Some Powerhome Solar customers feel scammed: how to avoid falling victim to solar scams & what to do if it happens to you

Updated

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Image source: Powerhome Solar

On April 13, 2022, investigative reporter Rob Wolchek from Fox 2 News (WJBK) in Detroit, Michigan ran an 11-minute segment about Powerhome Solar. The story covered complaints from several Powerhome customers that allege the company hasn’t delivered what it promised and that its sales tactics were deceptive. 

The report also contained footage of Powerhome salespeople appearing to make untrue (or at least incomplete) statements about solar tax credits to Fox 2’s undercover homeowners. The footage also showed Powerhome’s salespeople in the homes of those same undercover customers, refusing to show them their contracts before asking them to sign

Unfortunately, Michigan isn’t the only place where Powerhome customers have complained about their solar installations, and Powerhome isn’t the only solar company people have complaints about. 

Below, we’ll cover some of the common problems experienced by Powerhome customers and how people who are considering solar panels can avoid - or reduce their risk of - experiencing the same issues.

Complaints against Powerhome Solar are widespread 

Powerhome Solar customers in many states have expressed similar opinions about the company. In addition to the Michigan report, WTTV in Indianapolis and WECT in Wilmington, North Carolina interviewed people who say they’ve experienced problems. Another report provides details about an investigation into the company by the Missouri Attorney General’s office.

The complaints covered in the investigative segments are echoed in the customer reviews of Powerhome hosted on SolarReviews. As of this writing (April 23, 2022), Powerhome Solar holds a review score of 2.30 out of 5 stars from 397 reviews. In over 200 critical or negative reviews, Powerhome’s customers describe issues with system operation and production, long waiting times for system activation, and difficulty getting good results from Powerhome customer service.

Details about Powerhome’s customer complaints 

Several themes are present in the complaints covered by various new outlets and in reviews on our website. Here’s a quick rundown of what we’ve seen, but by no means an exhaustive list:

  • Issues with low solar production seem to be the most widespread complaint. In many cases, Powerhome’s customers state that their solar panels are not making as much energy as Powerhome estimated they would during the sales process, and/or the customers’ energy bills have not gone down by as much as they were told they might.
  • Similarly, claims that their systems aren’t working properly is a major theme that runs through many customer complaints about Powerhome. Some customers describe spending months at a time with their systems making very little or no solar energy.
  • Being misled about the federal solar tax credit is another recurring theme. Specifically, these customers say they were told they’d receive a check from the government (like the undercover homeowners in the Michigan investigative report) and were not provided with the context that they could only get back in any given year what they otherwise would have paid in taxes.
  • Long wait times before final interconnection come up in many customer stories. These customers usually mention extraordinarily long waits for permitting, or miscommunications between Powerhome and local inspectors. Several customers report making those contacts themselves to try and speed up the process.
  • Many of the customers with long permitting and inspection delays also say they have begun paying for the solar panels before they’re turned on, although in some cases customers report being compensated by Powerhome when this happens.
  • Some customers complain about water damage in their homes or other property damage that arises from the installation process.
  • The customers describe bad customer service when they bring these issues to the company, as well as rudeness, unresponsiveness, and being passed between multiple company representatives without a single point of contact.

How Powerhome has responded to these complaints 

In each of the news stories, reporters reached out to Powerhome for comments on the customer complaints. 

Two of the reporters received messages from Powerhome's PR firm that read, “Powerhome Solar is committed to customer satisfaction and is always looking for ways to better serve our customers and their needs. We strongly encourage Powerhome customers to contact us at customersolutions@powerhome.com with any questions or for help getting the most out of their solar system.”

On our platform, Powerhome has responded to many of the negative reviews, apologizing for customer service failures and inviting customers to contact them for further assistance. It’s unclear whether these customers have had their issues resolved or not, but it’s encouraging to see an attempt. We reached out to Powerhome regarding the recent reports and negative customer reviews, and received a copy of this letter from Powerhome CEO Jayson Waller in response:

Dear POWERHOME SOLAR Community,

Over the past few years, POWERHOME SOLAR has grown significantly and, as with any fast-growing company, we have experienced some bumps along the way. But we are committed to doing better and delivering on our commitments to each and every one of our customers. We have been working nonstop to investigate, understand, and address any issues that have been brought to our attention, and have developed and are now implementing many new trainings and policies, specifically around sales and customer service, to ensure we are moving forward each day with a renewed commitment to our customers. Here’s how we are taking action.

