Solar Panel Scams

Many homeowners across the country have been the victims of solar panel scams. Unfortunately, there is limited information on the internet about the residential solar market. Customers shopping for solar often do not know how much they should pay to install solar panels on their home. Dishonest salespeople take advantage of this, and they use high-pressure sales tactics to push homeowners into unfavorable solar agreements.

Phoenix Solar Panel Systems, and our owner Steven Smith, is dedicated to cleaning up the residential solar industry and assisting in consumer protection. We are a legitimate company that always operates with honesty, integrity, and transparency. In fulfilling our mission, we offer education to everyone on the darker side of the solar industry.

Solar Panel Scams – Industry Information

Here’s some facts about the residential solar industry that will help you understand why so many people become victims of solar panel scams.

Solar Is An Unregulated Industry

The residential solar industry is completely unregulated. Some cities require licenses for door-knocking, but that is rare, and rarely enforced. No licensure or background check is required to sell solar in the USA. Anyone can sell residential solar, including felons and those with no experience or training.

The job of solar salesperson has a very high turnover rate. When starting out, it is typically an all-commission position that involves door knocking. Most people that start in solar only last a few weeks or a few months. About 90% of the solar salespeople in the industry are brand new and have very little knowledge or experience.

Solar System Pricing

The residential solar salesperson can price the solar system (and any additions like roofing, insulation, etc…) at any amount. The only limitation on pricing is the total loan/lease qualification amount set by the solar finance company. This amount is typically between $50,000 and $125,000.

The limit set by the loan/lease company has nothing to do with the size of the solar system that is appropriate for that particular customer. In cash deals, there is no limit on pricing at all.

The general public does not know how much to pay for residential solar systems and it’s hard to find accurate information online. Most of the information posted on the web is from sales organizations or written by people in different parts of the country. Since solar savings are heavily dependent on local utility company regulations, information online can be totally inaccurate

Electricity Bills After Solar

Often times, post-solar utility rate plans are complex and convoluted.In addition, most solar salespeople, managers, and company owners have not taught themself how their local utility bills after solar. They fabricate information with potential customers about the solar savings. One or two years down the road, the customer is not saving the amount of money promised by the salesperson.

Dishonest Sales Training

The solar company owners and managers often intentionally lie to their new sales representatives when training them so that the sales representatives unknowingly lie to the customers. They do this to maximize the amount of profit the solar company makes.

Also, most solar salespeople don’t care to know the truth, even if they sense that they are being lied to. They just want to make as much money as possible and don’t care how they make it.

Is Solar A Scam?

Homeowners without solar often say that “solar is a scam”. Even homeowners that have solar will sometimes say “solar is a scam”. The unfortunate truth is that people buying solar from the wrong salespeople and wrong companies can be scammed.

However, solar itself is not a scam. If you go with the right salesperson and the right solar company, solar will save you a lot of money on your electricity. But since solar is unregulated, and the homeowners are not educated on what to pay, dishonest salespeople can take advantage. In fact, dishonest people flock to the residential solar sales business to dupe customers and make high commissions.

Solar Panel Scams – Red Flags

There are several red flags that you will see when dealing with a solar scammer. All the dishonest solar salespeople use the same tactics. Here is what to look for:

Free Solar Panels

They advertise and claim that they offer free solar panels. There are no government programs that offer free solar panels. It is a dishonest and underhanded marketing technique that many solar companies use. Free solar panels do not exist.

No Upfront Cost

They claim that their “program” offers no upfront cost. The fact is that every solar loan and lease on the market is zero-down with no upfront costs. These solar companies are not offering anything special or unique.

Leases and Power Purchase Agreements (PPA)

They are pushing you into a lease or power purchase agreement. These types of solar agreements have lost popularity over the years because they are often used to scam customers. The main problems with these agreements is the homeowner does not own their solar system, and they can make selling the home difficult. Solar loans are the norm in the industry now and they offer many advantages over leases and power purchase agreements.

Bad Online Reviews

Look for bad reviews on Google and Better Business Bureau. Go through all the company’s reviews online and look for customers that have been scammed. Keep in mind that many dishonest companies post fake reviews on Google and social media. So, you have to be diligent about finding the reviews from their actual customers.

Misrepresentations About Tax Credits

The salesperson says that you will receive a check or a rebate from the government for the tax credits. The Federal and State tax credits only lower the amount of money owed to the government. They never result in the government giving money to someone.

Utility Company Billing

The salesperson lies about what your utility company will charge you after solar. Usually, the salesperson lies by saying that you won’t receive a utility bill at all after solar, which is never true. You need to do research into your utility company to find out this information. Don’t rely on what the salesperson says. If you are in Phoenix, we have web pages with detailed information on APS Rate Plans After Solar and SRP Rate Plans After Solar.

Incorrect Solar System Size

The salesperson is offering more or less solar panels than what your neighbors have. Use Google Maps to look at the roofs and solar systems of your neighbors. If your system is much larger or much smaller, the salesperson may be inexperienced or trying to scam you.

Solar Systems in Your Neighborhood

The salesperson brags about installing solar on your neighbors’ homes. This is a common sales tactic that solar salespeople are trained to use. They often claim to have installed all the solar systems in your neighborhood, but this is usually not true.

Inconsistent Contract Terms

You signed a contract that says something different than what the solar salesperson said. The language in the contract is what you are actually agreeing to, not what the salesperson claims.

Short Term Warranties

They are offering short-term warranties. The industry standard for component, production, and roof warranties is 25 years with a 10-year installation and workmanship warranty. Yo should not sign with a company that offers warranties that are shorter than this. You will need to read the solar installer’s agreement thoroughly to discover this information.

Unreasonable Cancellation Fees

The solar installer’s contract has unreasonable cancellation fees. The solar finance agreements do not have cancellation penalties and are easy to cancel before the solar system is installed on your home. However, solar installers often include high cancellation fees in their contracts. Make sure that the cancellation fees are reasonable and based on how much work that has been performed.

Other Lies About Solar

What the solar salesperson says sounds too good to be true.

The salesperson lies about how long their company has been in business.

The salesperson lies about how good his company’s online reviews are.

The salesperson makes outrageous claims. Some common ones are that his company is “#1 in Arizona”, the “best solar company in Arizona”, or they “install the most solar in Arizona. None of these claims are ever true.

The salesperson claims to install the best equipment on the market. Nearly every solar installer across the country installs the same or similar equipment. Most likely, the system components being proposed are no different than what everyone else installs.

Look For More Than the Lowest Price

Most people reading this are going to get a grid-tied solar system because they live in cities. This means that you will still be hooked up to the utility grid after you go solar. This is because battery technology is not yet at a point where it’s affordable for homeowners to be totally off the grid with solar. Also, most state and city laws require homeowners in cities to be hooked up to the utility grid whether if they have a battery or not.

People shopping for the lowest price and nothing else are at-risk of being lied to and ripped off. Dishonest salespeople know it’s easy to give this type of customer the cheapest products and an undersized solar system. This gives the customer the low price they want, but it will negatively affect the savings and reliability of the system.

The dishonest salesperson will lie to the customer about how much money they will save on their electricity after going solar. If the homeowner doesn’t do anything to verify those statements, they may end up paying more for electricity AFTER solar than they did BEFORE solar. Unfortunately, this situation is quite common.