How to avoid dodgy solar power retailers

May 15, 2019 | Getting started with solar

“Panels go up there [points to roof] and my bill goes down…” Most people have a limited understanding of how solar power works and what’s involved – and rightly so. But this is the exact opportunity that dodgy solar retailers abuse to offload sub-standard panels and inverters, leaving customers high and dry when things inevitably go wrong.

In Australia, over 2 million households have made the switch to give up their bill and install solar power. However, according to a recent report by the Consumer Action Law Centre, 650,000 of those systems were bought from one of the 700 companies that have gone out of business since 2011. This has left these homes with nobody to contact when their systems fail and it’s time to claim warranties.

For a very public example, look no further than the Solar Victoria website that lists the below… on their front page no less.

Solar Victoria warning about True Value Solar, Energy Matters/Flextronics leaving the Australian market

As seen in this example, this issue isn’t limited to just small “backyard operations”, with large and well-known brands not being able to maintain their business models. What is most common to these businesses closing their doors is a real focus on “cheapest deals” often advertising up to 50% cheaper than the market average to suck in an under-prepared market.

The report didn’t stop there, outlining what it calls “concerning trends” in the solar power industry. Below we’ll outline the top concerning trends mentioned in the report and what you can do to protect yourself.

High pressure, predatory sales techniques

A large group of sellers prey on the fact that there’s a lack of information about solar power. They will bend the truth, make false promises or just tell flat out lies, just to close a sale.

These lies can range from giving deliberately inflated return predictions, to giving you a completely different solar power system than you thought you were getting.

Without doing some due diligence, it can be difficult to filter out the misinformation, or often times, it can already be too late.

It doesn’t stop there, unfortunately.

Research has shown that people are more vulnerable to predatory sales techniques, like the ones mentioned above, when they are in their own home. Door-to-door and telephone sellers know this and use that to their advantage – often isolating customers from online comparison tools and market advice.

‘Showing up unannounced to tell you what they think you want to hear’ to make a rushed decision. From inflated warranties to seemingly amazing (but not really) bargain pricing. Anything to close the deal.

Such is the unfortunate world of fly-by-night and unprofessional sales companies.

What can you do to protect yourself

It’s a cliché, but it still holds true; if it looks too good to be true, it probably is.

That also means that you need to establish a baseline of what good is. Don’t go for the first quote you get, but compare. If one is significantly cheaper than the others, ask yourself why that is.

Also refuse unsolicited selling. Especially when they visit your home unannounced. The likeliness of them being able to make you an offer that better values than what others are offering is highly unlikely – and when they do it’s usually with unsustainable terms leading to business disappearing leaving unsuspecting families exposed.

Give yourself the opportunity to find a solar power retailer that you feel comfortable with and to do a bit of research before you have the conversation with them. A little bit of effort now will give you a result you can be happy with for years to come.

Businesses disappearing and taking your warranty with them

For many solar retailers, the last 8 or so years has been a race to the bottom. With little else to offer but dirt-cheap pricing, prolonged survival relied more and more of ways to cut corners. Most commonly: severely substandard or liquidated stock, to outsourcing operations and finding leads.

In this mad race, companies discovered that one good way of reducing cost is to disguise warranties. Using ambiguous language, many dodgy retailers will cite warranties that you need to action directly with the manufacturer… 9/10 times based somewhere in China. Another common tactic employed is instead of having the warranty handled by the manufacturer, the company will claim to take ownership of the warranty themselves. Easy enough right? If you have a problem with your solar power system, you simply call the company that sold it to you and they will take care of it for you.

But what happens when the ‘bargain basement price’ company goes out of business, just like the 700 companies did in the last 8 years before them? In that case, there no longer is a company to make a claim with and you no longer have a warranty. Whether your system is 10 years or 10 days old. This exact scenario is how 650,000 Australian homes ‘bargain’ solar installations are currently without warranty that they can call upon as their cheap systems are failing.

Just because a company goes out of business and no longer honours your warranty, doesn’t mean the company is gone. There are plenty of companies that get acquired for a lot of money, and/or simply start over under another name. This way, for the people not doing their research, they can continue to operate exactly the same way, without having to answer for an internet full of negative reviews. Literally to do the same thing. For example, just try Googling the internet service, Choice Reviews, for “Euro Solar” or “Arise Solar” – the results are coincidentally pretty similar.

What can you do to protect yourself

To shortcut the process and to navigate the land mines, you can start by reading this article “The real cost of cheap“, or simply start by asking your retailer how they handle warranty claims. Make sure you verify that what they say is also reflected in your contract.

Hidden costs

From costly check-ups every two years in order to keep your warranty (sometimes up to $950 every two years!) to deliberately leaving out parts of the installation so they can charge you for them later, some solar power companies are very creative in taking their customers for a ride.

Did you know there’s a bunch of paperwork required to connect a solar power system to the grid? That it’s not just a matter of plugging it in? We don’t blame you, almost nobody does. That’s because reputable solar power companies take care of this for you.

Other, less reputable solar power companies; however, see this as an opportunity to get more money from you after you already paid for an expensive solar power system.

The same goes for check-ups every couple of years to keep your warranty. Yes, while it is true that solar power systems require service every now and again, it shouldn’t be tied to your warranty.

What can you do to protect yourself

Ask your solar power retailer, and make sure to check your contracts. If there’s an asterisk anywhere that isn’t explained, ask your retailer and make sure they put their answer in writing.

Inappropriate financing

There are strict lending laws in Australia, but these currently don’t apply to loans for solar power systems. Some solar power retailers take advantage of this gap in the law by pushing high loans onto people that aren’t able to afford them. Resulting in difficult financial circumstances.

What can you do to protect yourself

Do not sign anything until you talk to your bank, an accountant or a financial advisor. These people are finance professionals that will be able to help you make a good decision.

If a seller is trying to keep you from talking to someone like this, or they’re pushing you to make a decision before you do, walk away.

The Consumer Action Law Centre report urges the government to take action and we wholeheartedly agree. Solar power can be a great investment for many households, but only if done well. Better regulation will make sure that happens and will weed out the bad actors.

The Victorian government announced in March that they will require all solar power retailers to sign up to the Clean Energy Council’s Solar Retailer Code of Conduct if they want to continue to participate in the Solar Homes program. It’s a step in the right direction, but we still have a long way to go.

The MySolarDirect difference

All the retailers MySolarDirect works with are pre-qualified to be honest and fair. They don’t have hidden costs or warranty loopholes in their contracts. Combined, they have installed thousands of solar power systems all over Victoria.

If you’re interested in quotes from these retailers, go to www.mysolardirect.com.au and fill in the form.

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