  • All our sales team members have recently reaffirmed their ethical pledges and will be required to reaffirm them annually. All sales team members will also be required to retrain on sales and ethics policies every 60 days.
  • We have engaged an Am Law 100 firm to perform an independent investigation into allegations of sales associates not following our sales guidelines or ethics policy.
  • We are assembling an internal ethics committee to regularly audit our sales practices to ensure all our ethical standards are upheld.
  • We will soon be instituting a minimum 7-day (longer if required by applicable jurisdiction) penalty-free cancellation period in order for customers to have additional time to review their contract and decision to purchase.
  • We have been and will continue to revamp and improve our sales processes, and we are placing a renewed focus on ethics, honesty, and quality control. This includes: a third party review of all sales training materials and requirements, including the incorporation of advanced ethics courses; recording and regularly auditing the sales team’s interactions with customers and a secret shopper program to ensure our guidelines and trainings are being followed; incorporating state of the art technology into our sales process for quality control; and a new team that is responsible for following up on all recent sales to confirm customers understand what they have agreed to.
  • We are expanding our customer service team to better and more quickly respond to customer inquiries and have hired a leader with nearly 30 years of experience in sales and customer service to run this team.
  • We will launch a digital customer portal to give customers real-time insight into project status and timelines and provide a post-install communication and support tool.
  • We have extended our workmanship warranty for all existing and future residential customers to 10 years.

 

We are committed to improving for our customers and helping them invest in cleaner, greener sources of energy. Thank you for standing by us. We’re here to help. Please reach out to our customer service team at any time: customersolutions@powerhome.com.

Thank you,

Jayson

One more thing to mention that may or may not be related to ongoing issues with customer complaints and negative media attention: on April 12th, 2022 (the day before the Michigan TV station aired its story), Powerhome Solar announced it would rebrand as Pink Energy. That transition was scheduled to take place on April 22, 2022, although at the time of this writing both the Powerhome and Pink Energy websites were separate and active on the web.

Also on April 22, 2022, Pink Energy announced the hiring of Vincent Feranda as Senior Director of Customer Experience. In its press release, Pink Energy called Feranda’s hire “part of a larger strategy to better serve current and future customers.”

What Powerhome customers who feel wronged are doing

On top of writing negative reviews and speaking with the media, dissatisfied Powerhome customers are gathering online. 

The reporter in North Carolina interviewed Jordan Kleinsmith, who runs phslawsuit.com, a website with a primary goal of “help(ing) victims (of Powerhome Solar) pursue their own individual legal action and provide ongoing updates on how to best do so in their local area.” Kleinsmith also lists at least three separate Facebook groups in which people share their bad experiences with the company.

The customers in these groups face an uphill battle, they say, because the contracts they signed with Powerhome contained clauses that required arbitration rather than allowing for traditional remedies like lawsuits in state and federal courts. This is where participation in groups like those described above come into play. 

In a post entitled, “The Evolution of This Site’s Mission”, Kleinsmith writes that his initial intention was to gather enough people who felt wronged by Powerhome and start a class action lawsuit. But “(a)fter doing extensive research” it didn't seem like the best path forward, and that “several lawyers have been quite confident that (the arbitration clauses) can be defeated relatively easily” in bringing state lawsuits. 

He goes on to say he’ll “still pursue multi-party class action lawsuits, and potentially even a Federal class action lawsuit”, but that he prefers to drive media coverage and support individual cases against Powerhome. The website offers a resources page to help those who feel they’ve been ignored in their pleas for help. 

We reached out to Mr. Kleinsmith to ask some questions about his experience with Powerhome Solar. In his comments, he described being sold a package of energy-saving upgrades that included a home solar system, as well as being promised a 70-90% reduction in electricity bills. 

He says the company failed to install some parts of the package, the solar equipment has experienced failures, and that his energy bills have never been offset by more than 40%. 

