Solar Panel Scams: When to Call a Consumer Protection Attorney

Energy generated by solar panels is a great thing for consumers. But so are cars, credit cards, and mortgages. Like those products, at the heart of getting solar panels is a complex and complicated consumer financial transaction. And while there are surely great and honorable solar panel companies and solar panel sales reps, there are also many scammers and scoundrels – resulting in solar panel scams.

We have heard from many people who were approached by a door-to-door salesman offering “free” electricity and solar panels that “pay for themselves.” It sounds almost too good to be true, and before they know it, they have become obligated on a long-term contract. They have a leaky roof. They have energy bills that are higher than what they were paying before the solar panels. High-pressure sales tactics, misleading statements, “signing the iPad,” and lack of customer service can be the tip of the iceberg. Beneath the surface are hidden terms that can prevent a person from selling their house without paying a hefty fee to the solar company.  

When installed correctly by professionals who are competent and passionate about their work, solar panels can significantly benefit consumers and the environment alike. 

But as with any emerging market, there are always those looking to cash-in and capitalize on the trend. Solar panel installations for residential and commercial properties are no exception to this. 

Some solar panel companies have garnered very public scrutiny. See, for example: “Vivint, Inc. to Pay $375,000 to Resolve Allegations of Deceptive Advertising and Sales Practices”; “Vivint Accused Of Tricking ADT Customers Into Switching”; “It’s time for solar to clean up its act”; “Vivint Solar Investors Sue Brass Over Predatory Sales Worries”; “A major player in solar energy leaves some customers seething”; “Why Palm Coast Is Alarmed: Vivint Home-Security Solicitors Dogged By History of Deception”; “Vivint Solar agrees to pay $122K fine over charges of deceptive door-to-door sales practices”.

Consumers must understand what to watch out for and how to protect themselves from solar panel leasing scams.

This article will discuss what tactics are used by solar panel scammers and when you should enlist a consumer protection attorney’s help.

Understanding the Basics of Solar Panel Ownership/Leasing

With solar panel systems, you can either own your system by purchasing the equipment outright, and this is usually done with a home equity loan or solar loan – or you can lease the equipment from a solar energy group. This article focuses on leasing because that is where the biggest problems arise.

Solar Panel System Lease/Solar Power Purchase Agreement (PPA)

With solar system leasing agreements, there are usually no upfront costs to the homeowner. However, homeowners do not own the solar panels installed on their houses. They have little control over where or how many solar panels are installed and often do not benefit from any tax incentives that the state and the federal government provide because they are not the panels’ owners.

With a Solar Power Purchase Agreement, PPA, the homeowner opts into buying power directly from the solar power company that installed the panels.

Homeowners may unintentionally opt-in to long-term contracts, 25+ years, or only end when they buy out the lease agreement at exorbitant rates. Some homeowners are forced to do this when they put their homes on the market.

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High-Pressure/Fraudulent Sales Tactics

Be on the lookout for:

• Door-to-door sales – Representatives go door-to-door looking for homeowners to sign onto contracts before fully comprehending the agreement’s terms. Sales reps will flaunt the saving and earth-saving benefits of solar power but will not be forthcoming about the terms of the solar leasing agreement.

• Too-good-to-be-true advertising – Facebook, Instagram, and other social media outlets are places where people will see ads flaunting the benefits of solar and “low-cost” or “no cost to you” solar programs. Sadly, these ads will often target lower and lower-middle-income communities, praying on people looking to save on their energy bills. Once consumers put their info into a landing page, they are targeted by high-pressure sales associates to sign up for an installation.

• Lack of documentation – Some companies are unwilling to provide valid documentation and coarse homeowners for a quick e-signature on a tablet before they’ve had a chance

The shady tactics of a solar panel scam can sometimes be combatted through various consumer protection statutes, including:

• The Maryland Consumer Protection Act;
• The Maryland Door-to-Door Sales Act;
• The Federal Consumer Leasing Act;
• The Maryland Credit Services Business Act;
• And even more laws, depending on the facts of the particular case.

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Protect Yourself from Solar Panel Scams

In some of the more infamous solar fraud cases, there have been circumstances where solar energy groups will forge signatures, forge contracts, and run unlawful credit reports, among many other abusive sales tactics.

Some of these shady companies get people locked into contracts that work entirely as in the business’ favor, leaving the customer powerless.

Thankfully, there are consumer protections to keep this very thing from happening.