Roof-Top Solar Panels — the Latest Homeowner Fraud

The rooftop solar panel scam is the latest homeowner fraud. Homeowners are promised to save energy, have a low installation cost, and save on their monthly bills. But instead they are not told about the lien on their property when entering the solar panel lease or the steady increase in payments year after year if the electric utility doesn’t raise the rates.

Roof-Top Solar Panels — the Latest Homeowner Fraud

By Bradley A. Blakeman
Friday, 14 Mar 2014 03:46 PM

As consumers all across America seek to save on utility-provided energy for their homes, they have become the latest victims of consumer fraud by third party renewable contractor/installers.
Here is how the scam works:
Homeowners and small businesses are approached by non-utility third-party contractor/installers promising significant energy savings and offering complete installation of a roof-top solar system with the enticement of a 20-year lease with small or no upfront costs for installation or operation.
These savings estimates are based on inflated assumptions about future utility rates that are unsupported by any real or reliable analysis. The consumers do not own the system that is affixed to their homes and are merely purchasing the “electricity” that is generated from an entity other than their public utility.
Homeowners are not told that, in entering into the solar lease, the solar company will secure the contractual obligations of the customer by placing a lien or other encumbrance on the homeowner’s property. As a result, the contractor/installer or holder in due course of the lien has a security on the entire real property not just on the solar installation.
Like any scam to be effective, the come on must be too good to be true – energy savings, no upfront costs, teaser rates in the early years, etc. Left for the fine print is the fact that the customer’s initially low lease payments escalates year after year, and that he or she may end up paying more for electricity just a few years out if their electric utility doesn’t raise rates as assumed or if other charges are made to electric policy that upset the dubious economics of the lease.
And, like any scam, the perpetrators must act quick with high pressure sales tactics employed to sign up as many victims as possible before the flaws in the leasing model are made public and then sell the leases which are secured by liens to others at a deep discount, offering no remedy to the solar customer if the profiteer goes out of business or simply walk away.
The homeowner soon discovers their alleged energy cost savings are nowhere near that which was promised. If the homeowner refuses to pay on what is now an upside-down lease, they learn for the first time that the solar profiteer placed a lien on their home – a lien that impairs the customer’s ability to sell their home and that forces them to continue to pay under a bad contract at fear and risk of potential foreclosure or other legal action by the new holder of the lease.
This is frighteningly reminiscent of the mortgage-bundling scam earlier this decade.
Nothing will stop the unscrupulous contractor/installer from bundling leases and selling them to investors, funds and banks under the guise of legitimate investments.
It has been reported that consumers have made numerous complaints against one of the largest solar roof top installers whereby consumers are telling horror stories of high-pressure sales, long delays in installations far in excess of what was promised, and no energy savings. In many instances consumers were unaware that their homes would be subject to liens in their homes as a result of the lease.
Probably the only time a homeowner will come to realize there is a lien on their property is when there is a default or when they try to sell their homes. Many times liens cause long delays and great expense to clear up a lien prior to the closing of title. Add to this the fact that it would be very difficult to sell a home with an inoperable solar energy system affixed to a roof. The cost of removal of the system alone would be of great expense to homeowners.
Many consumers have complained that installations were found to have defective equipment, which limited their solar production and required households having to continue to purchase all of their electricity from the public utility electricity resulting in huge unforeseen bills for the homeowner.
In order to legitimize and advance the fraud, contractor/installers have sought out the assistance of local real estate brokers, architects and contractors, paying them a referral fee for every homeowner who signs up for a solar roof top installation.
Many roof top solar panel systems and associated metering equipment is complicated to understand thus making consumers easy marks for this type of fraud since they are ignorant of the necessary information needed to evaluate a home energy system and the economic and legal ramifications of the installation, savings, lease and lien aspects of “the deal.”
And, once the installation has been made the contractor/installer walks away leaving no one to handle customer service or monitor the equipment. There is a real concern that the solar equipment permanently affixed to consumer’s homes can be dangerous if not properly maintained. At best there could be leaks and at worst fire and loss of property and life.
Homeowners are also unaware that such installations may cause increases in homeowner’s insurance premiums — as the equipment must be insured in order to be covered. In many cases, even though the consumer does not own the solar panel equipment they may be charged and responsible for its maintenance.
Now is the time for State Attorneys’ General and the Federal Trade Commission to get ahead of a looming crisis. Government should be in the business of avoiding crisis and not merely responding to it. There should be immediate investigations, hearings and action taken to protect consumers from this rising consumer fraud.
We also need to insure that no government incentives are given to contractor/installers and homeowners that legitimize and further the fraud. We need to learn the lessons of Solyndra and Ener1 where the U.S. government wasted hundreds of millions of taxpayer dollars on corrupt and failed energy enterprises.
New consumer protections are needed to prevent energy fraud in light of the ever-increasing household renewable power businesses that have popped up as homeowners are looking to reduce their energy consumption and bills.
Presently there are no adequate consumer protections for fly by night energy companies masquerading as legitimate and regulated utilities.
We are on notice.
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Customers tell horror stories of solar company that gets $422M in tax dollars

