Avoiding Solar Scams

Avoid the scams that are unfortunately in the solar industry.

Home solar ownership can be satisfying and the industry itself is still in its infancy compared to where it’s going. With the ongoing investigations, articles shedding light on deception among big industry players, and the overall experience of working with a solar service provider, we wanted to share with you “4 Dirty Secrets in Solar” so you are prepared and can avoid these unfortunate practices.

Your Home Solar is the East Tennessee’s most honest residential solar provider. We are passionate about making solar attainable for homeowners, set proper expectations, and have your new solar system installed correctly for many years of trouble free service. We educate our customers and help them identify the correct system that fits their budget and their power needs.

4 Dirty Secrets in Solar

Solar power is truly a wonderful technology. It allows customers to lock in their energy costs for the foreseeable future. It reduces dependence on an antiquated grid system while backing up homes from the ever-more present grid failures from natural and man-made disasters. And, it has the potential to change the foreseeable future in power production. However, in my time working in the solar industry, I have discovered that there are many tactics employed by the large companies to manipulate and coerce customers into overpaying for systems that are inadequate to meet their needs. This is not a failing in the technology. It is a failure of the company to operate in a way that is respectful of their customers and representative of a lack of integrity. Bringing professional, affordable solar to our area are major reasons I formed Your Home Solar. As part of this goal, I will be writing a blog within our website to bring to light as many of these practices as possible so that customers can make the informed decision to get their own Your Home Solar system, lock in their energy costs, and backup their home in the case of emergencies or grid-failure.

Dirty Secret #1: Under-Sizing

It would seem as though this would be counterproductive. I mean, why would a company purposefully sell less than what is needed? Wouldn’t they naturally want to sell more? At first, you’d think, “yes, of course they would!” The answer to this question is a bit deeper into the business model though. It’s about profit margins and financing.

Dependent upon your source, the average nation-wide price per watt for installed solar is between $3.20 and $4.00 before adding in storage. Many of these large companies regularly charge prices between $6.20 and $8.00. Using a 5kW system as my reference, this takes the average price of their fully installed systems including storage from the national average of between $36,000 and $40,000 to an astounding range between $51,200 and $60,000. Do they charge these higher rates because they use better products? Simply put, no. They use the same, or as we’ll talk about in a later post, often lesser quality products than Your Home Solar. This means they are paying the same costs, or often even less, for their products as us and then over-charging in order to increase their profit-margin (the money the company gets to keep after all expenses have been paid).

That explains why they are charging more, but why would they then try to sell smaller systems? Well, a couple reasons explain this. First, people just won’t pay the price of the larger systems at these rates. This is especially true when you can so easily research what total costs should be. Second, they have financing limits to worry about. Financing companies charge a solar company a set rate to finance their customers. This is taken directly out of the costs of the system when the company sends the solar company the money. The problem is that most financing companies have a cap of somewhere between $65,000 and $100,000 dollars on the financing rates they offer these companies. After this set amount, they will either refuse to loan any more or they will increase the financing rate the company is forced to pay. So, how do these companies then get around the problem caused by higher prices created by the bloated profit margins and the financing cap placed by their financiers? They over-promise what the smaller systems are capable of.

While conducting research for our company, we had three major companies come into a home that did not have solar in order to give us estimates. We had already done a full work-up on this home and the regular energy usage of its owners. In order to meet the needs of the home, the homeowners would need a 15kW system with an 18kWh battery and an Automatic Transfer Switch in order to fully supply the home during power outages. The home would also need several trees removed before it could be considered a truly good candidate for solar. Of the three companies who visited, one promised our homeowners that a 5.6kW system with a battery smaller than 7kWh and no Automatic Transfer Switch would supply up to 60% of their needs. In reality, it would’ve supplied maybe 37% and would not have backed up the entire home in grid outages. The second company offered an 8kW system and a 9kWh battery that they promised would supply between 80% and 90% of the home’s needs. This would’ve supplied roughly 53% of the home’s needs. It also had no Automatic Transfer Switch and so would not have backed up the entire home in an outage with a battery that would’ve struggled anyway due to its limited size when compared to the home’s needs. The third company offered an identically sized system to the first with similar promises. It was the only one of the three that recommended the removal of trees though. The prices of all three companies were over $6.00/watt after “discounts”, with the highest coming in at $7.35/watt (also after discounts). Two of the three companies also promised whole-home backup from systems that could not provide this. None of the systems could’ve actually provided this.

