Installing solar panels on your home is a big investment and a new experience for many buyers. Now, a “small number” of solar panel companies that use overly aggressive sales tactics or outright defraud consumers are being put under federal scrutiny.
The U.S. Treasury Department, Consumer Financial Protection Bureau and Federal Trade Commission, among other agencies, said they are working to protect consumers from unfair and deceptive sales practices in the U.S. solar industry, which is expected to grow rapidly across the country in the next few years. The government agencies are launching an information drive, creating websites to educate solar buyers and providing resources where consumers can file complaints about scams and other bad business practices.
As solar power has become more popular, some companies have exploited consumers with usurious loans and high-cost credit, authorities say. Red flags include not letting buyers see their solar system contracts, promising incentives that homeowners don’t qualify for, or letting the loan’s interest rate skyrocket over time. CNET and other websites have published articles warning consumers about solar industry scams that could give the entire industry a bad name.
Read more: Best Solar Companies in August 2024
“After the Supreme Court ruled in favor of its funding structure in May, the CFPB appears to have gained more confidence in its power to protect consumers from unfair practices,” said CNET Editor-in-Chief Tiffany Connors. “Compared to the first half of the year, the agency has made more decisions on a wide range of issues, including buy-now-pay-later services, mortgage servicing and payroll advances.”
Fraudulent loans have become so widespread that in 2021, HBO’s “Last Week Tonight With John Oliver” devoted an entire episode to the Property Assessed Clean Energy Program, a program that finances green home improvements, and how fraudulent loans for clean energy improvements put homeowners at risk.
The industry itself is trying to crack down on scammers with new standards. The Solar Energy Industries Association has proposed standards to protect homeowners and small businesses from solar scams and misleading offers, and to prevent them from botched installations themselves.
Federal agencies’ actions to combat solar industry fraud indicate that the government is addressing a widespread problem plaguing the growing solar energy market.
CNET has a vetted list of some of the best solar energy companies in the country, but no matter which company you choose, it’s always best to get multiple quotes and research the company before you commit to an installer.