One man thought he was going to lower his use of electricity and pay less each month by installing solar panels. However, he is now paying more, is stuck in the contract for 20 plus years, and dislikes the eyesore of the panels on his roof. Others who used SolarCity endures shoddy installation and a raised monthly bill as well.

Customers tell horror stories of solar company that gets $422M in tax dollars


February 26, 2014

We all get them — telemarketing callers pushing home solar-energy systems that will save us from rising electric bills.

Most of us generally hang up. But in 2012, Jeff Leeds, who lives in the Northern California town of Half Moon Bay, listened. His 3,100-square-foot home features 91 incandescent bucket lights, a 180-gallon fish tank, three large refrigerator-freezers and a huge entertainment system. His electric bill was averaging $350 per month.

The sales pitch Leeds was hearing on the phone sounded ideal: Lease a system from SolarCity, the nation’s second-largest solar electrical contractor, for a low monthly fee and reap the rewards of cheap electricity.

“For a $600 fee up front, I would pay $182 a month for the next 20 years,” Leeds said. “They have a performance guarantee. If I don’t make enough electricity, they said, ‘No problem, don’t worry, we will write you a check.’ I thought, ‘I’m covered.’”

Tacked on to that would be what the company called a small bill from the local utility company allowing the customer to use the grid and to cover the use of any electricity Leeds drew from the utility rather than from his SolarCity solar panels.

Now, 15 months later, the local utility company has raised its rates and instead of a lower bill, Leeds is pushing $500 a month with no way out for the next two decades. And he has the eyesore of solar panels that cover most of his roof.

“As a customer, you have no say,” Leeds said. “With a solar lease, you are putting the stuff on your roof. You have a signed contract with the devil and you are stuck with the stuff.”

SolarCity looked into Leeds’ case after receiving a call from and offered this comment: “Mr. Leeds’ system did produce less than we guaranteed last year so he will be compensated for that under his performance guarantee.”

Was Leeds’ case an aberration?

SolarCity has generated a high number of cases of shoddy installation, said Gerald Chapman, building inspector manager for San Mateo County, which includes Half Moon Bay.

“SolarCity seems to be the biggest offender,” Chapman told

By contrast, he said, SolarCity’s small business competitors — he called them “the little guy” — “wants to do it right.”

“We pride ourselves on installation quality, but if we do make a mistake, we make it right,” countered Jonathan Bass, SolarCity’s vice president of communications. “We are rated A-plus by the Better Business Bureau, the highest rating they provide. Our work has been inspected and approved by more U.S. building departments than any other solar provider.”

Who is SolarCity?

The Obama administration’s 2009 stimulus package created an open trough of cash subsidies, leading to an explosion of solar-energy companies. Some of those — Solyndra is the most prominent example — went bust spectacularly. But such high-profile failures and reports of widespread abuse have done little to dampen entrepreneurial enthusiasm.

With rebates, tax breaks and the steady climb of electric rates, more and more Americans have been signing on for solar. But retail solar technology remains expensive — upward of $20,000 per home.

That’s where SolarCity comes in.

Founded in California in 2006 by Elon Musk — PayPal and SpaceX founder and CEO of Tesla Motors, creators of the luxury electric car — SolarCity leverages a unique business model to make solar more affordable. It leases systems to homeowners, typically for a 20-year period.

SolarCity has accepted more than $11 million in federal stimulus funds to make its business run. But the real public support appears elsewhere. Because SolarCity technically owns the energy systems it installs, SolarCity — not the homeowner — earns the federal tax break intended as an incentive to go solar. So far the company has earned $411 million in such tax breaks. The company also may earn additional income on state subsidies.

If that lease is a financial boon to SolarCity, it may prove problematic for SolarCity consumers. No matter how rapidly solar technology evolves, the SolarCity lease ties each homeowner to technology that is cutting edge only at the signing of the 20-year contract.

“Our approach is to install systems to the highest engineering standards,” SolarCity says on its web site. “SolarCity has assembled one of the most experienced clean-energy project design and installation teams in the world.”

