When done right, going solar can substantially reduce your carbon footprint and your energy costs. However, this rare double-whammy of benefits also makes the residential solar industry ripe for scams.
Solar panel scams use the desire to save money and contribute to a better future to mislead homeowners into making quick decisions based on incomplete or inaccurate information. However, a little due diligence goes a long way, and just because there are dishonest players in the solar industry does not mean that the entire industry is a scam.
In this article, we’ll explore:
First, let’s establish the definition of a solar panel scam so we know what to look for.
According to Merriam-Webster, a scam is “a fraudulent or deceptive act or operation.” So, by definition, solar panel scams are operations that use deceptive acts to try to sell solar systems.
Unfortunately, we have to use this broad definition because there are a handful of different types of solar panel scams floating around the industry.
So, let’s take a look at some common solar scams so you are better prepared to identify and avoid them.
There are several types of solar scams that range from slightly dishonest to borderline predatory.
Let’s start with the one I’m sure we’ve all seen on Facebook and YouTube: “Free solar panels.”
Advertising free solar panels is deceptive and dishonest – the very definition of a solar scam. In fact, we wrote an entire article about it.
In short, free solar panel ads are typically for leases and power purchase agreements (PPAs). These arrangements are basically long-term solar system rentals in which the solar company owns the panels and homeowners pay a monthly fee in lieu of their electricity bill.
So, are homeowners technically paying for solar panels in a lease or PPA? No. But does that mean it’s free solar? No, that would be like saying you got a free pair of bowling shoes even though you paid $30 to bowl and you had to return the shoes when you’re done.
In fact, solar leases and PPAs are typically more expensive than owning panels in the long run, add no value to the home, and can be difficult (and expensive) to transfer in a home sale or end early.
You may also see ads for “no cost solar” or “zero down solar.” Again, this are misleading at best and fraudlent at worst. And it’s important to note that you can own solar panels with a zero-down solar loan just as easily as a lease or PPA (and the lifetime savings will be much greater).
No, not all leases and PPAs are scams. However, they seem to be a breeding ground for deceptive and predatory practices, including the old “government is paying people to go solar” scam.
Related reading: Solar Leases vs. Solar Loans vs. Solar PPAs
Another solar scam floating around Facebook and YouTube is the “government is paying people to go solar,” like the one below.
Although there is a 30% federal tax credit, in addition to state and local incentives, available to homeowners that install solar and/or battery storage systems, that does not mean the government is paying people to go solar.
This is essentially a classic bait and switch scam. A solar company uses the premise of getting 30% off solar to get homeowners to sign a lease or PPA, and then collects it for themselves.
In extreme cases, solar scammers may even pose as utility or government officials trying to promote a new or unique solar program in your area. Now, any government or utility official trying to sell you solar panels should raise a red flag because governments and utilities don’t sell or install solar panels.
The bottom line is that there are solar incentives that can help reduce the cost of going solar. However, be wary of anyone pushing incentives too hard, especially if they are instilling a dire sense of urgency, like the YouTube ad below.
Another scam used to sell solar panels is promising unrealistic energy cost savings.
Now, going solar is a way to save on energy costs for many homeowners. However, it’s a steady, long-term investment like real estate or 401k – not a get-rich-quick scheme.
Here are a few solar scam red flags to look out for:
Scams are often pushed using an urgency piece like “this program ends soon” or “we can only offer this price for so long.” Going solar does – and should – take time. Don’t let a pushy salesperson use urgency to cloud your judgment.
As a rule of thumb, listen to your gut. If something feels off or too good to be true, take the time to ask questions, learn more, and consult people you trust.
With that in mind, let’s look at some ways to avoid solar scams.
Scams are a blight on the solar industry, but that doesn’t mean home solar itself is a scam.
Here are some tricks to avoiding solar scams, finding reputable installers, and enjoying the benefits of home solar.
If you only listen to one sales pitch, it can be easy to get sucked into a scam. However, if you compare a three or more solar quotes, you’ll get a better sense of:
Getting multiple quotes gives you a baseline that makes it easy to identify solar scams.
Vetting installers is crucial to avoiding solar scams. Going solar is basically investing tens of thousands of dollars in your energy future, so you should really get to know the company handling your investment.
Here are some things to look for:
The vetting process takes time, but it’s well worth the effort to protect your investment. If an installer is in any way discouraging or trying to bypass the vetting process, that should raise a major red flag.
If you’re waiting for a massive coordinated campaign to eradicate solar scams, don’t hold your breath.
However, that doesn’t mean nothing is being done to combat solar scams. Rather than playing the whack-a-mole game of identifying and stopping scams, the industry is focused on building a more transparent marketplace and empowering homeowners.
In particular, Electrum – the parent company of solar.com – was founded in direct response to scammy, unethical sales practices in the solar marketplace.
The heart of solar.com is its network of vetted installers. Before joining the network, each installer must pass a rigorous vetting process that includes a review of the company’s financials. At a bare minimum to be considered, a company must have:
At the end of the day, fewer than 30% of the solar installers that apply are accepted into solar.com’s network (we’re that picky), but we believe homeowners deserve honesty, transparency, and peace of mind while they make a major life decision.
There are undoubtedly scams to be aware of in the solar industry. However, that does not mean the entire concept of home solar is a scam. When installed by a reputable solar company, home solar can provide substantial energy cost savings and carbon emission reductions.
Always get multiple quotes and thoroughly vet solar installers before investing in home solar.
Free solar panels are indeed a scam. This deceptive marketing tactic is often used to promote solar leases and power purchase agreements (PPAs), which come with long contracts and monthly payments that escalate over time.
Calling a solar lease or PPA “free solar” would be like saying you got “free bowling shoes” even though you paid $30 to go bowling and had to return them when you were done.
Getting multiple quotes and thoroughly vetting installers is the best way to avoid solar panel scams. You can also use solar.com to compare quotes from our network of thoroughly vetted installers.
Our vetting process includes an analysis at each company’s financial standing and fewer than 30% of the installers that apply to join the solar.com network are accepted. This strict process brings trust, transparency, and peace of mind to our marketplace.