn’t properly verified and does turn out to be scammers, their victims may have lost thousands by the time they realize they’ve been fooled.
Common Types of Solar Panel Scams
Every junction of a solar panel purchase and installation has the potential for scammers to obtain profits. As outlined above, some scams start with unsolicited communication, like a phone call or door knock; others are more devious. Scammers might lock their victims into challenging lease agreements to use the panels. They could lure victims into their traps by promising government-funded rebates. They almost always use pressurized sales tactics, as their “little push” shoves consumers into compliance. Some scammers even create entire companies to disguise their activities—only for the whole company to disappear upon getting what they want.
Lease Agreements Scams
Some solar panel scammers might use complex lease agreements to trick consumers into unfavorable terms. Like other types of fraudulent leases, these scams function by locking the consumer into a contract. As long as they pay the required amount, they can continue to use the solar panels and additional services. However, the scams usually appear when the written terms cost consumers more than they should.
Government Rebate and Incentive Scams
Many door-knocking scammers use the promises of a government rebate or another incentive to lure consumers into getting solar installations. They may claim that if the consumer purchases panels that year, they can obtain the total cost back from the government through their taxes or refund. Others claim there are community or individual benefits for the installation, like deals or significant breaks on utility costs.
High-Pressure Sales Tactics
Phone calls and door-knocking scams often involve high-pressure sales tactics. These tactics pressure consumers into making immediate decisions without proper research or knowledge. Many scams include limited-time deals and false advertisements, while other schemes might involve emotional pressure (i.e., “You’re going to cost me my job”).
Non-Existent Companies
Particularly insidious scams are those that disappear after collecting payment. They trick consumers into paying them money and leave without fulfilling their obligations. They leave the consumer without solar panels or recourse—except for reporting the crime. Non-existent companies can be challenging to uncover; nevertheless, consumers must try.
How to Spot a Solar Panel Scam
Although the nuances of scams differ, there are still recognizable, predictable signs that betray a scammer’s intentions. In learning about these signs, consumers and business owners learn more about the attack vectors of solar panel scams, which allows them to better identify and respond to these threats. Apart from the unsolicited interactions (which should be treated as a scam every time it happens), there are also many other indicators of a scam, for example:
- When the terms are too good to be true.
- When there is a lack of credentials or verifiable claims.
- When the contract uses complex jargon.
- When aggressive salespeople act as a company’s representative.
Too Good to Be True Offers
Sure signs of a scam are exaggerated benefits, unrealistically low costs, and offers that are just too good to be true. Solar panel leasing and government rebate scams are particularly susceptible to this sign, as they lure consumers through inflated benefits; consequently, whenever a salesperson pitches a product that is too great, cautiously back away.
Lack of Credentials
Licenses and certifications are more than a receipt of purchase. They display that the company or contractor it is connected to has authentic experience and history associated with them. The lack of these credentials does not mean the company is “new” or “lapsed” a few months ago—it means they lack experience, professionalism, and the credentials to complete the work they are claiming.
Vague Contract Terms
Some scammers might use unclear terms, fees, or clauses to extract money from their victims “legally.” Like many senior scams, these schemes function by the malicious actor, confusing their potential target and forcing the victim to rely on them. If the consumer doesn’t understand the terms they are agreeing to, they cannot fully grasp the outcomes and consequences of their contract.
Pushy Salespeople
Another immediate indicator that something is wrong is the behaviors of the sales representatives. Consumer fraud schemes may use impersonation to disguise themselves as customer representatives, but these scams are only effective until the salesperson pushes too hard for the bite. The more aggressive and overbearing they are, the more likely they are part of a sophisticated scam that only works if the victim is compliant.
Steps to Take Before Investing in Solar Panels
Before committing to any solar panel investment option, consumers must ensure they are entering a safe transaction. To do this, the consumer will need to research the company they are interested in working with; they’ll need to verify that the company’s credentials are authentic, and in the process, they may run into competitors (or scammers) with service alternatives. No matter who they work with, the consumer must read their contract carefully and thoroughly; some scammers can even hide within companies, jacking up costs, fines, and fees to drop the extra money into their pocket.
Research
If ever a business owner or consumer wants to move to solar, they must speak with authentic professionals. Consumers should verify them, ensuring they are insured, have various examples of past projects of a similar nature, and be ready to provide proof of current, active permits. If the company does not have active permits (if they need any), you must look elsewhere; avoiding proof of permit or having inactive documents can be a sign of scammers, poor scheduling and communication methods, or a scheme to defraud the city. Some research into the necessary permits should be expected—city clerks’ office websites are a good place to start, with attention to search filters.
Verify
No matter who the consumer is considering installing their panels, they must verify the company’s credentials, including looking at reviews, requesting references, and verifying city permits. It’s essential to do this for every company they consider because some scammers create copies of authentic websites—tricking victims into sharing personal information.
Get Multiple Quotes
After thoroughly verifying a company, they should also consider verifying competitors. Comparing multiple providers allows consumers to compare prices, services, credentials, and differentiators. Moreover, comparing authentic companies can further refine a consumer’s knowledge about the service, leaving them more informed and better able to recognize potential risks.
Read the Contract Carefully
Consumers must understand every aspect of their contract before signing it; this is not an exaggeration. If they do not understand the contract they are signing, they do not know the outcomes of signing the document. They could sign away their house or business upon missing three payment installments. They could agree to split the profit if the house or property ever sells to another party. Or, more commonly, they’ll set up the property owner with “necessary” fees, hidden fines, and overbearing terms.
What to Do If You Suspect a Solar Panel Scam
Cease Communication
The moment that something seems off is when a consumer should cease communication with the suspected scammer; this could be as simple as shutting the front door or as challenging as changing your phone number. Some scammers may use emotional manipulation or fallacy logic (i.e., the sunk cost fallacy, false dilemmas) to reinforce the relationship with their victim; however, recognizing the signs of these tricks is typically enough to confirm to the victim that they should cease contact immediately.
Report the Scam
- First, report the scam to the local authorities, including the local non-emergency police, the State Attorney General’s Office, and the local Department of Justice.
- Next, report the scam to the Federal Trade Commission; this will assist the authorities in mitigating future fraudulent activities and get more interest.
- If an authentic company conducted the scam and you want to open an investigation, you can complain to the Solar Energy Industries Association.
- Additionally, consumers can also report complaints to the Better Business Bureau.
Seek Legal Advice
If consumers think they may have given information or money to a scammer, they must immediately lock down their accounts. They should lock their payment cards and digital wallets, freeze their credit scores and financial accounts and at each of the three bureaus, enable notifications on all accounts, and begin changing their passwords, preferably using a password manager.
Victims should also consider exploring their recourse options. It can be challenging to obtain retribution after being the victim of a scam; speaking with professional consultants can help victims understand their options and plan their next steps.
Solar scams are deceptive activities where a scammer tricks potential victims into investing in renewable power. These scams can have many nuances, from authentic installations (where the scammer tacks on thousands in fees) to installation down payments (where the scammer takes the money and runs).
However, the more often these schemes occur, the more the public learns about them and how to recognize them. Take steps to verify who you’re talking to and if they are authentic before signing or handing over any money to these companies—do the research ahead of time, and most scams are mitigated.
