The federal government is taking steps to address the rising number of scams plaguing the troubled residential solar industry.
The U.S. Department of the Treasury, the Consumer Financial Protection Bureau, and the Federal Trade Commission told TIME that they were launching a unified effort on Aug. 7 to encourage consumers to report scammy behaviors, while also educating consumers about what those bad actors are doing. By getting more consumers to report scammy solar companies, government officials said, they can more effectively track complaints and seek to hold accountable companies that violate the law.
[time-brightcove not-tgx=”true”]“We’re kicking off this effort with an advisory to make consumers aware of these scams and enable them to file complaints with key regulators who can put a stop to bad actors,” says U.S. Deputy Secretary of the Treasury Wally Adeyemo. “We look forward to working hand-in-hand to advance the goals of helping consumers lower the cost of powering their homes, while also protecting them against the unfair, abusive, and deceptive practices used by a small number of businesses.”
The residential solar industry has boomed in recent years, thanks in part to incentives extended in the Inflation Reduction Act. But not all of that growth has come from customers fully informed about what they were buying. Solar companies rely heavily on independent contractors incentivized to make a sale. These door-to-door salesmen have little obligation to ensure that consumers are getting a good deal; in fact, some get more money the higher the price they charge consumers for a system. Hundreds of lawsuits allege that these salesmen overpromise and underdeliver, often telling people they won’t have an electric bill or that they will get a check from the government if they sign up for solar panels. (The federal incentive is actually a tax credit, so it comes in the form of a tax break, rather than a government check.) Other lawsuits allege that solar salesmen have forged signatures on electronic records or otherwise obscure what people are signing.
Read More: How Solar Sales Bros Threaten the Green Energy Transition.
The government effort is a modest first step. It provides fact sheets for consumers about what they should know before they sign up for solar panels. The fact sheets warn about sales pitches that say that solar is a government program or that guarantee customers will not have an energy bill. Consumers should also be wary of salespeople with limited-time offers or other high-pressure sales tactics, salespeople who only use electronic records and electronic signatures, and companies that have excessive fees such as termination fees or sign-up fees, the advisories say.
The federal notices outline what consumers should do if they have been scammed. Filing a complaint is paramount, the agencies say, at ReportFraud.FTC.gov, as well as with the Consumer Financial Protection Bureau. Some states also have consumer protection bureaus where consumers can file complaints.
While the advisories are an attempt to educate consumers, previous government efforts to regulate solar companies have fallen short. Attorneys general in a number of states have filed actions against solar companies in the past few years, but have often reached settlements that amount to a slap on the wrist. New Jersey, for instance, reached a settlement with Vivint Solar Developer LLC in 2019 that saw Vivint (now owned by SunRun) agree to pay $122,000 and “significantly change” its business practices to resolve allegations that it engaged in deceptive sales practices and violated consumer protection laws. In 2022, consumers filed another lawsuit against Vivint and SunRun alleging that Vivint “continues to engage in deceptive door-to-door solicitation practices” that violate consumer laws.
Read More: The Rooftop Solar Industry Could Be on the Verge of Collapse.
Meanwhile, consumer complaints about solar-panel salespeople have skyrocketed in recent years. The FTC received 5,331 complaints containing the phrase “solar panels” between Jan. 1 and Sept. 19 of 2023, up 31% from the entire year of 2022 and up 746% since 2018, when it received just 630 complaints.
