Written By Rokas Beresniovas, Sacha Alaby and Chris Cucci
Across the country, climate-friendly financing institutions are helping a growing number of homeowners and community-based organizations access capital to install solar photovoltaic (PV) systems. There’s strong confidence that this trend will continue, regardless of political shifts, due to the increasing energy demands projected over the next two decades and the recognition that solar PV systems can significantly offset soaring electricity costs.
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However, this positive momentum and enthusiasm are marred by the actions of a small but troubling group of unscrupulous contractors and solar dealers engaging in predatory practices that target consumers and leaders of community-based organizations. These bad actors threaten the credibility and trust in the solar industry, preying on the uninformed and vulnerable under the guise of sustainability.
Widespread Issues: False Advertising and Aggressive Sales Tactics
Systemic issues plague the solar industry, particularly in two key areas: false advertising and aggressive sales tactics.
False advertising
Many residential homeowners and community-based organizations considering solar PV systems lack the technical expertise to evaluate claims about costs and performance accurately. Unfortunately, some solar dealers, financiers, and contractors exploit this knowledge gap, making promises that are simply too good to be true.
These actors advertise unrealistically high returns on investment and exaggerated savings or energy production benefits, fully aware that many of their customers lack the tools or expertise to verify these claims. For instance, they may claim that installing solar PV systems will result in massive financial windfalls or energy independence without considering factors like regional variability, local grid conditions, and installation quality.
The sales representatives often promise the homeowner that they will be able to fully monetize the solar ITC (investment tax credit) when that is not always the case and highly dependent on the financial position of the homeowner. People should always consult with their tax professionals and never rely on statements from a solar sales rep about their ability to take full advantage of tax credits. Additionally, the solar contractors are often working with specialty non-bank lenders who charge high “dealer fees,” which are hidden from the homeowner and instead built into the pricing when quoted for a new solar system cost. This dealer fee can increase the cost of solar by over 35% in many cases, greatly impacting the affordability of solar and hiding the true cost from the consumer.
High-pressure sales tactics and onerous financing contracts
The high-pressure tactics employed by some salespeople further erode trust in the solar industry. What starts as a friendly sales pitch often escalates into an uncomfortable and coercive experience. Stories abound of overly aggressive salespeople who create a sense of urgency, pressuring potential customers into signing complex financing agreements on the spot.
For those seeking to participate in the renewable energy movement, these predatory practices can turn what should be a positive and empowering experience into a source of stress and regret. Worse, the harm caused by unethical contractors and dealers ripples through communities, dampening enthusiasm for solar adoption and renewable energy as a whole.
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The Path Forward
To combat these issues, greater transparency and accountability are needed in the solar PV industry. Education campaigns, access to consumer-friendly tools, and stricter regulation of contractors and financiers can help protect vulnerable groups from falling victim to these tactics. Climate-friendly financing institutions must also play a proactive role in ensuring that their partners adhere to ethical business practices and prioritize consumer trust.
By addressing these challenges, we can shed light on predatory practices and advocate for a solar industry that truly serves the public good. Only by confronting these issues can we ensure that the benefits of solar PV systems reach everyone, fostering a truly equitable and sustainable transition to renewable energy.