The Feds Are Coming for Solar Scammers

Federal regulators are joining forces on a fresh effort to go after solar energy scams and help the public parse potentially deceptive business practices in the industry.

Treasury Department officials said Wednesday they will soon release a consumer advisory warning against deceptive sales practices, officials said at a public event featuring leaders at Treasury as well as the Federal Trade Commission and Consumer Financial Protection Bureau. These agencies are also releasing a slew of documents to help American consumers gauge whether solar marketers are legitimate and encourage people to report any potential fraudulent behavior in the sector to come forward to the government for potential inquiry.

Solar energy fraud at the residential consumer level is a rare but profoundly painful phenomenon that can acutely harm low- and middle-income households. At the public event announcing the move, officials said they took this step after seeing a rising amount of consumer losses due to frauds and predatory behavior in the household solar space. More than a quarter of a billion dollars in solar-related fraud has been reported between January 2022 and June of this year, FTC Chair Lina Khan said. The Internal Revenue Service issued a warning in July against new efforts by fraudsters to cite the Inflation Reduction Act in predatory pitches.

As Treasury Deputy Secretary Wally Adeyemo said at the event, any time a major law passes and unleashes federal dollars to support consumers, you will “have people trying to take advantage” – but “like in most industries, these bad actors represent a small number of solar companies.”

CFPB Director Rohit Chopra, meanwhile, sounded a note of concern. “I’m really worried about this,” he said, pointing to the 2007-2008 subprime mortgage crisis and saying these behaviors pose the risk of “undermin[ing] the growth and development of residential solar programs in our country.”

Chopra pointed to a specific business practice regulators that can be concerning: sales quotas and commissions. “Sometimes when those are set in unreasonable ways, it can create the conditions where people who are on the frontlines selling these products go too far.”