Solar power energy scams have erupted in Indiana. How to spot, avoid
Solar energy is booming across the country, including here in Indiana. Companies like Cummins and Eli Lilly want to reduce their carbon footprint. Utilities are shutting down coal-fired power plants and replacing them with renewable energy.
But this increase is not only taking place on this large scale. Homeowners want solar too. They want to reduce their electricity bills and use clean energy.
That interest has really intensified in the last two years. During the pandemic, many families used more electricity at home and wanted to cover part of it with solar energy.
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Also fading during this period was the state’s net metering program – which gave solar owners a credit for energy they sent back to the grid. All of this sparked an insane rush, said Zach Schalk, the program director for Indiana-based Solar United Neighbors.
The highly charged atmosphere also created the perfect environment for solar cheating.
“Unfortunately, I would say this is something in my mind that has really exploded in the COVID era,” he said.
That’s why for this installment of Scrub Hub we’re going to decode solar scams. We answer the questions: What are they? And how do you recognize them?
We spoke to Schalk and looked at a few different resources such as: B. the Better Business Bureau to give Hoosiers everything they need to know about these scams.
Short answer: what is a solar scam?
What is a solar scam anyway? The most common way these scams present themselves is on the financial side of things, Schalk said.
The companies took advantage of the uncertainty surrounding the end of net metering and the new tariffs for solar roof customers.
“Before the net metering deadline, many people tried to use solar power. So if there was advertising everywhere or people came to the door, that was the simplest solution,” said Schalk. “There was a sense of urgency, so people just ran with it.”
With promises of low-cost or even free solar installation, many companies are luring homeowners to get them through the door — especially for low- and middle-income Hoosiers. Once there, “solar installers direct people to their financing products, which are typically well above market prices,” Schalk said.
In Indiana, the cost of residential solar systems is currently around $2 to $3 per watt. But with these companies’ financing products and additional fees, those costs climb to as much as $5 or more per watt, according to Schalk.
“Then Hoosiers will be bound by this contract,” he said. “So not only do homeowners have their energy bills, they also have a monthly payment that may be larger than the energy bill.”
The Better Business Bureau recently issued a scam alert warning people about solar scams. The bureau said representatives offering “free solar panels” could actually “take up a lot of time”.
Sometimes companies also ask for a payment to cover upfront costs, the BBB warned, reassuring homeowners they’re being reimbursed by a government program that doesn’t exist.
While the financing part is the most common thing that moves most people, there are also well-documented cases of scammers chasing personal information or people having trouble with the installation and security of the poor quality panels.
Both the funding and installation issues can be seen at a company called Pink Energy, formerly known as Power Homes Solar. The BBB has received more than 1,500 complaints against the company over the past three years, and several states are investigating Pink Energy, which closed its doors late last month after eight years.
Customers were locked into expensive financing contracts that paid for solar panels that didn’t work and produce energy as promised.
Long answer: How do I spot and avoid the scams?
These scams can present themselves in a variety of ways. There will be many postings and advertisements online and on social media for various offers – many of which will ask you to fill in some contact and personal information to get more details.
Other methods include phone calls and even face-to-face meetings, with representatives knocking door-to-door. Schalk said his neighborhood was littered with companies doing just that – even knocking on his door despite visible solar panels already on its roof.
Regardless of the method, according to Schalk, there are several red flags that can help homeowners spot these scams.
The first thing he warns about is ads that don’t have a specific company name or branding. If it’s just very generic and promises great solar deals, that’s the best indication of a lead generator. This is where you enter your information so companies can contact you and try to sell you a solar system.
Schalk also cautions against posts and ads that talk about companies that have a special program or partnership with your utility. Here in Indiana, he said, there are no special programs or partnerships offered by solar utility companies.
So anything that talks about this type of program or something that is “only available in your community” is incorrect. All of this is meant to create a sense of urgency and pressure.
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That’s another warning sign to look out for, Schalk said. Anything that feels overly aggressive or pushy to make an instant decision is not how it should be. Companies will try to do this by saying that a particular offer is only available for a limited time, or they will only offer one option.
“They present the financing option as a standard,” said Schalk. So if you don’t know what to ask for, you won’t be able to find alternatives.
This can lead people to rush into a decision without doing further research or assuming there is no better choice.
Which brings Schalk to one of his last things to watch out for: pie-in-the-sky deals. This includes things like no down payment, low-cost installation, or even free installation — all of these things are used to captivate homeowners but misrepresent how it will work.
“Anything, if it sounds too good to be true,” said Schalk, “it probably is.”
In addition to being able to spot these scams, there are also steps homeowners can take to avoid becoming a victim of one of these scam attempts.
The BBB recommends doing your research. There are real incentive programs and reputable solar companies and contractors. So before you accept an unsolicited offer, check the company’s reputation and research the companies in your area.
They’re also telling homeowners to stay strong and not shy away from high-pressure sales tactics. Companies will push and be very persistent until they can make a decision – but Schalk said homeowners should not rush and take the time they need as this is a big decision.
The BBB also encourages homeowners to seek competing bids. They recommend contacting several solar installers in the area and getting quotes from each company – this will help identify the legitimate companies and offers from those that aren’t. Schalk also suggests obtaining the offers in writing.
And finally, Schalk’s biggest suggestion is to ask lots of questions. Ask about aspects of the offer or contract that you don’t understand – if they don’t answer or get upset about the question, take that as a red flag. Schalk also suggests asking for an estimated return on investment and how they forecast the value of the system.
Solar United Neighbors is also a resource that all homeowners should feel free to use, Schalk said. Reach out and call them toll-free even if you don’t work with or through the organization.
The group also has an entire page on its website devoted to different types of financing options, which may include a home equity line of credit or other secured loan. Financing with the installer can work well for some, Schalk said, but it comes down to understanding the options.
“I always advise stepping back, getting additional offers and asking questions,” he said. “Don’t assume that one option is the only option.”
Call IndyStar reporter Sarah Bowman at 317-444-6129 or email [email protected]. keep following her Twitter and Facebook: @IndyStarSarah. Connect with IndyStar’s environmental reporters: join The Scrub on Facebook.
IndyStar’s environmental reporting project is made possible through the generous support of the nonprofit Nina Mason Pulliam Charitable Trust.