Nov
Solar Scams to Watch Out For
Solar scams have hurt our industry. In the quest for cleaner and more sustainable energy sources, solar power has emerged as a popular choice for environmentally conscious consumers, consumers looking to save money, and consumers looking to protect against inflation. However, with the rising demand for solar installations, the industry has also witnessed an unfortunate increase in deceptive practices. As consumers explore the benefits of solar energy, it’s crucial to be aware of potential scams and disingenuous sales tactics employed by some solar companies.
Overpromising Savings:
- One common tactic used by unscrupulous solar companies is the exaggeration of potential savings. Beware of promises that seem too good to be true. Some companies may overstate the efficiency of their solar panels or provide unrealistic estimates of energy savings to lure unsuspecting customers.
High-Pressure Sales Tactics:
- Solar scam may not be the right description for this one, rather deceptive sales practices. Becasue some solar companies resort to high-pressure sales tactics to force quick decisions. Be cautious if a sales representative insists on an immediate commitment without giving you the time to research and compare different options. Legitimate companies allow consumers to make informed decisions at their own pace. Additionally, contracts often have a right of cancellation built into them. If you decide within the timeframe allowed that you’ve changed your mind, don’t hesitate to exercise that right. We recommend that it is done in writing and via email to leave a documented date stamp.
Unsubstantiated Warranty Claims:
- Dishonest solar companies may make exaggerated claims about the longevity and performance of their products. Be sure to research and verify the warranty information provided. Legitimate companies are transparent about the warranty coverage and have documentation to support their claims. Feel free to look up the warranty information directly from the panel manufacturer. One of the biggest warranties to pay attention to is the degradation amount. This essentially means that the panels will still retain a certain production percentage at a given time in the future.
Unrealistic Government Incentives:
- If a solar company told you that they “partnered with the government”, be cautious. It is a very misleading statement. The government does offer some tax incentives, but they aren’t specifically through a company. Scam artists often exploit government incentives and rebates to attract customers. Be cautious of companies that promise unrealistic returns based on incentives that may not be applicable to your specific situation. Verify incentive eligibility through reliable sources and government websites.
When it comes to these tax incentives, we always recommend speaking to an a tax professional. If you research the ITC tax credit, you’ll find that it is labeled a “nonrefundable tax credit”. However, that doesn’t mean that it can’t increase your refund amount. The tax credit itself isn’t refundable, but the tax credit can reduce the amount of tax liability you have, meaning that you get more of the money back that has been withheld throughout the year.
Think of it this way. If nothing has been withheld and you had no federal tax liability, you wouldn’t be eligible for a refund. However, if you work at a W2 job for instance, they withhold from your check every pay cycle. Suppose you had 20k withheld, and you had a 20k tax liability, your refund would be $0. However if you had a 10k tax credit from going solar, you would receive a $10k refund. You wouldn’t be paid from the credit, but the amount you owe the government would reduce from $20k to $10k, meaning that you overpaid by 10k (resulting in you getting that money back).
It’s also important to consider that it is an income based tax credit dependent on your tax liability, so again we recommend discussing with a tax professional to find out if you would qualify.
Bait-and-Switch Tactics:
- Some solar companies may initially provide enticing offers but later switch the terms of the agreement. Always read contracts thoroughly and ensure that the terms discussed during the sales pitch are accurately reflected in the written agreement.
Non-Compliance with Industry Standards:
- Reputable solar companies adhere to industry standards and certifications. Scammers may cut corners by using substandard materials or failing to comply with safety regulations. Verify the certifications and credentials of the solar products and installations offered by the company.
As the demand for solar energy continues to grow, so does the need for consumer awareness. Protect yourself from potential solar scams by thoroughly researching companies, carefully reviewing contracts, and making sure you are dealing with a company you can trust before making a decision. If something feels off, it probably is. By staying informed and vigilant, you can harness the benefits of solar energy while avoiding the pitfalls of disingenuous sales tactics. Remember, a reputable solar provider prioritizes transparency, honesty, and the long-term satisfaction of its customers.