Solar Scams

Wed, 05/11/2016 - 19:27 -- admin


The bulk of a solar sales person's income is commission and many are commission only. The turnover is high as the time between the sale and payment is typically 3 months and not many folks can afford the cash flow implications. The industry is also complicated as the sales person has to not only understand the technology but also details of construction and how to connect to the utility.The pressure is on to get a sale quickly before competition get involved and muddy the waters. The temptation is therefore high to get the sale rather than do what is best for the home owner. Following are some of the tricks carried out by the solar sales person to make their offering look compelling and get a quick decision.

1. Optimistic production figures

- Assume panels always clean

- Ignore 7% degradation over 20 years

- Assume no shade ( Palm tress are difficult to model), close to mountain so evening or morning shade

- Assume panels pointing due south

- Assume panels are at optimal tilt of 19 degrees as opposed to 16/17 degrees common in the valley or even assume panels on flat roofs can be at 19 degrees…usually designed for 10 degrees

- Panel production figures inflated

2. Lease terms

- substantial set up costs hidden in the financing

- when house sold, hidden costs to transfer the lease

- if prospective buyer of house doesn’t qualify for taking on the lease or doesn’t want a lease then punitive charges to buy out the lease

- homeowner committed to taking all the energy generated by the system. If system oversized then homeowner ends up paying a lot for electricity which they give to the utility and get minimal compensation

3. Sales practices

- Sales reps who go into the home should hold a Home Improvement Salesperson license. This ensures the person has had a background check and is fingerprinted etc. Few reps do as the industry is generally commission only and reps do not stay for long

- Focus on replacing last 12 months usage with solar. Rarely is an attempt made to identify energy saving measures…why should the rep find a way to reduce the size of the system when they are only paid on the size of the system sold

- Emphasis from some companies on pricey panels which deliver limited benefits for the consumer. Why pay 10% more to have 30 panels as opposed to 34 if the 34 fit conveniently on the roof

- Targeting seniors. I have briefed Senator Stone on these issues and he is reviewing my comments.

- Misleading advertising e.g. implying there is a City or County rebate which is only available through one company

- Low price initial system with rapidly increasing cost over time

- Exaggerated price escalation of utility prices

- Not understanding home owner’s specific situation. E.g ignoring the fact that they are on a reduced rate for medical or financial reasons with the utility

- Outright lying to confuse seniors e.g. Government has mandated solar panels on certain homes and you need to do it now

- Giving a highly optimistic install date

4. Potential solutions

Solar companies need to be licensed to sell in a specific city. Terms of licensing include:

- Warrant that all sales reps selling within the jurisdiction have a Home improvement salesperson license. This ensure the reps have been background checked, finger printed etc which gives some protection to the home owner

- Homeowner given printout of the California solar institute estimate of the production based on the design being submitted to the city for permitting

- If a lease is being sold then the homeowner is given a summary of the lease terms giving the average cost per kWh over the life of the system, the buy out cost if the lease is terminated at year 5, 10 and 20 years.

- additional form required with permit pack covering the above information and signed by an authorized signatory of the solar company.

- work with an independent professional who is your advisor, working for you to get you the best value for money solution.

For further information or a free energy audit please contact Ian MacKinnon 760 880 1169