As with any industry, there's a chance that you can be scammed when you purchase solar. Knowing how to spot a solar scam can protect your home and your bank account. If you're considering going solar, or purchasing solar from one of those persuasive sales bros who show up at your door, here's what you need to know about solar scams.
Too Good to Be True
Sometimes when a solar salesman shows up at your door, or you get a brochure in the mail advertising solar for your home, it can seem like the offer is too good to be true. Often, you'll see low-cost or no-cost solar for your home advertised online.
If you're seeing sales pitches that promise you'll have to pay little to no money to get solar for your home, it is more than likely too good to be true. Solar isn’t free, and someone has to pay for the panels and installation. Knowing that this is a sales tactic used to trick middle-to-low income households can help you spot the ruse before you buy into it—literally.
Knowing that solar scams are out there, it’s important that you ask lots of questions and do your own research about solar in your area before you ever give your information to a solar salesperson.
Solar Sales Tricks
Some solar salespeople will exaggerate how much solar is going to cost you in the beginning so it seems like financing is your only option.
If they can trick you into financing through their shady company, they get your money and a big old commission. Solar might not cost as much as they say it's going to cost, so do your own independent research before you trust what they're saying to you.
Solar companies will also sometimes write fake news articles online singing the company's praises when in reality it's just a paid ad made to look like a legitimate article that you can trust.
You also need to pay attention to the language being used when talking about solar loans, because sometimes they'll hide solar loans as a special program or a government subsidy when in reality they're just trying to get you signed up for a loan that you may not have the ability to pay back.
You also need to be aware that sometimes a salesman will ask to see a utility bill. They're not actually interested in your utility bill, they just want your name and address from the bill so that they can further pedal you a product that you don't want.
Do not give these companies your information unless you can verify that they are legit, and a legitimate company is not going to ask to see a utility bill to steal your information.
Another tactic that's really popular with solar companies and the salesman is to use language like “only in your area” or use the scare tactic that the great deal is only available for a limited time. This is inflammatory language used to make you feel like there's a scarcity of resources and prompt you to quickly act without vetting the salesman or the company.
The last popular tactic that a lot of these shadier companies will use is saying that the federal tax rebate will go away next year and you need to get it this year. The federal tax rebate, which is smaller than they say to start with, will decrease every year.
Do your due diligence on this. Look up the subsidy yourself.
Can You Get a Battery?
The best deal for you is to connect solar panels to a home battery. If someone's trying to sell you a system with no battery, where the power goes directly to the grid, think twice.
A home battery will let you use the power you collect during the day at night. If you don't have one, you'll go right back to buying energy from the grid when the sun goes down.
Are You Protected If Power Rates Change?
Power companies are pushing back against paying homeowners (and the solar companies they work with) for power they add to the grid from their panels. In some places, the deals solar companies operate under, where they recoup their costs by collecting payments from the power companies, might dry up.
Make sure you ask about what will happen to your deal if energy rates change in the future.
How to Spot a Sales Bro
The salesmen who come knocking on your door are usually not really interested in selling you solar, they more than likely just want to generate a lead and take a commission. The salesmen show up at your door and they're likely young men wearing a polo, tan shorts, and a hat with a company name on it.
These young workers are often recruited from college campuses and promised a whole lot of money for a little bit of work. They’re given a script and minimal information about the solar products and process—just enough information to seem knowledgeable, but not enough to know exactly what they’re selling.
These sales representatives are flown somewhere in the country, dropped off by a supervisor to knock on doors all day, and picked up at the end of the day and asked to turn in their leads.
Once you know who to look for, and that they’ll probably give you some form of a scripted pitch about solar, it can help you know that you may be part of a scam.
Now, we want to be clear that not every solar salesperson is a scammer, but because some are, you need to be careful when giving information to these individuals. Ask lots of questions. Find out who pays them to knock on doors and do research on that company.
Now, if you're being recruited for summer sales, please know that most people never make the amount of money that is promised to them and that the testimonials you hear from previous summer sales workers are just promises from outliers.
Is Solar Stimulus Legit?
Legitimate solar financing does exist, but not in the ways that it's typically advertised. You're going to see a ton about specialty government programs that exist to pay for all of your solar—this just isn't true.
While there are government programs that exist that may offer a small subsidy or rebate for your solar panels, the amount that these programs pay is significantly inflated and exaggerated when it's being pitched to you by a salesman who is only after a little bit of commission.
If you are ever promised that the government will cover the entire cost of the panels and installation, or that they’ll refund you most of your purchase, that’s a huge red flag.
