Don’t Get Tricked by a Shady Solar Company

4 Things Your Sales Rep Might Not Tell You

Residential solar power is more popular than ever — in fact, over 1 million homes in the United States are currently being powered by energy from the sun (compared to only 30,000 homes back in 2006).

With solar quickly growing in popularity throughout the country, it’s probably safe to say that you’ve had at least one solar salesperson knocking on your door trying to sell you on the idea of powering your home with clean energy while also saving pocketfuls of cash. Even if nobody has knocked on your door, it sounds almost too good to be true, right?

Actually, it’s not! Thanks to incentives and energy savings, going solar with a reputable solar company truly can be financially beneficial in many states; however, as I’ve dug a little deeper into the industry, I’ve found that there are some solar companies that aren’t so reputable — shady companies, if you will (no solar pun intended).

For example, in November 2015 the Department of Justice filed a formal complaint against RaPower3 LLC, a Utah-based solar company selling solar technologies produced by International Automated System. The complaint accused RaPower3 of tricking over 70 customers by claiming that the purchase of its “groundbreaking” products would result in substantial tax breaks. However, after investigation it was discovered that RaPower3’s “revolutionary” technology did not even produce energy, nor did it qualify for tax breaks of any kind.

These shady solar companies might offer you a feature that sounds great in theory; but in reality, it’s just a gimmick used to close the sale, and not something that provides actual value to you. In some cases, these “awesome features” can end up hurting you more than they benefit you.

To help you ensure that you’re doing business with a legitimate solar company, take a look at this list of four common marketing tactics that should immediately set off your shade radar:

Complimentary Panel Cleanings

Some solar companies might promise that they’ll clean your panels for free for the next however-many years. While this might sound like a nice perk, don’t let it be a deciding factor when choosing a solar company. In all honesty, proactively cleaning your solar panels will not significantly improve their overall performance (unless you live in a place that’s incredibly smoggy or dusty).

Free Home Efficiency Upgrades

Another shady sales ploy to be aware of is solar companies offering to install home efficiency upgrades — such as a smart thermostat or LED lights — to offset a significant portion (upwards of 20 percent) of your energy consumption. In reality, these upgrades will typically only offset about 8 to 10 percent. The reason why these additional features may appear to provide a greater offset percentage is because the company will be installing fewer panels than you really need to cover your energy usage. You’ll most likely end up having to call the solar company to come out and install more panels later on, which could cost you more than if you had installed all the panels at once, or simply gone with a different solar company altogether.

So if you’re looking to completely offset your energy usage with solar and your quote shows that the panels alone will cover over 90 percent, go ahead and take the free upgrades! But if the quote states that the panels will only cover around 80 percent, while the thermostat and lights make up for the rest, be cautious.

No-Interest Tax Credit Loan

If you’re thinking about financing your system with a loan, chances are that the solar company you work with already has a partnership with a bank or loan company, meaning that you can just work through the solar company to obtain the loan. While this model can provide a simple, hassle-free experience for you, there is one thing to be on the lookout for. Some solar companies will propose that you apply for two separate loans — a zero-interest for 12 to 18 months loan for the full amount of your solar tax credits (expected to be paid off after tax season when you get your refund back), and a low-interest loan to cover the rest of the cost of the system.

Here’s the catch: solar tax credits are available on a one-to-one basis according to your tax liability (the amount owed to the government based on your income), and most Americans do not have a high enough tax liability to take full advantage of their tax credits during the first year. In fact, many people take 3 to 4 years to entirely claim their solar tax credits. In other words, you are only going to receive a portion of your tax credits in Year 1. And if you don’t pay back that zero-interest tax credit loan in full after 12 or 18 months, the interest rate will shoot up, leaving you to scramble for the funds to pay off the loan at a now significantly higher interest rate. If possible, finance your entire solar system with one low-interest loan.

The Panel Switch

It’s hard to believe that this one actually happens, but I have personally encountered a few people who have been victims of a maneuver known as the “panel switch,” which is possibly the shadiest tactic of them all. It happens when a solar company sells you a particular type of panel and then installs a different, lower-quality panel on your home. Maybe the company didn’t prepare enough to have the right panel in stock before the installation, or maybe the company is just straight up shady and likes to take advantage of people, but either way, this practice is both uncool and illegal. Once you’ve purchased panels, be sure to take a look at the box and double check that you’re getting what you paid for on installation day.

While most solar companies are honest and reputable, others aren’t. But if you’re aware of these gimmicks and know what to watch out for, you’ll avoid falling prey to a shady company and have an awesome experience with the best solar company in your area.