So, as you can see, all three of these companies over-priced and over-promised on under-sized systems. These companies are more interested in their profit margin then they are their reputations or their customer’s satisfaction. As an added piece of their deceit, all three companies also refused to leave behind a quote after a very hardline closing session and referred to their system sizes by the number of solar panels rather than its size in kilowatts. Luckily, our people knew how to add up the panels and products to find the system size themselves or they would’ve otherwise never have known the actual sizes of the systems being proposed. At Your Home Solar, we strive for transparency with our customers. We will always provide our customers with a written quote that clearly states the size of the system and its price. We will never manipulate our customers through over-promising and under-delivering on over-priced products.

Dirty Secret #2: The Cash at Install Scam

As mentioned in “Dirty Little Secret #1: Under-Sizing”, when forming our company, we did our research and covertly had the three main solar companies in our area come into a home to try to sell us a solar system. One of the scammer’s tools all three tried to deploy on us was the line, “I have some great news for you! Right now, your area is eligible for a limited, one-time offer to actually give you cash-back after install! That’s right, yeah, we hand you a check for X amount of money! Isn’t that exciting!?” Wow! That’s so cool! You actually give me money!? So, why is this a scam and how is it used as a manipulative tool to get you to make an emotional decision? Glad you asked.

First, the money is real. Second, it’s your own that they are giving back to you. Third, they often take a very long time to send the check to you. So, here’s how the scam goes: before the company offers the deal, they add the same amount to the costs of the systems they are selling. Then, when you finance the system, they wait until the finance company has given them the last installment of the money they are owed and only then, finally, send you a check out of your own money that you financed. The company loses absolutely no money in the process, and you are now paying interest on this “great deal” they just gave you.

Evidence for this is in the fact that they are rarely ever able to use this tactic on cash-payers. This type of customer will just look at them and say, “well that’s stupid, just take it off the price of the system.” The cash-payer immediately realizes this is their own money. It is only because the average financed customer is naturally separated from the idea that this is their own money that this trick works.

An even more devious part of this plan is that they then use this little gem to cover for their other problems by saying, “we’ll pay your first year’s bills for you!” They can say this because the money they are giving you is often enough to pay your first year’s payments. They are not actually going to pay each one those payments. They are sending you this one-time check of your own money and then expecting you to apply that to your payments. So, you’re essentially using the money you financed to pay the payments and interest on the money you financed which then makes your payments higher and results in you paying more interest on that money.

However, I also said they are using this to cover for their problems. I’m sure you’re wondering what I meant by that statement. Well, it helps them with a few issues: first, they purposefully do not explain to customers that the process of getting a solar system fully installed and commissioned is a complex one (we’ll address this in a later DLS installment). They gloss over the fact that the full process usually takes between 6 and 8 weeks because they want to get customers to make uninformed, quick, decisions. Second, their internal processes are geared towards getting systems only partially installed on roofs or in the ground because that is all that is required by the agreement they have with their financing companies to get the rest of their money. Yep, all they need to do is send their financing company a picture of the panels on the roof, or a ground mount system installed, and they get the rest of their money. They do not have to have the system commissioned and turned on to get your money sent to them and thus they have little motivation to actually complete systems. We’ll address this little tool in a later installment called “Glass on the roof”. We will also address Your Home Solar’s solutions to these things in the later installments of Dirty Little Secrets.

Now, when you inevitably call in angry because you’ve been waiting weeks or even months to get a system turned on that they told you would only take two to three weeks to install, they will simply say “you shouldn’t be so angry, we are paying the first year of your payments anyway.” They will frame this as if they have done you a favor and they can’t understand why you are so upset. What they aren’t saying is that the money they so graciously sent you was your own money that you are now using to pay the higher payments and interest that you are stuck with due to this great present from them.

