Solar is a scam? Or not? Residential solar, or solar energy for that matter, has been the victim of bad publicity and people trying to make a quick buck off of the industry’s boom. Between 2008 – 2012, there was quite a bit of news about solar companies making millions then going bankrupt due to a flawed business model. Another one is people who bought bad products costing them a fortune while the solar company reaped all the incentive money and profits. It made solar look like it was a Ponzi scheme or full of cronyism. All that’s a shame because there have always been great companies doing outstanding work overshadowed by the media’s loud negative press.
We want you to be assured of solar’s benefits and help you steer away from any scammers that may still be out there.
Solar PPA/Lease agreement
Although PPA and lease agreements can work, the many disadvantages buyers aren’t unaware of or don’t comprehend at signing can lead to the solar scam idea. However, if you are informed, you can avoid any pitfalls.
Solar PPA and lease agreements are ways buyers can get residential solar fairly inexpensive, but here are some of the disadvantages:
- Long-term contracts that tie you to paying someone for your energy (Approximately 15-25 years). You should be bill and energy independent with your solar system.
- Difficulty in selling your residence while under PPA or lease contract. Your home buyer will have to take over your contract, which could lead to no sale on your home or you forking over money to the solar company to end the contract early. (How to get out of a solar lease agreement.)
- Rate escalation, so the power you purchase from the solar panels on your home can go up annually. Not much different than just buying traditional electricity.
- Any tax or rebate incentives go to the solar company and not you since they are the ones that technically own the system.
These disadvantages have caught many off-guard and created a stigma that solar energy is no better than fossil fuels or it’s a scam. This problem is unfortunate because better communication between solar providers and buyers could have managed expectations or caused buyers to consider other, better options.
Signs of a Solar Scam
While solar PPA and lease agreements are not scams, there are some scam artists or unethical solar companies out there that may try to take advantage of you. They play on your desire to invest in wonderful technology, becoming energy independent, and any lack of knowledge you may have, so we want to equip you with indicators to look for to avoid these money traps.
- Social media and internet ads that:
- Mimic the appearance of an independent publication’s article. It may have a picture of some official signing legislation.
- Have inflated upfront costs for a solar installation that pushes hard for financing. (Financing is a great option that doesn’t require forcing you.)
- Contains language disguising a solar installation or roof replacement loan as a utility or government-sponsored “special program.”
- Claim special funding “only available in your area” or “for a limited time.”
- Aggressive sales tactics from door-to-door solar salespeople. These people are confrontationally creating a high-pressured situation for homeowners to sign a contract or financing agreement. (Reputable companies like Option One Solar know this is a partnership between you and them. Therefore, they inform you, support you, and offer solutions, not pressure.)
- Overestimating utility rates or the value of small energy efficiencies that exaggerate your return on investment. (Average payback period for Californians is six years.)
These three cover the bulk of any solar scammer’s playbook. Those people victimized by companies using these tactics have created a massive misconception that solar is evil or unrewarding when the exact opposite is true. There are many companies out there doing a great job and fighting the good fight in this industry. Let’s talk about what they bring to the table.
Signs of a Reputable Solar Company
The solar companies that are good and keep this industry alive carry some key traits. As a whole, we want you to own your system and energy independence. Whether you do that by paying for it all upfront or utilizing the power of financing, owning your system is by far the best way to proceed.
- A reputable solar company will approach its dealings with you as a partnership that empowers you through solar energy. They will provide you with verifiable and accurate information that minimizes your payback while delivering dependable and quality products for your energy needs.
- They will work tirelessly to get you the system that fits your situation and gives you total ownership. This company will support you through your system’s life and handle the physical and paperwork heavy lifting. That’s that kind of company you want.
Don’t be afraid of solar. Despite any negative hype, it is not a scam. Be on the lookout for anyone just trying to sell you something, but know that as a whole, the industry is full of good people that want to help you succeed.