Nov 22

Beware of Solar Fraud: Top 5 Scams Targeting Homeowners

Solar Fraud

Solar power stands out as a bright prospect in the ever-evolving landscape of renewable energy. It’s an eco-friendly alternative and a potential source of savings for homeowners.

However, like any industry experiencing rapid growth, the solar sector isn’t immune to unscrupulous practices and solar fraud. While most solar companies and representatives operate with integrity, homeowners must know potential pitfalls in the solar journey.

In this article, we’re shining a light on the hidden hazards of solar investments. From deceptive sales pitches to illegitimate paperwork, we’ll cover five key areas every homeowner should scrutinize:

1) Common falsehoods propagated by some Solar sales reps,
2) Pitfalls of permitting fraud,
3) The dangers of lending fraud,
4) Risks associated with credit application fraud
5) The potential harm of fraudulent warranty documents.

As we explore these topics, we aim to give you the knowledge to make informed, safe decisions about your solar energy investment and avoid solar fraud.

Common Lies Told by Solar Sales Reps

Nothing is promised in solar; if it is not written in your contract, then companies do not have to follow through on promises made by your sales rep.

Tax credits– This is not a rebate and is based on the total cost of the solar system as well as your tax status and deductibles. Please consult your tax professional, as homeowners will not always see a payout for adding solar. This is also based on individual state tax credits as well as federal.

The goal of solar is 98% offset of your current home’s electricity usage. This is only useful if you are enrolled or your utility offers a buyback program. There is no guarantee that a homeowner will achieve 100% offset. Homeowners will still receive utility bills, including maintenance and service fees.

Exaggerated Savings on your utility bill: Exercise caution when presented with promises of significant savings that appear unrealistic. Some sales representatives may inflate potential financial benefits without providing accurate calculations. It is prudent to scrutinize the numbers, request detailed breakdowns, and seek independent advice to understand achievable savings.

Hidden Fees and Costs: Identify concealed expenses hidden in the fine print. Certain sales representatives may neglect to disclose additional fees such as installation charges, maintenance costs, or future equipment upgrades. It is advisable to carefully review contracts, request a comprehensive breakdown of all expenses involved, and clarify any uncertainties to avoid unwelcome surprises.

Permitting fraud

Permitting fraud occurs when unethical individuals or companies cut corners and bypass the permits and regulations required for solar installations. This deceitful practice can lead to severe consequences for homeowners, both financially and legally.

One of the major risks of permitting fraud is the potential for legal complications. If your solar installation is not properly permitted, you may face fines, penalties, or even forced system removal. These legal battles can be time-consuming, costly, and highly stressful, making your solar investment a nightmare.

Additionally, permitting fraud can result in safety hazards. Proper permits ensure that installations meet building codes and safety standards, guaranteeing the structural integrity of your home and reducing the risk of accidents or system malfunctions.

By sidestepping the permitting process, fraudulent contractors may compromise the safety of your property and loved ones.

Moreover, fraudulent installations can lead to potential damage to your home. Without the necessary permits and inspections, there’s a higher chance of poor workmanship, inadequate equipment, or incompatible electrical systems.

These deficiencies can cause system failures, fires, or damage to your property, leaving you with costly repairs and a compromised solar investment.

To protect yourself from solar fraud, partnering with trusted, reputable companies in the solar industry is crucial. Look for companies that prioritize transparency and have a track record of obtaining all required installation permits.

Ask for proof of permits and verify the information with local authorities if needed. Don’t hesitate to do your due diligence and research the reputation of the contractor before making any commitments.

Lending fraud


Fake Loan Contracts: Beware of solar companies that engage in deceptive practices, such as submitting fake loan contracts to lenders.

This fraudulent activity aims to secure loans on behalf of homeowners without their knowledge or consent. Exercise due diligence by reviewing loan documents carefully, confirming their authenticity with the lender directly, and reporting suspicious or unauthorized loan activity.

Misrepresentation of Completion: Be cautious if a solar contractor requests you to sign a completion certificate before most of the work is finished.

Some unethical contractors may pressure homeowners to sign off on completion prematurely, potentially leaving them vulnerable to subpar or incomplete installations. Only sign completion certificates when you are satisfied with the quality and completeness of the solar installation.

Loan Stacking: Loan stacking in the solar industry involves an installer or salesman taking out multiple loans on a solar project without the homeowner’s complete understanding or consent. This practice is unethical and can be considered fraudulent. Understanding this issue is essential to protect consumers in the solar market.

Understanding Loan Stacking in Solar

Dual Financing: Loan stacking occurs when two separate financing agreements are initiated for the same solar project. This might happen when an installer secures financing from two different lenders or financial products for a single installation, potentially without the homeowner’s knowledge or clear understanding.

Risks: This practice can lead to various complications for the homeowner, including increased financial liability, conflicting loan terms, and possible legal issues. It can result in higher overall costs for the solar project due to overlapping interest and fees from multiple loans.

Consumer Impact: Homeowners might find themselves burdened with debt that exceeds the value of the solar installation or, in a worst-case scenario, could face legal action from lenders if the duplication of loans violates their agreements.

Credit application/contract fraud

Beware of solar companies engaging in deceptive practices, including the submittal of falsified contracts. Some unethical sales representatives may lead customers to believe they are receiving an estimate for solar, only to submit a loan application without the customer’s consent.

Exercise extreme caution when signing any documents related to loans and installations. Carefully review all paperwork, ensure it accurately represents your intentions, and immediately report any unauthorized loan applications or suspicious activities.

Fraudulent warranty documents

Key things to look for to determine whether the warranty documents are fraudulent.

Does the logo match the warranty company’s website?
Does the warranty document have a plan number?
Is the installation date correct?
Are the system details correct?

Also, please add your system to your homeowner’s insurance policy. Most warranties do not cover property damage-related claims.

We want to hear from you!

If you, or anyone you know, have encountered any of these fraudulent activities, we want to hear from you. Our mission at Solar Insure is to help make the transition to solar energy safe, transparent, and rewarding for all homeowners.

Your insights can help us shed more light on these solar fraud issues, protect others from potential pitfalls, and continue to hold the industry to the highest standards of integrity. Please take a moment to fill out the form below and share your experiences with us. Rest assured; every report will be treated with confidentiality and care.

Remember, we’re in this together. By staying informed and vigilant, we can ensure that the solar industry remains a beacon of sustainability and trust for all. Thank you for joining us in this important initiative.

About The Author

Ara Agopian brings more than two decades of expertise in both the solar and risk management industries. Ara is a seasoned expert and a licensed insurance broker across 30 states. As the founder and CEO of Solar Insure. Inc. , Ara has been pivotal in integrating innovative insurance solutions tailored for the solar sector, emphasizing customer-centric approaches and sustainable practices.