As the costs of solar panels have come down and government incentives for them have grown, more and more Americans are turning to solar to cut costs.
Seven percent of U.S. homes had solar energy systems as of May last year, and this number is expected to grow to 15% by 2030, according to the Solar Energy Industries Association (SEIA).
The average U.S. homeowner will save about $50,000 on electricity over the lifetime of their solar panel system, according to online marketplace EnergySage.
That’s what Pennsylvania’s Larry Minnitti tried to do by having a solar panels installed on top of his Beaver Falls home. But what he thought would be a way to save money wound up becoming a financial ordeal.
“I’m left hanging, but I don’t want this to happen to somebody else,” Minnitti told CBS News Pittsburgh last month.
Minnitti said he bought a solar energy system he thought he could afford to pay off over time. But he was in for a terrible surprise.
“They presented everything on a tablet,” Minnitti told CBS News Pittsburgh about his interaction with the salespeople. “And once you signed it, all they did was flip to the next page … you never had time to, like, physically read the entire agreement.”
Minnitti thought he had agreed to 20 years of affordable payments with Palmetto Solar. But he later learned he’d actually agreed to a balloon payment with the company’s lender at the time, Sunlight Financial. A balloon payment is a one-time large payment due at the end of a loan term.
“They put this clause in the contract about the voluntary payment,” Minnitti said. “And if you don’t make that voluntary $18,000 payment, my solar panel payment doubles from like $370 to almost $570.”
CBS News Pittsburgh contacted Palmetto Solar to dig in further and learned that the salespeople who dealt with Minnitti worked for a third-party sales partner called Lifestyle Marketing.
Palmetto Solar issued Minnitti an apology, calling what he went through a “subpar experience.” The company also acknowledged that “a deal structure error was made that should never have been presented.”
Thankfully, it worked directly with Minnitti to resolve the issue and committed to paying off his entire loan. The company claims it has also changed its financial lending process.
But there are still many solar panel installers out there engaging in deceptive practices that could leave more people victimized.
Read more: 82% of Americans are missing out on a savings account that pays over 10 times the national average
In 2020, Pennsylvania’s Bureau of Consumer Protection received 87 complaints about solar companies, reported KDKA. Last year, it received 227 complaints — a 160% increase.
And this is a national issue that regulators have sounded the alarm on.
In August, the Consumer Financial Protection Bureau (CFPB) said that some residential solar lenders are “misleading homeowners about the terms and costs of their loans, misrepresenting the energy savings they will deliver, and cramming markup fees into borrowers’ loan balances.”
It found that the rapid rise of nonbank lenders partnered with solar salespeople is raising the potential for illegal behavior and consumer harm.
If a salesperson knocks on your door trying to sell you a solar panel system, there are a few key red flags to watch out for.
First, be on the lookout for hidden markup fees. The CFPB warned that a solar company may agree to give a lender a kickback, which often increase the loan principal by as much as 30% above the cash price.
Also, consumers are often presented with a loan amount that factors in a potential tax credit. But not everyone qualifies for it, and depending on your income it could take years for you to get that money.
The CFPB also warns about ballooning monthly payments. If your agreement contains a balloon payment, your monthly payments could increase after a period of time unless you make a payment that matches the amount of your projected tax credit, whether you ultimately get that credit or not.
Finally, solar panel systems can save consumers money. But sometimes, the amount of savings isn’t as substantial as companies say it is, especially when you account for the cost of maintaining your solar panel system. “Homeowners report being told that solar panels will cover financing costs as well as eliminate future energy bills,” according to the CFPB, which may not always be true.
The U.S. Treasury Department also warns that if you’re going to finance a solar panel system, the financing arrangement could include a lien that’s filed against that system. That could become an issue if you decide to sell your home. Your lender might require you to repay your loan before selling, or it might require your new buyer to take on your loan as part of the home purchase.
If you’re interested in having a solar panel system installed, check the company’s rating with the Better Business Bureau before moving forward, and be wary of companies that try to pressure you to sign a contract right away.
You should also know that you have the right to finance a solar panel system with the lender of your choice. You don’t have to use the lender the company selling the product recommends, and it’s often best to secure your own financing.
But no matter who you sign with, before putting your name on a contract, read the fine print carefully.
If you’re past that point and want to get out of a bad deal, you should act fast before the payment balloons, said Diane Thompson of the CFPB to CBS.
“Probably the easiest way is to go to a local financial institution … and see if they can get a home equity loan or line of credit and refinance the whole thing,” she said.
If you feel like you’ve been misled or cheated, you can also file a complaint with the Federal Trade Commission. Some states have their own consumer protection offices, and you can also seek help from nonprofit legal services.
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
![Getting Smart on Energy - January 2025 - [The Intelligent Utility Network Community Manager Digest]](https://energynews.today/wp-content/uploads/2025/01/picture-287408-1728945935-90x60.webp)
