Hood: Before you invest in solar, check it out first

Before investing in solar power, closely check claimsOriginally published on clarionledger.com, 10/30/2015.

PDF: Before investing in solar power, closely check claims

You’d think that, with the abundant sunshine we get here in Mississippi, we’d be a natural for solar power. Although solar energy is much more prevalent in the Western and Southwestern U.S. – where they get a lot more sunlight unimpeded by clouds and haze — we’re starting to see more and more solar panels in the Magnolia state.

Recently, Entergy Mississippi announced a project to create three solar “farms” in the state, and a lot of businesses are forming around getting solar panels on rooftops. In the future, it’s likely that rooftop solar installations will be as common a rooftop site as satellite TV dishes. In some cases, they’ll actually be generating more power than the homeowner needs, which can then be sold back to the utility companies.

Although there are a couple of different solar-panel technologies, the fast-growing Photovoltaic (PV) industry appears to be dominating the market. Simply put, PV converts sunshine to electricity as sunlight falls on solar cells; energy which can be used to power your home or business.

But a troubling warning came recently from Mississippi Attorney General Jim Hood, who advises Mississippians to beware of businesses who offer solar energy systems to consumers. It seems that, where there is sunlight, there is also the potential for fraud. Hood warned consumers last week that we need to be careful if approached by people trying to sell or lease costly PV systems.

“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,” Hood’s office noted in a news release. “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.”

That could leave you on the hook for the price of the unit, which could in turn affect the value of your home if you tried to sell it.

“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,” Hood said. “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. These companies’ deceptive practices often result in a higher energy price tag for consumers after installing the system than they had before.”

Hood had some advice for companies looking to sell solar systems as well: become familiar with the Solar Energy Industries Association’s Solar Business Code.  This code lays out best practices and ethical standards for solar companies.

If you’re considering solar, Hood advises the following:

  • 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.
  • Net-metering promises: 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.
  • Leasing issues: 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.

Finally, check with your local government before entering into a contract. Local ordinances, codes and neighborhood association rules may restrict or prohibit your ability to install the system in the first place.

For more information, the Solar Energy Industry Association has resources available at http://bit.ly/1BejJSy or http://bit.ly/1GRghdM. If you believe you’ve been defrauded, contact the Consumer Protection Division of the Attorney General’s Office at 1-800-281-4418, or file a complaint at http://www.agjimhood.com.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s