Doing your own research about exactly what the local government programs in your area will cover can help you avoid getting scammed. When you see just how much these sales folks over-promise when it comes to rebates and subsidies, you’ll be shocked.
Now, legitimate financing is out there if you’re interested in solar for your home. This financing comes through certain solar financing companies or installers. If you want to add solar to your home and you want some help getting the project financed, this is a good place to start.
These programs aren’t just more promises of free money with no strings attached though. Most of these solar financing companies charge interest and require you to make regular payments—just like any other legitimate loan company.
One easy way to find these companies and vet them is to talk to friends and neighbors who have already gone through the process of having solar panels installed at their home. Ask if they use a solar financing company or another lender, and ask for a review of their experience.
Being able to talk to somebody who has first-hand experience with the solar lender will give you a really good peek into what the process looks like and what you should expect. While online reviews are great, and vetting the company in person can be helpful, a real-life review is going to be one of the most telling things about working with solar lending companies.
Why Am I Getting So Many Calls about Solar?
Renewable energy as a whole is having a moment, and solar has become increasingly more accessible to everyday households. Because people are interested in renewable forms of energy and because you're starting to see it pop up in your neighborhood more and more, solar scammers can take advantage of the trend and pose as a wolf in sheep's clothing.
You’re getting calls about solar because it’s becoming more popular. You’re also getting calls about solar because scammers know it’s popular and a call seems too harmless to be a scam.
Legitimate solar companies are not out here calling people, asking for their business over the phone. Sure, like all companies, legitimate solar companies have to advertise—but cold calling is not going to be part of their advertising plan. Start paying attention to mailers and billboards around your area or lawn tags that advertise a solar company in your neighborhood. You’re much more likely to see legitimate solar advertised here.
Is Solar a Pyramid Scheme?
Solar power is a real, and increasingly powerful technology. But there are elements of certain solar sales companies that emulate some of the negative things about pyramid schemes.
Pyramid schemes are illegal in the United States. If you're not familiar with a pyramid scheme, you've probably heard of MLMs which are essentially a legal form of pyramid schemes. Sometimes you'll see this type of business called a direct sales business, but it's all essentially the same.
In a pyramid scheme, the person at the top recruits two people to work under them and those two people also recruit two people, and those four people each recruit two people (or more), and so on until you have built a pyramid with a small group at the top and a wide group at the bottom. Now, recruiting like that isn't illegal but the payment system that pyramid schemes use is.
In a pyramid scheme, I do the work, I make some money, and then I have to give part of that money to the person who recruited me. So the more people you recruit, the less work you have to do because people under you are doing the work and giving you part of their paycheck.
So no, solar is not part of the pyramid scheme. But solar sales representatives are sometimes recruited in a similar way to how individuals are recruited into pyramid schemes. Also, pyramid schemes and solar sales tend to prey on the same vulnerable populations and use similar sales tactics to promise something amazing for a very low cost, when in reality you end up with something that you didn't anticipate having to pay for.
How Do You Know If a Solar Company Is Legit?
There are a few ways to tell if the solar company that you're interested in working with is a legitimate business. Firstly, you can always check with the Better Business Bureau to see what claims against the company and to see their standing with the federal government.
The Better Business Bureau makes a lot of the information available about complaints and allegations against the company, and if you're finding that people are finding a lot of claims against the company, it's a really good sign that the business is not legit.
We always also recommend talking to your friends and family who have previously installed solar. If you don't know anybody personally, you can walk around your neighborhood and see who has solar panels on their houses and see if they have a sign in the yard saying who installed the solar.
If they don't, consider knocking on the door and asking about solar. We find that people are usually happy to answer a few basic questions about the solar company that they used. Getting a first-hand testimonial about the solar company that you're interested in working with is a good way to know that they’re a legitimate business.
Online research is also very easy and critical when it comes to selecting a solar company. The internet is your friend, and people on the internet are looking out for you more than you may realize. Look at reviews for companies.
Now, take everything with a grain of salt because it's easy to trust a stranger online, and there will be great and terrible reviews for every company. But if the majority of the reviews are good, and people are saying things that give you the green light and raised no red flags, that's a good sign that this company is worth investigating more, Because chances are that they are a legitimate company.
Questions are your friend, and the last thing that will recommend that you do when you're vetting a solar company is to ask a whole lot of questions. You want to company that can answer your questions without any scare tactics or inflammatory language. You're looking for a company that is straightforward and honest, and by answering your questions you'll get a good feel of if the company is being truthful.