Solar energy is booming across the country, including in Indiana. Companies like Cummins and Eli Lilly want to reduce their carbon footprint. Utilities are phasing out coal-fired power plants and replacing them with renewables.
But this growth is not only on such a large scale. Homeowners need solar power too. They want to reduce their electricity bills, they want to use clean energy.
Over the past two years, this interest has really peaked. During the pandemic, many households are using more electricity in their homes and are looking to offset some of it with solar power.
During this time, the government’s net metering program, which gives solar energy owners credits for energy returned to the grid, is also disappearing. It all caused a stir, said Zach Schalk, program director for Solar United Neighbors in Indiana.
“Unfortunately, I would say this is something that really flashed through my head in the COVID era,” he said.
That’s why, in this edition of Scrub Hub, we debunk the solar hoax. Let’s answer the following questions: what are they? How to find them?
We spoke to Schalke and turned to various resources such as the Better Business Bureau to give the Indians everything they need to know about these scams.
So what exactly is a solar scam? According to Schalke, most often these frauds manifest themselves in financial terms.
Companies are taking advantage of the end of net metering and uncertainty over new tariffs for rooftop solar customers.
“A lot of people are trying to get solar energy before the net metering deadline. So if there are ads everywhere or someone comes to your door, this is the easiest solution,” said Schalke. “There was a sense of urgency, so people just ran.”
Many companies are promising low-cost or even free solar installations, enticing homeowners to let them in, especially low- and middle-income Indians. Once there, solar installers “direct people to their financial products, which are often well above market rates,” Schalke said.
In Indiana, residential solar power currently costs $2 to $3 per watt. But according to Schalk, that cost skyrockets to $5 or more per watt due to companies’ financial products and additional fees.
“Then the Indians were locked in that contract,” he said. “So not only do homeowners still have their electricity bills, but they can pay more than their electricity bills each month.”
The Better Business Bureau recently issued a scam alert warning people about solar energy scams. The bureau said reps offering “free solar panels” could actually be “costing you a lot of time.”
The BBB warns that companies sometimes also require payment upfront, assuring homeowners they will be compensated through a non-existent government scheme.
While the financial part is the most common thing that attracts most people, there are also well-documented cases where scammers go after personal information or people have poor panel installation and security issues.
Problems with both funding and installation can be seen with Pink Energy, formerly 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 late last month after eight years of operation.
Clients are tied up with expensive financing contracts, paying for solar panels that don’t work and don’t produce electricity as promised.
These scams can manifest themselves in different ways. There will be many posts and advertisements about various deals online and on social media, many of which require you to enter contact and personal information to get more details.
Other methods include phone calls or even a personal knock on the door by a representative. Schalke said that his area is full of companies doing this – he even knocks on his door, despite the fact that solar panels are already visible on his roof.
Regardless of the approach, Schalke said there are several red flags that can help homeowners spot these scams.
The first thing he warns against is advertising without a company or brand name. If it’s just very generic and promises a huge solar deal, that’s the best sign of a lead generator, he says. This is where you enter your information so that companies can contact you and try to sell you a solar installation.
Schalk also warns against any messages or announcements that say the company has special plans or is partnering with your utility company. In Indiana, the utility does not offer special programs or partnerships for solar energy, he said.
Therefore, anything relating to such programs or content available “only in your community” is inaccurate. All to create a sense of urgency and pressure.
This is another warning sign to look out for, Schalke said. Anything that seems too aggressive or rushed to make a decision on the spot should not be. Companies will try to do this by stating that a particular offer is only available for a limited time or that they will only offer one option.
“They have a default funding option,” Schalke said, so if you don’t know what to ask for, you can’t find an alternative.
This can allow people to make hasty decisions without doing more research or assuming there are no better options.
This led Schalke to one of the last things he needed to pay attention to: pie in the sky. This includes things like free, low cost installation or even free installation – all designed to attract homeowners but distort how it works.
In addition to being able to spot these scams, there are things homeowners can do to avoid falling victim to one.
The BBB recommends that you do your research. Real incentive programs and reputable solar companies and contractors do exist, so research a company’s reputation and research companies in your area before accepting an unsolicited offer.
They also advise homeowners to stay strong and not succumb to high-pressure selling tactics. Companies will push and be very pushy until they make a decision, but Schalke said homeowners should take their time and take their time because it’s an important decision.
The BBB also advises homeowners to bid. They recommend contacting several solar panel installers in the area and getting offers from each one – this will help identify offers from legitimate companies and those that aren’t. Schalke also recommends getting an offer in writing.
After all, Schalke’s main advice is to ask a lot of questions. Ask about any aspect of the offer or contract that you don’t understand. If they don’t answer or agree with the question, consider it a red flag. Schalk also recommends learning about implied ROI and how they predict the value of a system.
Solar United Neighbors is also a resource that all homeowners should use, Schalke said. Even if you don’t work with or through an organization, you can contact them for free.
The group also has an entire page on its website dedicated to various types of financing options, which may include a home equity line of credit or other secured loans. Financing with an installer works well for some, Schalke said, but it all comes down to understanding the options.
“I always recommend taking a step back, getting more quotes and asking questions,” he said. “Don’t think that one option is the only one.”
Please contact IndyStar Correspondent Sarah Bowman at 317-444-6129 or email sarah.bowman@indystar.com. Follow her on Twitter and Facebook: @IndyStarSarah. Connect with IndyStar environmental reporters: join The Scrub on Facebook.
The IndyStar Environmental Reporting Project is generously supported by the nonprofit Nina Mason Pulliam Charitable Trust.