At Your Home Solar, we strive to be transparent with all our customers about pricing. We sell our services at a fair price and only offer real discounts. What do I mean by a “real discount”? We do not inflate the price to then lower it to make you feel as though you’re getting a better deal than you are. For instance, we offer what we call a Community Service Discount to all our customers that are active or retired military, teachers, policemen, firemen, and/or the medical field because we believe these are people that have incredibly tough, and often thankless, jobs in service to our communities and they deserve some recognition for that. This discount is a percentage of the total sale price. Our salesmen do not have the ability to raise or lower the prices they are charging their customers (yes, several companies allow and encourage their salesmen to do this before giving discounts) so when this discount is given, it reduces the overall price of the system. There is no trickery or manipulation. The price is a bit lower than what we can normally operate at while staying a healthy company that’s around for years to come, but we believe that the recognition of these great individuals is worth the cost. We offer a fair price to everyone and reduce the amount of profit the company makes in order to promote the discount given. It is that simple.

Dirty Secret #3: The Big Name Change

I have been in the construction and solar industries for years now. In that time, I have seen some and been blessed to work for great companies. However, I have also seen several and dealt with working for less than impressive ones. Some might refer to these companies as being shady. Well, if hiding your deeds from the light of day and running from accountability is the definition of shady, today’s DLS certainly fits the billing. In today’s world, the review is everything. A good company will do everything possible to get their good name out there. They remind their customers to submit their reviews. They work to take care of their customers and love it when these customers reward them by posting positive reviews on Google and other online forums. However, these “shady” companies will go a long way to hide their misdeeds. They will offer customers payments to post reviews. They will do almost anything possible to get customers to remove negative reviews including payment and free services. But, when all else fails and the name of the business is finally too sullied to be recovered even by these means or the lawsuits are too plentiful, they change the name completely.

Don’t get me wrong. Reputable businesses sometimes rebrand. Angie’s List became Angi when they merged with another online referral company. A local company I once worked for called Master Dry rebranded to Master Services when they added extra products and services because the “Dry” part of their name limited their market expertise in the eyes of new customers. Both companies though kept their names very similar to the old ones and had reputable reasons for changing them. They did not make drastic name changes and they were not running from an old reputation.

Branding is when a company gets their name and likeness on the minds of their customers. While only falling behind the number one purpose of getting new customers, branding is the number two reason for all advertising. From billboards to online advertising to magazines, getting a company’s brand recognized is everything. That way, when a customer does decide to seek out the service offered by that business, their name is the one that pops to the forefront of the customer’s mind thus fulfilling the number one reason for advertising, getting new customers. So, its easy to say that branding is a big deal for a company. A small company will spend thousands of dollars trying to get their name and brand recognized. A large company will spend millions. To say the least, a company is very invested in their brand. So, if a rebranding becomes necessary, the reputable company will usually try to stick relatively close to the original to avoid the risk of having to start all over again in their branding efforts.

However, when you see a company completely change their name, logos, and “brand”, that is usually a sign of very bad things because they are not going to throw the years of investment in that name and brand away unless they must. Recently, in the local area, the number one largest solar company completely changed their name, their logos, and all branding. They are completely unrecognizable as the same company. When I first saw the advertisements, I wondered if a new large company that I had not heard of had arrived in the area. It took a good bit of digging through their website to realize this was the new name, brand, and website of a large company that had been in the area for a couple years now. Gone was the old logo and name and inserted was a name that made them seem very “caring” and “colorful”. Nowhere to be found were the many previous car salesman like pictures of the bright, dyed, blonde-haired, owner. Inserted were images of their new head of “customer relations”. I don’t say these things to be mean. However, this company had earned a horrible reputation online, with state electrical inspectors, within the industry, and with the local utility companies they had to regularly work with. There have been rumors for months that the state inspectors were openly lobbying to have their business licenses revoked. Your Home Solar has even gotten calls from this company’s very upset customers that have mistaken us for them. That company is the worst of the worst.

It is my hope that customers will see through this façade and make an informed decision. I hope they will stay away from companies that employ the tactics I write about in these installments. Obviously, my advice would be to use Your Home Solar if you are in our service area. However, if you aren’t, find a local or regional provider that does not use tactics like these and uses reputable, American made, products like we do. You will get a much better product installation and you will have a local area person answer the phone if you ever have an issue. There is something to be said about doing business with someone that attends the same churches, goes to the same stores, and lives in the same communities as you. A company’s reputation is everything. When you see a company that seems to be running from theirs, my advice would be that you should follow suit and run away from them.

