What are Common Scam Tactics of Solar Companies?

What are Common Scam Tactics of Solar Companies?

How to Protect Yourself from Door-to-Door Solar Knockers and Unscrupulous Companies

We just posted about the Solar industry and how many Solar representatives are working for legitimate companies. However, like any industry, there are various ways that people have been scammed by con artists in Solar uniforms. The Renewable energy push is a massive transition in the energy sector with Billions of dollars switching hands from various other forms of energy production to Solar. This huge transition of wealth can attract opportunists that want a way to make a quick buck. today we will discuss in the nuances that exist and what to look out for from scam companies, con artists, and sometimes just honest mistakes. Just keep in mind many legitimate solar companies exist and equally despise these sorts of companies due to the bad reputation it brings the industry.

Regular Process for Solar Companies:

To begin, there can be good employees in bad companies and there can be bad employees in good companies. The point of a con artist or a scam company is to appear like a legitimate one; no-one would willingly sign up with someone they knew was actively deceiving them. So let's start with what a normal process looks like in the solar industry that way we can see how these processes have points where a scam company can alter the process.

Due to the massive explosion in the solar industry, more solar has been sold in the last 2-3 years than the previous 40 years combined. Multiple companies have experienced a massive growth spurt. These companies have two primary problems:

  1.  How to get new clients: Solar customers tend to not be repeat customers. You can only really install a solar system once on a roof. That means not only will this individual never be a repeat customer, but every future home owner in that house cannot be a future customer either. Therefore, there is always a top priority acquiring new customers in a mad dash to fill every single roof with solar panels. Solar companies usually have 3 ways to acquire customer:
    1. Marketing: TV ads, Facebook ads, social media ads. Everywhere advertisements are shown talking about solar programs. A homeowner clicks on an ad, fills out a form, and, if they meet the criteria, a solar representative gives them a presentation in person or remotely via zoom or phone call.
    2. Organic Growth: As a company gets more installs, there will be word of mouth in the neighborhood as neighbors ask who installed whose system. Referrals and word of mouth are perhaps the strongest push for growth because one person tells two and two tell four.
    3. Door Knockers: Door knockers are a great option for companies that don't want to spend as much money on marketing. If a sales rep does not make a sell, the company does not have to pay them. Usually door knockers have two distinct models: solo or teams. Solo door knockers will knock your door and come back to give the presentation as well. Teams have a group of door knockers knocking doors and one expert showing up to the appointments to give the presentation.
  2. Order Fulfillment: Once a solar system is sold, the company then must find a way to get panels on the rooftop. There are two primary ways that this is done as well:
    1. In-House: This model of business is where the solar agency that sells the panels is also the same business that installs the panels. There are a variety of ways that they may do so. Some companies have a warehouse of panels nearby while others ship them in and just have their own install crew.
    2. Contracted Out: Many solar agencies are merely sales agencies. They act as middlemen for everything. They just sell the solar system, then they reach out to solar install companies, pay them a cut of the deal, and have this in-house solar install company take care of the install.

Scam Companies

Now that we know what normal processes look like, we can better identify a scam company. To start, there are varying degrees that employees/contractors may be aware they work for a bad company. In the door to door industry, turnover rate is quite high due to heavy reliance on commission to get paid paired with the extreme emotional exhaustion an individual takes getting rejected or yelled at all day by homeowners. As a result, it is very common for door knockers to last a few months, quit, and then get rehired. These bottom level door knockers, if they merely set the appointment, are usually very ignorant to the company that they work for. The first scam that occurs is tricking individuals to work for a bad company. 
If you are talking to an appointment setter, there is a high likelihood of authentic ignorance. Therefore, the informed homeowner needs to look at the company itself and spot the warning signs. Scam companies are designed to be easy to create, easy to move, and hard to pin liability upon. Common signs to look for:

  • Sales Organization: A Scam company will have a better chance of distancing liability on itself if the installation of the solar system is done by a different organization. Having a permanent install crew makes it more difficult to leave a local area. Additionally, it is easier to contract out a lot of new workers to set appointments for a scam company without their awareness. 
  • Non-Local Company: A common tactic for solar sales organizations is known as "blitzing." A crew of sales representatives will drive or fly out to a location, rent a residence, then proceed to sell as many homes in the area as possible before leaving the area. These homes sold would then be installed by a local solar installer. A scam company can use a similar tactic to come into an area, charge twice the rates as local companies, and then leave before anyone has time to be angry.
  • Non-Verified: Businesses have various ways of having consequences catch up to them. A scam company that has been around long enough will have a terrible Better Business Bureau (BBB) rating, such as F. These companies will need to rebrand or start a new organization to have no negative reviews to lower their score. 
  • Not on Trusted Installer List: Depending on your area, there may be a trusted solar contractor registry that the state or power companies put together. If such a list exists, companies in them have been around long enough to show legitimacy. If your solar company isn't part of these lists, exercise caution.
To note, legitimate solar companies can exist for each of these categories. There are legitimate sales organizations that have a national presence or start up companies that have not had the time to be verified or on a trusted list. However, it is smart to exercise caution. Good questions to ask the door knocker:

  • Do you do your own installs?
  • Are you a local company? If so, where is your office located?
  • Are you registered on the trusted installer list (For example, The North American Board of Certified Energy Practitioners - NABCEP)
  • Is your company licensed in the State?

