Clean Energy Scams Surge

How to spot and avoid scammers touting big savings from bogus solar and other clean energy plans

Sari Harrar,

AARP

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En español

Published September 11, 2024

a burglar climbing out of a house using a solar panel

Chris Gash

Carliss Wileman wasn’t really interested in solar panels for her New Caney, Texas, home. But when a solar energy salesman stopped by in May 2022 promising no more electric bills and a $30,000 tax rebate, she signed a form on his iPad that she thought was just paperwork. “Now I have an $89,000 loan, 50 panels on my roof, and my porch leaks,” says the 75-year-old retired bar and restaurant owner.

Wileman says she never applied for the loan, never received a tax incentive because she doesn’t pay income tax, and her solar panels “may work a little, but my electric bills are higher for some reason.”

Her experience is not uncommon.

A growing problem

Fueled by a drop in solar panel costs, an urge to fight climate change, the availability of real but sometimes confusing government incentives and a desire to save on rising energy bills, solar panel scams are hitting consumers across the United States.

“I think it’s a perfect storm,” says Minnesota Assistant Attorney General Noah Lewellen. “There are a lot of start-up companies,” and some make promises that never come true.

Scammers exploit the “green halo” around renewable energy to pull victims in, says Robert Mascio, director of Investor Education Outreach at the not-for-profit Financial Industry Regulatory Authority (FINRA). They “take advantage of people’s inclination to do good,” Mascio says. In a 2023 Stanford University survey of 993 investors, 76 percent of people 58 and older said they were concerned about the environment and about 30 percent were willing to lose a little money to help clean it up.

Attorneys general in at least 15 states have investigated or filed suits against solar installers and lenders. In May, the Nevada State Contractors Board started a solar investigations unit. But the scams continue. The sales pitch often starts with a solar salesperson knocking on the front door, calling on the phone or connecting on social media. Some scammers may say they’re consultants from your power company, utilities warn.

“Solar has so much potential for good. It’s a real shame a handful of bad actors are giving it a black eye,” says Philadelphia-area consumer protection lawyer Andrew Milz. “People think they’re doing something good for the environment and it should eliminate their electric bill, but that’s not always the case.”

How to avoid clean energy scams

Do your homework before investing. “Don’t rely on marketing hype,” Mascio says. Start investigating whether a green energy investment is a scam or an opportunity by checking whether the seller is a licensed broker on FINRA’s BrokerCheck, at brokercheck.finra.org, Mascio suggests. Skip schemes that sound too good to be true. And “walk away from unsolicited investment offers, whether directed to you through mail, social media, chat rooms, text message or phone call,” he says.

Take time to research costs and benefits on your own by getting bids from several contractors in your area, suggests Amy Nofziger, director of victim support for the AARP Fraud Watch Network. Check first that installers are licensed, certified and/or registered with organizations such as the North American Board of Certified Energy Practitioners. Look for complaints and problems by visiting the Better Business Bureau national business directory at bbb.org/search.

Your state’s department of energy or consumer protection bureau may have a list of qualified solar installers or information to let you know whether a contractor is registered and/or licensed. To learn about states’ solar licensing requirements for contractors, check the Interstate Renewable Energy Council’s National Solar Licensing Database.

Never give personal information to someone contacting you out of the blue. Some clean energy come-ons are a ruse to get your personal identifying information. In June, Huntsville Utilities in Alabama warned residents about callers posing as utility representatives offering cheap solar panels, then gathering personal financial data and homeownership information. Utility company workers will never reach out to you asking for your Social Security number, credit card number or bank account information — but impostors will.

Don't succumb to high-pressure tactics. Clean energy scammers often claim to offer a special deal — if you act right now. If you feel pressured to act immediately on a solar or other renewable energy deal, just say no, advises Melanie McGovern, spokesperson for the Better Business Bureau.

Reading the fine print before signing anything. Scammer salespeople may misrepresent the reason they want your signature or initials, then misuse them to open a loan in your name and OK panel installation. “I signed what I thought was a form to pre-authorize a loan just in case, and ended up with a $42,000 solar panel loan I never wanted or asked for,” says Neda Yarnall, 50, a New Jersey real estate agent who in June filed a class-action lawsuit against a financial lender involved with solar panel financing.

Close to signing a contract? “Have an attorney review it first,” McGovern says.

Know that the government doesn't offer free solar panels, and what tax credits are available. “The federal government does not have any programs that install solar panels on the homes of Americans for free,” according to the U.S. Department of Energy. To learn more about whether the federal solar investment tax credit and state subsidies for solar installations would benefit you, go to the DOE’s Solar Energy Technologies Office. The Internal Revenue Service has information about residential clean energy on its website. You can also ask your utility company about how solar panels would affect your electric bill.

Beware of undisclosed fees tacked onto solar loans. Do your own search for financing, suggests Minnesota Assistant Attorney General Adam Welle. State investigations found unscrupulous solar lenders added a 10–30 percent fee to loans and increased monthly payments if consumers didn’t turn over their tax savings to the lender.

Report scams. Report energy scams to the FBI’s Internet Crime Complaint Center, IC3.gov. You can also report them to the Better Business Bureau or your state’s attorney general’s office.