He also says the company’s customer service department stopped replying to his emails and calls in early 2021, and that he hadn’t heard from them until very recently, when they alerted him to a problem with some of his solar equipment.

We were able to examine the contract Mr. Kleinsmith signed with Powerhome, as well as the Generac dashboard that shows his solar system's production. The contract shows an Energy Efficiency Package that included "blown insulation, hot water heater thermal blanket, attic staircase cover, and a solar attic fan". It also shows an estimated solar system production of 7,690 kWh per year. Between the proposed solar and Energy Efficiency Package, Powerhome's contract estimated a 74% offset of Kleinsmiths' previous year's energy usage.

July 2022 update: We also got access to Kliensmith's energy usage numbers: during the initial sales consultation, Kleinsmith provided 8 months of energy usage numbers, showing an average monthly usage of 1,448 kWh, or an annualized usage of 17,376 kWh. So Powerhome's 7,690-kWh estimate of solar production would only offset 44.3% of that usage.

In order to reach the contract's estimate of 74% offset, then, the Energy Efficiency Package would have to decrease annual energy usage by 5,161 kWh, or 29.7% of the annual total. That is nearly double what the EPA estimates can be accomplished with more extensive home insulation and efficiency improvements than were performed by Powerhome.

It seems likely that the Powerhome sales rep mistakenly input the 8-month number as though it were Kleinsmith's annual usage. If the Powerhome rep assumed Kleinsmith's annual usage was just 11,584 kWh, the 7,690 kWh production estimate would offset 66.4% of usage, and the Energy Efficiency Package would only need to reduce usage by 882 kWh to match the promised 74% offset.

Unfortunately, the contract doesn't make it clear what annual usage number Powerhome used for its calculations. Even if this misunderstanding is down to a clerical error, this is not the kind of error that solar companies should make. The omission of important numbers in a contract is a systemic failure.

Regardless of the offset estimate, there have been (and continue to be) major issues with the production from Kleinsmith's solar installation. The Generac dashboard shows that the system had some problems throughout the first five months after installation (Kleinsmith told us it was because the installer did not know how to properly set up the system to operate with Time of Use billing and that he had to learn how to do it himself). But looking at the time period between March 21, 2021 and March 20, 2022, the system produced 7,600 kWh - which is 90 kWh less than Powerhome estimated in the contract.

Still, for most of the system's life, it has produced far less energy than Powerhome's estimates, and the Energy Efficiency Package savings promised (but not "guaranteed", per a disclaimer in the contract) by Powerhome have not materialized. A single 12-month period where the solar system produced almost as much as estimated does not make up for all the rest of the problems.

The recent production of Mr. Kleinsmith's Generac system shows that as of July 2022, the system is making just half of the energy it did in 2021, with nearly all daily production totals under 20 kWh. Two of the system's four PV Link string optimizers are offline, showing error code 0x7310, and not producing power. In July 2021, there were many days when the system produced over 40 kWh.

How to protect yourself if you’re interested in solar for your home 

Up until this point, we’ve talked about what homeowners are saying about their bad experiences with Powerhome Solar. 

But there are hundreds of solar companies in the United States, as well as tens of thousands of satisfied solar customers whose systems were installed without issues and are producing what their owners expect them to. In addition, there are many solar system owners who have encountered issues, and found their installer up to the job of fixing those issues both quickly and satisfactorily.

So how can you make sure you end up a happy solar customer and not an angry one? Arming yourself with knowledge about how solar works and what you can expect is the best first line of defense. The second is choosing the right company for your specific needs

Here’s some knowledge and guidance about how to avoid the situations described in the complaints above.

How the federal solar tax credit works 

If a solar salesperson tells you, “You’re going to get a big check from the government” without telling you more about how the tax credit works, they’re not being honest with you. 

The federal solar tax credit does allow people to claim 26% of the costs to install solar panels in 2022 as a credit on their taxes next year, but you can only receive up to the amount you would have otherwise paid in taxes. 

For example, let’s say you get payroll tax deductions of $200 taken out of your check every two weeks, which comes to $5,200 per year. If you would normally get no tax refund, nor pay any additional taxes, that $5,200 is the maximum amount you can receive as a solar tax credit. If you can’t claim the full solar tax credit in one year, the IRS allows you to roll it over and claim it in future years. 

