Misleading claims of no electric bill. False promises of free solar panels or tax rebate checks. Posing as an electric cooperative representative or co-op partner.
These are some of the deceptive practices that co-ops and the federal government are warning consumers about under a growing number of residential solar scams.
On Aug. 7, the Treasury Department issued an advisory noting a rise in consumer complaints about such practices as rooftop solar installations surge, emphasizing that scams are against the law.
The complaints involve “a small number of unscrupulous solar companies” that consumers say deceived them on the costs and savings of the systems and relied on aggressive sales and marketing tactics, the advisory stated.
Co-ops are also sounding the alarm, saying the incidents have climbed in recent years with devastating consequences for some members.
“Solar is great if sized appropriately and the member has made an educated decision with accurate calculations,” said Sheena Lankford, vice president of member engagement and communications at Southside Electric Cooperative out of Crewe, Virginia.
But some companies are not honestly or accurately presenting the benefits and costs to individual households, stranding them with uneconomic or unproductive panels, according to Lankford.
“Several of our members have been deceptively sold solar and have had solar installed on roofs that need replacement, under trees, and in homes that are financially struggling,” she said. “Many of the solar companies have gone under, and our members have no one to service their panels when needed.”
Many members who fall victim to such schemes are unable to get out of their contracts, said Brittney Davis, communications supervisor at Tri-County Electric Cooperative based in Hooker, Oklahoma.
“It's incredibly upsetting for these members to realize they will continue receiving an electric bill,” Davis said. “Initially, they are often frustrated with the cooperative, but once they understand they've been scammed, it’s heartbreaking for our member service representatives to hear their stories.”
How to spot and report scams
Treasury’s advisory listed several ways to avoid scams.
It urged consumers to gather and compare several quotes or bids, if they are interested in adding solar to their homes. They should also check a contractor’s history with state consumer agencies and licensing boards; make sure the advertised cost savings are guaranteed; and consult a lawyer, if possible, to help understand contract terms and lengths.
If a business doesn’t make good on its promises or cheats consumers out of money, Treasury encouraged affected homes to report fraud to the Federal Trade Commission at ReportFraud.FTC.gov. The advisory also included links to locate state consumer protection offices and utility consumer advocates and to find nonprofit legal services for challenging fraud, abuse and deception.
The advisory was one of several new actions announced by Treasury, the Consumer Financial Protection Bureau and the Federal Trade Commission to address unfair and deceptive consumer practices in the residential solar power sector. The agencies also announced a new partnership with the Department of Energy and Department of Housing and Urban Development to help prevent predatory practices.
Co-ops are already being proactive on several fronts, including using social media, newsletters and emails to alert members about scammers. As an example, SECO Energy in Sumterville, Florida, devoted an entire newsletter in July to scam warnings and is advising members to use caution when authorizing bill payments through websites that are not SECOEnergy.com.
Co-ops are also encouraging their communities to use them as resources to decide on residential solar projects and what questions to ask rooftop solar providers.
Furthermore, some cooperatives may also require interconnection agreements for solar projects. The agreements may stipulate that installers must obtain an approved permit from the governing county or city and that co-op members installing a solar photovoltaic system will be placed on a specific rate.
Communication between members and their local co-op is key, said Tolu Omotoso, director of energy solutions at NRECA. “A lot of co-ops have energy advisers or member service professionals who are knowledgeable about these assets, this technology and also the companies. So, they will be able to tell you which company has maybe not been too good to our members.”