Attorney General Jim Hood Advises Consumers to Know the Facts Before Investing in Solar Energy Systems

October 20, 2015

Attorney General Jim Hood is offering Mississippi residents factors to consider in purchasing residential solar energy systems, including cautioning consumers to be alert for potential consumer fraud schemes.

In an effort to use alternative energy sources for cost-savings and environmental reasons, many consumers are reducing their energy usage and using more renewable energy by installing solar generating units on their homes and property. Photovoltaic systems (“PV system” or “solar system”) supply energy through nature; therefore, the energy is free and abundant.

Like many other industries, the growing popularity of solar has caused some unethical businesses to enter into the market. To lure customers into a lease, some of these unscrupulous solar companies often claim that consumers can potentially reduce costly electric bills by utilizing various federal, state and local tax credits and rebates.  This can be deceptive, however, since the solar company is usually the entity which receives the tax benefits and incentives. In addition, for cash purchases, the price of PV systems can range anywhere from $10,000 to $60,000 or more.

“Before consumers make a significant investment in a solar system, they should research their options to make sure they are in fact getting cost savings and meeting their goals of environmental sustainability.  While there are some exemplary companies, other solar companies are using misleading sale pitches to entice consumers into paying for overpriced PV system agreements or failing to disclose how various subsidies, government programs and rate making practices may affect the future cost of energy for the consumer,” said Attorney General Hood. “These companies’ deceptive practices often result in a higher energy price tag for consumers after installing the system than they had before.”

Attorney General Hood encourages all solar companies operating within Mississippi to review the Solar Energy Industries Association’s Solar Business Code.  This code lays out best practices and ethical standards for solar companies.  The Code can be found at:  www.seia.org/policy/consumer-protection/seia-solar-business-code.

There are many factors to consider before making a decision to go solar. Attorney General Hood offers some basic tips to help keep you from becoming a victim of consumer fraud if you plan to purchase a PV system:

  • As with every product or service, comparison shop with several solar companies to make sure you are getting the best deal. Obtaining a written estimate from at least two companies will allow you to compare the cost and installation of the same size system between two companies. Be sure to request that major components are itemized.
  • Inquire about tax credits. Consult with a tax expert to verify your tax credit eligibility and calculate the correct figures before you enter into a purchase agreement with the solar company.  Beware of guarantees that 50% or more of the cost of the solar system is covered by tax credits.  In order to receive tax credits, you must have taxable income.  Often, retirees or young families do not have enough taxable income to fully realize the tax benefits.
  • Be more skeptical of installers that promise no out-of-pocket costs prior to even reviewing your specific situation.
  • Beware of promises that your utility company will be issuing you a check every month for the electricity that you provide to the local utility grid. Ask what will happen if the solar company promises a certain percentage of savings from your utility bill and the amount of savings is not achieved.
  • Be aware of the terms of solar panel leasing.  Solar panel leasing is advertised as a way to obtain a solar system without having to put any money down; yet, the consumer should be aware that he or she is still responsible for the lease costs.
  • Consider reviewing the Solar Energy Industry Association’s Consumer Guide to going solar: http://www.seia.org/research-resources/residential-consumer-guide-solar-power.  You may also wish to visit the solar industry’s consumer protection resource center: https://www.seia.org/policy/consumer-protection

If you believe you have been a victim of consumer fraud in the sale or lease of a solar system, contact the Consumer Protection Division of the Attorney General’s Office at  1-800-281-4418. Click here to file a consumer complaint form.

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