The Con Artist

Next we talk about con artists. Scam companies often dupe employees, this is different than con artists. These individuals willingly deceive customers. They exist in higher ranks of a scam company or attempt to hide in lower ranks of a legitimate company. Their goal is simple, to make as much money as humanly possible in as fast a time as possible in the solar industry during the massive renewable energy switchover, no matter what. 
The goal is a sale, the method is through deception, but the way this is implemented could be done is usually in two primary ways: verbal deception and data manipulation.

 Verbal Deception:

  • Lying about who they work for: A scam artist, in order to build trust, might try to pretend to be part of an organization that is well trusted. A common example is to say that they work for the power company. Technically solar companies can work with the power company to set you up with a sell back program, but they are their own organization.
  • Contradicting the Contract: A scam artist might say whatever it takes to get you sign on the dotted line. This sometimes might be saying things that are in direct opposition to what is written in the contract. It is always good to properly read through a contract because a con artist might say that you are not committing to anything with signing but in fact you are. 
  • Lying about a Program: Lying about a program might be a common way to make solar look better, or to get you to sign up thinking it will benefit you. The most common example to lie about is tax credits. An elder couple on social security may not have enough tax liability to qualify for solar tax credits, but the solar scammer may say that 30% of the system value comes to you in the form of a check. A clear lie to sign someone up that would otherwise not sign up if they knew there was no benefit switching to solar.

Data Manipulation:

  • Alter Panel Production: A scammer may say that your panels are producing twice the amount that they are actually going to produce. This is commonly done by placing panels in areas full of shade or on a roof facing away from the sun.
  • Altering Energy Data: Perhaps the solar data portion is correct, and these panels produce 500 watts each, the next step is seeing how many panels you need. If you explain that you have an electric bill of $200 a month, a sneaky tactic would be to alter the price of energy on a solar presentation. If energy normally costs 10 cents a kilowatt hour, but then 20 cents was implemented instead, then the solar presentation would show $200 bill but half as much energy to get there. The end result is it looks like you save a ton of money each month but the scammer is just selling you half as many panels that are necessary to remove your electric bill.
  • Raising the Cost: In some organizations, the price of the solar panels are within the control of the solar salesman. This can be useful if the scope of work changes and it costs more to install the solar system because more electrical work is necessary. However, a con artist can use this system to their advantage and will try to sell the system for an amount far greater than fair market value.

Legitimate companies have redundancies in place to catch these fraudulent activities. That is because a company that is caught doing such activities would be kicked out of trusted installer lists and lose far more money than just trying to scam one person. If the solar company is required to adhere to certain regulations, there is usually oversight to ensure these are being met. If solar data or energy data is off from the correct amount, the new numbers have to be presented to the customer. Solar production data usually comes from legitimate sources like PVWatts, the national renewable energy laboratory, while energy data is in line with power companies. The cost of a system cannot be raised to whatever is desired, rather a company must charge around fair market rate. 
Have a good understanding on some basic parts of solar. However, understand the industry is always changing. East and West facing panels used to be unviable, but due to panel efficiency increasing these sides can still save people money now.

What you should do to be prepared:

Now that you know scam companies and con artists exist, what should you do? Solar installation can be a very complicated affair. Sometimes beginner solar reps don't even know all the information and may incorrectly explain the tax credits to you.

If you are interested in solar, be sure to do your research ahead of time into tax credits, trusted installer lists, power company sell back program, and anything else that troubles you.

From there, if you know someone who went solar, go ask them about their experiences. If there was a positive experience, get a quote from that company. However, unless you trust an expert or have done the research yourself, be sure to get 3 quotes from different companies. Look for trusted installer lists in your area and reach out to them. Not everyone qualifies.

If you would prefer assistance in looking into solar, try reaching out here. If I am not too busy, I will help you from beginning to end by researching your local area to negotiating with solar companies for the best rate possible.

In Conclusion

The Solar industry is a rapidly growing sector, and with all this money there are the occasional opportunists that want to make a quick buck. Be on the look out for spotting scam companies and learn the ways a con artist can try to smoothly pull one over you. If you don't feel comfortable with someone at the door, there are ways to track the legitimacy of a company. Solar is a great option for many people looking to save money, help the planet, and get away from the power company. Just make sure to do so from a reputable source.


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