The marketing has paid off. SolarCity claims some 90,000 customers in 14 states, and says it signs a new customer every five minutes. The company says its customers include Home Depot, Walmart and the U.S. government.

SolarCity vs. inspectors

Yet consumer-oriented sites like Yelp and the Better Business Bureau , the organization that rates SolarCity an A+, feature criticism from unhappy customers whose complaints follow a similar theme — shoddy installation, poor customer service and hidden fees. Many of the postings have an almost panic-stricken tone as the consumers plead for some sort of resolution to their nightmarish scenario.

More often than not, the negative comments attract the attention of SolarCity officials, who post resolutions to the various problems. Many of the consumers complain that they have spent months trying to remedy faulty installation, only to receive either continuous boilerplate responses from customer service or no response at all.

One California man got a front-row seat at the conflict between SolarCity installers and municipal building inspectors who are sent to sign off on the system before it is allowed to operate.

“The city came out during installation and an inspector gave them the codes and requirements,” said the consumer, who asked not to be identified. “The city guy told them exactly what he wanted and what was necessary, and they still put in the wrong breakers and the wrong wiring. The inspector came back out and looked at it and said, ‘You guys put the wrong breakers on — I told you guys what I needed for the code.’”

The consumer said nearly three weeks went by with no word from SolarCity. He finally called and talked to a manager who said the system had a design problem.

“I said, ‘What do the designs have to do with the breakers? Why not have the right design from the get-go?’” he said.

In all, he claimed, it took four months to finish.

Four months was blazing fast compared to the experience of San Diego lawyer Andrew Athanassious. He first talked to SolarCity in June 2013, eager to get a system installed on his massive home before a large September 2013 utility rate hike. Despite a contract, Athanassious said SolarCity later told him his roof was “not the right material” and he’d have to pay an additional $7,500.

Athanassious is no building contractor, but he said SolarCity’s installers should have known what they were getting into.

“It’s obvious what kind of roof I have. It’s clay tile. It’s not like you could think it’s anything else,” he said.

That was on Aug. 1. Athanssious said SolarCity virtually ignored him for the next two months. He finally agreed to split the cost of the system with SolarCity because they were still the lowest-priced contractor and because finding another solar company would take too much time. SolarCity finally installed the system in October. Unlike Leeds, subsequent electricity costs haven’t been a problem. Athanassious’ utility bill was $410 per month and now it’s zero. He pays SolarCity $357 per month for a lease, saving about $50 a month.

SolarCity responded: “Mr. Athanassious’ system did require a roof upgrade, and we sourced it for him at the lowest cost.”

But Athanssious has problems that remain. During installation, contractors rewired his swimming pool heater incorrectly when they were working on the home’s electric panel. They still haven’t fixed that, he said. And SolarCity has started tacking on $15 per month to Athanassious’ bill because he refuses to pay via direct deposit, a surcharge hidden in the contract.

Other consumers have been hit with the $15 fee as well, and they’ve complained on Yelp and to the Better Business Bureau.

“When I signed up, I was led to believe that they had online bill paying,” Athanassious said. “When I called them, they said they don’t have online payment capability.”

More problems

Stefano Chioetto of Denver has his system installed last February. A building inspector discovered that the installed inverter was incompatible with the utility grid and the system would not operate. For the next 50 days, Chioetto checked with SolarCity on the progress of a replacement part. He said he was given only vague answers like,

“We are doing our best and are committed to fixing your system ASAP,” according to his Better Business Bureau complaint.

“They found out that the inverter they actually needed was very expensive and they had to shop around and had no idea where to find it to fit in their budget,” Chioetto told, saying he discovered this from an outside solar energy expert that he contacted.

Meanwhile, the summer months had arrived and Chioetto was annoyed that he couldn’t use his panels. After he complained to the BBB, the problem was fixed almost immediately — two months after the building inspector’s discovery.

But now he has a new problem. Chioetto lives in a townhome and shares a roof with his neighbor, who has decided to get solar panels of his own. He discovered that SolarCity installed the panels about 18 inches onto the neighbor’s side of the roof even though the dividing wall is clearly visible even from the ground, both men said.

“It’s very obvious that it’s going over a foot and a half,” said the neighbor, who did not want to be named. “You can absolutely see the property line without going on the roof.”

SolarCity admitted that was a problem.

“Mr. Chioetto had a grid parameter that is unusual in a residential site, and we ultimately found a compatible inverter that could support it, and we are redesigning his system to appease his neighbor and still offer him the same performance,” SolarCity said in its emailed statement.

The neighbor decided against using SolarCity because it kept changing terms of the contract by continuing to reduce the amount of electricity that would be produced. Meanwhile, he says, SolarCity hasn’t fixed the encroachment.

