Illegal solar leasing scam-don't be a victim (insurance, loans)

[Juram]

This scam is finding a foothold in other states but
predominantly has been centered in Arizona, be warned.



"Hey folks, pay X amount of money for this prepaid lease, pay 50-100% upfront and then
after 20 years WE GUARANTEE you can buy it for $1-100 dollars."



No. No. Just no. This scheme is popping up in all sorts of places and it is completely against the letter of the law. What these installers are doing is combining the benefits of an operational lease along with a capital lease, basically double-dipping.

They're taking the depreciation AND promising the customer a specific buyout price which is a big legal no-no. What's going to happen is that these people who think they're getting the system for $1, or $100, are going to get a big surprise when the IRS finally intervenes and they are required to purchase the system at Fair Market Value.

The profile of the companies offering this scam is always the same.

-Local installer.

-Using funds generated from loans or small private investors instead of a credible financial institution.

-Due to a major cash crunch, they delay installation of the system for as much as 8 or 9 months, blaming the utility, the manufacturers, the city, the county, whomever, whatever they think will stick.

-Eventually most of these installers are going to collapse, if you're going to do a prepaid lease with one of these companies, insist on not paying a single penny down until the system is installed, a respectable company will honor your wishes, just know that none of these companies offering this bogus deal are respectable.

-When these installers do collapse, who's going to honor the warranty and insurance you've been promised for 20 years? Oh yeah, that's right, nobody. You've already paid everything up-front to a small-time outfit.


if all this was legit, why can't "real money" companies such as SolarCity, Sungevity, SunCap Financial and others not all do the same thing? I wanted to say something because this BS scam is going to wind up as a huge Ponzi Scheme and give the entire industry a black eye.

If you're signing one of these contracts, just know that the installer is going to have to sell about 3 or 4 more jobs just to have the cash liquidity to get yours installed if their
lease program is in-house.


Bottomline, if you're getting a prepaid lease and you're paying 50-100% of the money down, you're being extremely foolish and don't be surprised when you see that smalltime installer go belly up and your investment gets set to flame.



/rant over. Just irritated by some of the bogus solar scams I'm
seeing nowadays.


If you're going to do a prepaid lease, ALWAYS ask who is providing the financial backing for this operation. If the response is mumbled or vague in the slightest, cut bait and walk away. Never pay a penny more than 15% of the total cost. If you give them 50-100% of the money right off the bat, without them having done
a thing for you, what do they really need you for, what's to stop them from walking off with your money and calling it a day.

The same goes for purchase. Never pay more than 10-15% initially, if the installer
balks, then they're a fraud or on shaky financial footing and you need to look elsewhere.