Solar Sales Gimmicks: What to Watch Out For

At this point, if you’re a homeowner in Southern California, you’ve likely encountered, and have perhaps even by hounded by, an aggressive salesperson offering solar. They’ll call your phone, knock on your door, and try to get your attention as you walk by their tent at the farmers’ market, promising you free gifts and long periods of no payments if you sign for a solar system with them that day. Hopefully, you’ve resisted these hustlers, but if you haven’t, you should know their tricks so you don’t get pulled into a solar contract that will turn into a nightmare down the line. In this blog, we will outline what gimmicks and scams to look out for when dealing with solar sales people, so that you can protect yourself in the solar buying process.

Solar Sales Tactics That Are a Red Flag

  1. “Free Solar Panels” – One common solar sales gimmick is the promise of “free” solar panels. What they really mean is that they will install solar panels for free, and then charge the homeowner for the power the solar panels produce. This arrangement is commonly known as a “Power Purchase Agreement” or PPA, where the homeowner does not own the solar panels, but still pays the solar company for the power they produce on his roof. Typically, the payment the homeowner makes to the solar company will be less than their previous electric bill, but not very much less and at the end of the agreement period, the solar company can take the solar panels back. So, it’s basically like paying a power company for power they produce using your roof, and at the end of the day you don’t own anything. The homeowner also doesn’t qualify for any Tax Credits in this form of installation so the ROI of the solar is substantially reduced.
  2. No Money Down – Much like the promise of free solar panels, “no money down” is often another tactic that pushy solar salespeople will use to get homeowners to sign on the spot, but at the end of the day, this usually just means the homeowner will end up paying more money overall on their solar loan. Just like promises of no money down when buying a car, it might seem like there is some benefit to not having to pay any money at the start, but ultimately it just tacks more money onto the loan itself, which will ultimately make the investment cost more, as there will be more interest to be paid on that borrowed money. If you’ve ever taken out a loan you probably understand this, but many people still get tricked by the allure of going solar without putting any money down.
  3. Government Solar Programs –  Many solar companies will fabricate fake government or state incentives to enforce urgency in their marketing, citing a fake program with a fake expiration that is “ending soon!” By citing a “government program,” it adds a veil of legitimacy to the claim, as most homeowners simply will not check to see if the program is real. These fake programs can disguise themselves as rebates, claiming that the government is “paying you” to go solar, or even stating that the government is paying you for the power you produce. In reality, the only actual “government programs” that exist to support home solar are: 1) the 30% Federal Solar Tax Credit and 2) Net Metering rules, which allow you to lower your utility bill by producing the power yourself. For homeowners that don’t know better, this kind of disinformation can be confusing, and separating truth from false claims can be difficult. Homeowners should know that none of these “government solar programs” exist, and that they should steer clear of any solar companies that rely on these types of claims.
  4. Free Gifts – Many solar salespeople will attempt to entice homeowners to sign on the spot with promises of gifts and trips. This can include free iPads, trips to Vegas, restaurant gift cards, Amazon gift cards, home appliances, etc. The reason that these sales people can offer these gifts is that they can charge more for the solar system if the homeowner is not shopping around. There is no free lunch! The reason they want you to sign on the spot is so you won’t compare quotes, and therefore won’t notice the difference if they include the cost of a Vegas trip in the cost of the solar. It’s all an attempt to get you to stop comparison shopping.
  5. No Money Down – Much like the “no money down” illusion, the “no payments until (whenever)” trick is a way to get you to sign on the spot by waving a year or two of “free solar” in your face. Often it is no payments for a year, which can sound alluring for homeowners that may be cash strapped at the moment, and hope to be in better shape a year later. However, just like the “no money down” offer, the payments that would have been made during that “free year” are simply tacked onto the loan amount, so you will be making higher payments. Strictly speaking, this is not dishonest but it is misleading because postponing the payments doesn’t make them go away completely.

So, now that you know what kinds of deceptive tactics that unscrupulous solar salespeople may use, let’s talk about how to identify shady solar companies — so you know who and what to watch out for when you shop around. Choosing the wrong company could mean bad outcomes for your home and your finances, so educating yourself on local companies, and choosing wisely is highly recommended. Let’s look at some of the tell-tale signs you can look at to tell if the company you’re dealing with is professional or not.

Signs of a Shady Solar Company

  1. Bad Reviews – This one may seem obvious — but you’d be surprised how many homeowners ignore bad reviews and choose a solar company that has terrible ratings online. Now, every company is going to have the occasional unhappy customer, but if it’s clear this is part of a larger pattern and the company is not responding to them — that‘s a red flag. Be discerning when you look at reviews, and make your decision accordingly.
  2. No reviews or very few reviews – This is also a red flag – if a solar company hasn’t been in business long enough to have at least 20 reviews, or hasn’t had enough satisfied customers to leave that many reviews, it’s probably a bad sign. Many solar companies have come and gone in San Diego, and some, due to overwhelmingly bad reviews or a bad reputation, will change their name and continue doing business under another trade name. So if you see a company with very few or no reviews, it is time to steer clear.
  3. Bad rating with Better Business Bureau or no profile at all – The Better Business Bureau is a great resource to track complaints, lawsuits, etc. against accredited companies. Here you’ll find information that is more detailed than just your average review. If they have a bad rating (less than A+) or don’t have any profile at all — you should likely stay away. There are plenty of solar companies in San Diego that are accredited and are willing to be held responsible for any customer problems.
  4. No Presence on Social Media – It may seem like a cliche, but the truth is if a company isn’t on social media these days, they are usually staying hidden for a reason. So, it follows that if a company you are working with isn’t on social media, you should be concerned. If they don’t have a presence online, they are likely hiding something, or have not been around long enough to prove themselves.

So, when researching solar, there are certain aspects of both the sales tactics, and the company itself that you should consider before deciding what company to go with. If the company or salesperson display any of the traits listed above, you likely should do some further research to make sure they are legitimate. Many solar companies have come and gone over the years, and