“They said they are researching modules that are smaller, and it’s back-ordered until May,” the neighbor said. “I don’t know if I believe that.”

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Solar Panels Can’t Take the Heat

Solar companies are going bankrupt because the solar panel problems won’t stop. In four years, 55 companies closed in the Sacramento area. Constant recalls, unpromised savings, and fear of fire turns buyers away from installation.

Solar Panels Can’t Take the Heat


POSTED 10:48 PM, NOVEMBER 4, 2013

Solar panels are supposed to create energy and save money.

“We were excited about it because so much had been written about solar and how it would reduce our electrical bill,” said Edward Snyder a concerned homeowner.

Roseville was in the process of becoming the largest solar community in the nation, so several hundred families moved into what they thought would be their dream home.

“We basically purchased it because it had solar panels on it,” said Jennifer Everett, a concerned homeowner.

Many of the families soon found out their dream home was, really, a nightmare.

“The first thing that happened was the savings weren’t there,” Snyder said.

Snyder became angry that the $17,000 system he paid for only saved him about $500 a year. After more than a year of fighting, he gave up – until he had a fire.

“The solar system caught fire. The shingles caught fire. It was pretty scary … There was a lot of smoke coming off of that roof,” said Snyder.

The insurance report and investigation revealed that the fire started in the center of one of Snyder’s solar panels. The panel got too hot, fried the wiring and caused the roof to ignite.

“I am totally pissed off, not only at the builder, but the government,” said Snyder.

Problem Spreads

During Snyder’s solar nightmare, many of his neighbors were also fighting similar battles.

Jennifer Everett and hundreds of others were told three years ago to turn her solar system off because there was a fire risk.

“I have two daughters that are in second grade and I don’t like being in a home where it can catch fire at any point,” said Everett.

Back in June of 2011, Suntech America had a recall of a system similar to what was on Everett’s roof – solar panels that looked like roof shingles. Suntech and the Consumer Product Safety Commission worked to find a solution while homeowners waited in fear.

“I don’t really want to be in a home where I [can’t] go to sleep at night,” said Everett.

Nearly a year later, in May 2012, Everett’s builder Centex sent out a letter stating they had a fix for the panel problem and that repairs would begin immediately.

In July of this year – more than two years after the Suntech recall but before the repair had been completed on all the homes – Everett got another letter from her developer Centex: The fix wasn’t stopping the fires.

Two homes had already caught fire. The letter noted in bold print that they were suspending all repairs and that homeowners should shut down their systems immediately.

Then the neighbor’s house caught fire.

The End of the Road

At their wits end, the Everetts, Snyders and 48 other families contacted an attorney. A class action lawsuit is now currently in the works on behalf of these Roseville communities.

“They bought that specific house because of the solar panels, they wanted the energy savings, they wanted the long term efficiency – and they got something totally opposite. They got a system they can’t use and they’re scared to turn it on because their house may catch fire,” said attorney Matt Schoech.

After Schoech was contacted to fight this battle, he says a letter was sent out telling homeowners that Centrex was going to rip out their system and put in a new, raised panel system.

“I was advised by my attorney not to sign that agreement simply because, if we did that, we are going to release all liability to the builder. If they put those panels on our roof at this point I don’t really trust them,” Everett said.

Some of Schoeh’s clients no longer want any form of solar panels on their roofs – they want their investment back and to move on. Others are excited to have the raised panels installed for free. We tried to contact Centex to ask them about the solar problems they wouldn’t grant us an interview but gave us this statement:

“Throughout this complicated process our top priority has always been to get homeowners solar systems operational as soon as possible. Our goal is to complete the replacement of affected systems by February of 2014.”

Roseville Electric still strongly supports solar; more than 1,300 homes in the community has them. But, the OE-34 panels – the ones causing problems – are no longer allowed to be installed on roofs in Roseville, or California.

“I would tell people to contact the manufacturer, learn how to maintain them and take care of them. There is always risk with anything but we believe it’s relatively safe,” said Vionette McCauley with Roseville Electric.

The biggest problem with solar panels is that many companies are going bankrupt. One report said 55 have closed since 2009, including some of the companies Centex subcontracted to install their solar systems.

It’s important when hiring a solar company to install your system to make sure you verify their insurance. If the company folds, that insurance company will be there to make sure you’re made whole again.

The OE-34 solar panels are no longer aloud to be installed in Roseville or California. Other panels are deemed safe and have been tested in California’s heat to make sure they are safer. It’s important, for whatever you put on your roof, you do your research first.

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