That’s the simplest way we can put it, but taxes are almost never simple. We are not tax experts. Solar companies are not tax experts. If you are unsure about whether you can claim the solar tax credit, speak to a tax expert.  

How to estimate production and identify problems 

One of the main complaints present in the news stories and reviews of Powerhome is that the systems aren’t producing as much energy as the salespeople told the homeowners they would. 

Another common complaint was that the homeowners’ energy bills hadn’t gone down as much as they were told they might. Unfortunately, the news reports didn’t use numbers to show how much the Powerhome systems produced, nor did they show how much the energy usage changed for the customers they talked to, compared to before they installed solar.

The fact is, we have very reliable ways of predicting how much energy a solar system will produce if it is properly installed and operating normally. The National Renewable Energy Lab (NREL) has kept records of solar irradiance per square meter for almost three decades, and NOAA has records dating back to the 1960’s. That said, annual fluctuations do occur, and production can increase or decrease by several percentage points based on the weather in a specific year.

When you go solar, you will get an estimate of production - but unless you sign up for a solar lease or power purchase agreement (PPA), you will not receive a solar production guarantee. If you want to check a solar company’s production estimates, you can do it for free in several ways, from easiest to hardest:

  • You can use our solar calculator to get a highly accurate production estimate based on your zip code, the direction your panels are pointed, and the slope of your roof
  • You can use PVwatts by inputting additional information and customizing things a bit more to get another estimate, which includes a low and high range of production based on annual variance
  • If you’re a technically-minded person who likes very complicated software packages, you can download NREL’s System Advisor Model (SAM) and input all the many variables necessary to calculate an estimate of system performance based on equipment used, latitude and longitude, azimuth and tilt, etc. etc.

One thing you should be wary of is promises of energy efficiency improvements greatly reducing your energy consumption. Don’t pay a bunch of extra money for attic staircase covers and LED bulbs. A water heater blanket does almost nothing to improve the efficiency of a water heater. Replacing an older electric water heater with a heat pump water heater, however, does.

Finally, you can get quotes for solar from multiple companies and compare their production estimates. What you want to compare here is the number of kilowatt-hours produced by each kilowatt of solar panels on an annual basis. That way you can compare between installers to see what each of them are estimating. If one is very high compared to the others, you should ask why and how they got those numbers

Talk to customers of the solar companies to see whether their systems are producing what they were estimated to, and what it was like dealing with them. Look at reviews for solar companies you’re considering to see whether there are dozens and dozens of negative comments about them.

Unless you’re very sure of what you’re doing, don’t let a solar company install panels where you get a lot of shade. Also, we’re not saying don’t let the installer put panels on a north-facing roof (they’ll produce about 25-30% less energy there), but you should definitely not do it if you live in Michigan.

Finally, if you get solar, demand the ability to monitor your solar output. If possible, get a solar monitoring solution that shows production by each of the modules in your system, so you can see when one or more of them isn’t making as much as it should, or isn’t working at all. 

The Generac PV Link substring optimizers used in Kleinsmith’s Powerhome installation record solar output in real time and historically. If you monitor your system on a regular basis, you should be able to see when one string isn’t producing as much energy as the others, or if it has a failure. Some solar installers even monitor the system for you to alert you of problems and give themselves the chance to take action.

How to avoid being surprised by higher total costs after a solar installation 

Buying solar panels is a huge decision that often costs tens of thousands of dollars. These days, most people buy solar by financing the purchase through a solar loan. Financing can be a great way to enjoy the benefits of solar energy while you use the savings to pay off the cost of the system. Unfortunately, it can come with a few surprises, as well.

Loan payments are the same every month, while the energy solar panels make varies with the seasons. That means you might be paying more for the loan in the winter than you save by using solar energy, but then see fairly substantial savings in the summer. 

If you live in a state with net metering, these savings tend to even out as you bank kWh credits during the sunny months and use them later in the year. Despite that, it’s likely that the savings you see will always vary from month to month.

Also, the loans themselves can be complicated. Many financing providers offer loans with no money down and long term lengths that lead to the homeowner seeing savings, by paying less per month for the combined loan payment and new electric bill, than they were paying before going solar.