Dirty Secret #4: Glass On The Roof

The reason they overschedule their crews and take many months to complete jobs.

Crews are scheduled so that they have just enough time to get the solar panels installed and then move to another job where they do the same thing all over again. The electrical system integration and system commissioning is then put off for weeks or months while the crews are then sent to one new home after the next to start without finishing. The customer is then left to get more and more frustrated as their calls go unreturned and no answers are given as to why their systems have been left incomplete with only the panels on the roof or in the yard and an incomplete electrical system integration.

When I first saw this practice, I admit I was confused. I could not understand why a company would push crews to one house after the next while not giving them the time to finish the first house or at least reschedule them to go back very soon after. Then, I began to understand the payment schedule the companies have set up with their financing agencies. At the signing of the contracts, the financing agency pays a deposit that covers the cost of all the materials needed to complete the job. This money is sent directly to the materials supplier. The solar installer does not receive this money. They get their part of the money when they send in evidence that the system is installed. However, all that is needed to prove the system is installed is a picture of the solar panels installed at the home and a street-view picture of the home. With some companies, they require a picture of the inverter installed and commissioned. However, this is relatively easy to fake or gain by bypassing settings in the inverter just long enough to turn it on and then turn off. So, the crews are pushed to get these systems to exactly that status. The phrase most often used when the crews relent is to just get the “glass on the roof” and then we’ll worry about getting it finished later.

The systems are partially installed, most often with only the solar panels on the roof but sometimes with a partially installed electrical system as well. However, the company has now received the entirety of their money. There is no financial motivation for them to then complete the system. This system is then repeated time and time again and the money continues to flow inward. When you think about it, it’s a pretty good scheme to bring in as much quick money as possible. However, its long-term result is that the customers’ frustration builds. These customers then begin posting negative reviews online as well as complaining to state organizations and the Better Business Bureau. The name of the company is drug deeper and deeper into the gutter. It is a very short-term thought process derived to get money quickly with little thought given to the long-term viability of the company or the satisfaction of the customer. Because of this style of doing business, of the three main companies in the area, one has very recently completely changed their name to a more colorful one and completely reset their branding to escape the reputation they’ve created for themselves. The second has recently been kicked out of the Better Business Bureau. the third left the state a few years ago, retreated to their home state of Georgia, changed their name, and returned to the state of TN under this new name.

At Your Home Solar, we are built for the long-term viability of our company. We are servants to the community we live in. We schedule jobs to have them completed, not just started. The processes we follow are as follows: First, after the site assessment and when the customer agrees to the terms of the contract, we immediately begin processing all paperwork for the job including, but not limited to, what’s needed for the utility company, the state, and any homeowner’s associations that may be involved. Once this step is completed, we can begin the installation process. We schedule our crews to complete every job up until what point can be done to have the state and utility company’s inspection completed. The system cannot be fully commissioned until the state inspection is completed. Therefore, we get it to that point as quickly as possible. We cannot call for the inspections until our part is completed. Once the inspections have been requested, we wait for the state and utility to notify us of its completion. Unfortunately, they usually do not coordinate with us on exactly when this will be done. However, as soon as we are notified, we will get someone to the home as quickly as possible to commission and complete your system turn-on process.

This is a complex process that involves the coordination of many different parties and entities. We work very hard to do it in a transparent way that respects our customers and represents the integrity we are built upon. To further enforce this goal, we do not receive the final part of our money until the job is complete. The first deposit we receive at the signing and approval of contracts. This pays for the materials needed. The second deposit is received at the completion of our work and before the inspection. This pays for the labor of our crews and the work of our office staff. The final deposit we do not receive until the job has been fully inspected, commissioned, and turned on.  We do it this way because we want the customers to know that we are just as motivated as them to complete their job. I will be covering this process more thoroughly in a later installment of DLS titled “The myth of We’ll Have it Done in 2-4 weeks”.