Here in the United States and throughout the world, the solar power industry has been experiencing hockey stick-like growth, particularly in the past ten years.
In 2016, the total number of solar power generation installations in the United States hit a staggering milestone: one million. And, in 2019, that number doubled to two million. At this rate, the total number of domestic solar power systems is expected to break the four million mark by the close of 2023.
As tempting as it is to ‘eliminate your power bill’ by going solar, consumers are right to be wary of scams and empty promises offered by solar energy charlatans who might otherwise seem legitimate.
At Matthew R. Osborne, PC, we are passionate consumer advocates who stand up for the rights of home and business owners throughout Colorado. We’ve noticed a spike in solar energy-related scams, and we’re bringing this information to you in an attempt to protect you from these predatory schemes aimed at taking advantage of consumers in our state.
Why Colorado Is Being Targeted
Throughout America, Colorado consistently ranks in the top ten states with the highest solar power production rating. This rating means installing solar power systems on a residential or commercial building is more likely to pay for itself in a shorter span of time, a cost of ownership feature that is attracting property owners to the idea of installing solar power generation systems.
What’s more, Coloradans enjoy, on average, 300 days of sunshine every year. This aspect of our state makes it an enticing target for some of the biggest solar power companies in the country, including Vivint Solar, Sunpower, Sunrun and others.
If these companies can convince home and business owners to install their solar power systems, they can actually make money off of them by selling the power they generate to the utility companies (Xcel Energy, etc.).
To be clear: not all solar companies are out to scam consumers. However, it’s becoming more and more common for these companies to misrepresent their offers in a way that makes the proposition of going solar a ‘too good to be true’ proposition.
How These Scams Work
Solar power scams come in many forms. Some of the most common include:
- Pushing long-term Power Purchase Agreement contracts. A Power Purchase Agreement (PPA) is a contract that commits a consumer to a decades-long agreement with a solar power company. Often, in exchange for this commitment, the solar power company will provide all of the solar power equipment, including installation, free of charge. The problem is that once the consumer enters into this agreement, it becomes nearly impossible to get out of the contract without paying a hefty sum. It’s not uncommon for consumers to be forced into paying tens of thousands of dollars to exit a PPA contract.
- “Bait and Switch” tax credit promises. It’s common for solar power companies to make promises of four- or five-figure tax credits if the consumer agrees to purchase a complete solar power generation system for their home or business. The reason this could be a scam is because often, the consumer ends up leasing the solar power equipment, not owning it. This immediately disqualifies them for any federal tax credits whatsoever, and the solar power company pockets the credits, instead.
- Promises of unrealistic money savings. Some solar energy equipment salespeople will tell you they will eliminate your energy bills without costing you a dime. This is almost certainly a misrepresentation, and consumers should be especially cautious of dealing with anyone making these claims.
- Salespeople pretending to be government or utility representatives. Be on alert if you get a knock on your door from a ‘State Representative’ or other official-sounding utility company employee wanting to speak to you about adding solar to your property. The State of Colorado is not in the business of selling solar power equipment. Neither is Xcel Energy or any other public utility provider.
How to Protect Yourself
There are many steps you can take to help protect yourself from solar energy scams.
First and foremost, do not fall prey to high-pressure sales tactics. If you are feeling rushed or pressured into signing something on-the-spot, don’t do it. Always take time to do your research before entering into any agreement.
You should also read online reviews from other consumers. Take note of what these reviews say about the promises made by the salespeople compared with what the consumers actually experienced.