Even if our politicians hate to admit it, green energy is growing in popularity across Texas. The Lone Star State now generates the third-most residential solar power in the country. But a study recently released by the Fair Financial Services Project at Texas Appleseed reveals that a growing statewide interest in residential solar panels could be generating a wave of scams and fraud that disproportionately targets the elderly and non-English speakers.
The Office of the Attorney General reported an 818% increase in solar panel-related complaints between 2018 and 2023, and Dallas County is a leading region for claims of fraud. According to data provided to the Observer, since 2018 the attorney general’s office has received 172 complaints of solar-panel fraud that cite a Dallas County address, putting our area at the top of the leaderboard alongside Tarrant, El Paso, Harris and Bexar counties.
Each complaint is accompanied by a written testimony, and many conclude with the same overwhelming sentiment.
“I feel scammed and helpless, and I need help,” wrote a Mr. Knight, a resident of Sunnyvale, just north of Mesquite, in 2022.
In a complaint submitted to the attorney general's office, Knight claims he was misled by a door-to-door salesperson who told him the solar panels would replace his electric bill payments. Instead, Knight ended up paying elevated prices for both. Other claims warn of individuals who say their signature was forged on contracts, and promises by solar panel companies of federal tax credits to pay for the panels that never materialized.
According to Ann Baddour, author of the study and Director of the Fair Financial Services Project, a “perfect storm” of situations has resulted in Texas households being increasingly vulnerable to shady solar panel sales pitches. After utility bills spiked across the state following Winter Storm Uri in 2021, solar panel companies began highlighting the potential for reduced utility costs as a reason for installation.
Solar panel-related tax credits made possible by the Inflation Reduction Act have also been highly publicized, which Baddour believes could contribute to “false assertions” to consumers that they might qualify for the credit. And, as Texas experiences a growing number of severe weather events, more homes are being plunged into darkness for longer periods of time, which could contribute to homeowners’ desire to be energy-independent.
“People living on fixed incomes in particular became financially stressed [after Winter Storm Uri]. When door-to-door salespeople came around telling them these enticing stories of government programs and free solar panels that will make them energy-independent, it’s pretty promising to people,” Baddour said. “And sadly, it turns out to be false in many, many situations.”
Dallas-based attorney Chris Arnell took on a handful of solar panel fraud cases in 2022 as a pro bono effort, and after successfully litigating one of the cases, he suddenly found himself "inundated" with calls from Texans with similar stories. Arnell, who is now on the phone "almost every day" with a client or a potential client in a solar scam case, believes the industry is plagued by an "epidemic of fraud."
"The overwhelming majority of my cases is people who signed up for what they were told was a no-brainer," Arnell said "The way they pitch these solar panel deals, at least to my clients and what I'm seeing, it's too good to be true."
Forty-five percent of claims filed by Texans reference false or misleading statements as the reason for their claim, and 37% of claims refer to “unsatisfactory service.” One in 10 Texans claim the solar panel company that approached them failed to deliver any goods or services at all.
Texas isn’t the only state to fall victim to solar panel-related scams in recent years. In 2018, the Federal Trade Commission received 680 complaints from consumers. Last year, it received 5,331.
Some states have taken action against the growing number of solar scams. In Connecticut earlier this year, Attorney Gen. William Tong filed a lawsuit against several solar energy companies that used deceptive or fraudulent sales practices. Florida Attorney Gen. Ashley Moody issued a similar warning this summer after her office received 700% more complaints from residents.
“We are seeing consumers reporting costs exceeding $100,000. If consumers are not careful, they may lose that much and an upfront payment or loan obligations for work that never gets completed, or a defunct system,” said Moody.
Baddour believes part of the solar scam problem is a systemic one: the industry is inherently commission-focused, leading "unethical" salespeople to offer too-good-to-be-true selling points — like a low interest rate — while hiding exorbitant fees or charges. Holding companies accountable that rely on shady business practices is tricky, she adds. Many lending contracts include arbitration clauses that help shield companies from a court process that could provide relief to the homeowners who were scammed.
"[Arbitration] is what is keeping these cases out of the courtroom and out of the public eye," Arnell said. "I want to say 90, 95% of my cases will end up in arbitration."
Arbitration can even become an issue in the most egregiously fraudulent cases Arnell has worked on. A few weeks ago, he represented an elderly woman who agreed to a credit check after being approached by a salesperson. Instead, he created a fraudulent email address in her name and forged her signature on a sales contract and loan agreement. Arnell argued that his client shouldn't be held to a clause in a contract she's never seen, but the protest was unsuccessful.
Theoretically, Baddour says state and federal laws should protect consumers against deceptive business ploys. That said, many homeowners do not have the means to pursue legal action, even without an arbitration hurdle. To even the playing field, she believes state lawmakers need to take a closer look at the solar energy market and add protections and accountability measures that better protect consumers from bad actors in the market.
“Sometimes family members don't even quite know what happened until their loved ones pass away and they realize that there's this lien for solar panels on their house,” Baddour said. “It becomes very difficult for individuals and families to navigate the problematic practices and situations.”