However, there are often hidden fees associated with these kinds of loans and it’s important to know exactly what you’re getting before you sign up.

  • First, many solar loans that promise low payments are built around a large “balloon payment” after the first year. Lenders often require a homeowner to pay the entire amount of the federal tax credit within 18 months in order to keep their payments low. As we discussed above, some people can’t get the full amount of the federal tax credit back in one year, and are therefore stuck either making the balloon payment out of pocket or seeing their monthly payments increase.
  • Secondly, many low-interest 20 or 25-year solar loans come with dealer fees that are added to the cash price of the solar installation. That is, if you pay the installer for the installation in cash, the total price would be less than the amount you would have to finance through a solar loan. These dealer fees can be anywhere from 5 to 15%. If you have equity in your home, it can often be a better choice to instead get a home equity loan and just pay the installer’s cash price.

This is another reason why it pays to shop around. Some solar installers price their systems so that the loan payment equals about what the solar panels will save you in an average month. You should get multiple quotes and compare them on a dollars-per-watt basis.

How to avoid long wait times for permits and inspections 

Permitting, inspections, and utility company bureaucracy are common pain points for many people during the solar installation process. 

The sad truth is there are hundreds and hundreds of jurisdictions in the country that have authority over building permits, electrical and fire codes, and interconnection with the grid - and they all have different rules. The process of going solar puts you in contact with a number of them, and depending on your location, they’re not all easy to work with.

The typical timeline for going solar includes waiting of a couple weeks for system design, one to four weeks on permits, one or two days to install the system, and another month or two to get final inspections and permission to operate the system. 

Here’s a graphic from NREL showing residential solar timelines (for clarity, AHJ stands for “Authority Having Jurisdiction”, e.g. city permitting offices and fire marshals, and PTO stands for “Permission To Operate”):

The process of getting home solar panels often takes between 100-120 days. Image source: NREL

It is very important that your installer informs you thoroughly about the process and keeps you updated throughout. A lot of the failures described by Powerhome’s customers seem to be related to customers not knowing what the next step in the process would be, when it would happen, and who was responsible for making it happen. 

Many local solar installers have good relationships with city permitting offices, utility inspectors, and other people responsible for making sure their solar installations are done right and ready to connect. National solar companies can struggle when it comes to having these direct relationships because they provide service to huge geographic areas that may have different laws and regulations that govern solar installations, making it difficult to keep track of it all. 

But that doesn’t mean national installers don’t do a good job of keeping their customers up to speed and on track. This is another reason to choose a solar company carefully. Make sure you know who you’ll be working with through this process, read reviews, and talk to other customers if you can in order to learn about how the company’s representatives guided them.

As a final note, there are many people working on ways to improve the permitting and inspection process in order to streamline it for future solar projects. In fact, jurisdictions all around the country can now use a free tool called SolarAPP+ which makes it easy to get the right information from a solar installer and make sure the permit application is approved quickly.

How to avoid getting shoddy work from a solar installer 

None of us should ever expect bad work from a contractor. Period. With that said, there are ways to make sure you choose a company with employees who have the training and expertise to do a good job. 

In the USA, solar installers, technical salespeople, and inspectors can and should get certified by the North American Board of Certified Energy Practitioners (NABCEP) to prove they hold the technical knowledge and professional skills to do the best possible work. 

Like all contractors, solar installers should be licensed, bonded, and insured to protect you against any damages they cause. In addition, you should look for solar installers who employ their own installation crews and clearly communicate about the installation process. 

Finally, choose a solar installer that offers warranties to cover their work—especially roof penetrations—against defects in the products used or workmanship performed.

Final thoughts on Powerhome Solar 

Unfortunately, we can’t verify all the details in the news reports, but there does seem to be an awful lot of complaints about Powerhome Solar installations from people all over the company’s service territory. 

We’re concerned that people will see the news stories about bad experiences with solar and decide that it’s not a good idea to get solar panels for their own home. As we mentioned above, there are hundreds of solar companies in the U.S., and tens of thousands of happy solar owners

It’s important to take the decision to go solar very seriously, compare quotes from multiple companies, and read reviews from their customers before deciding. 

Make sure to read the contract before you sign anything and consult legal, tax, and financial experts you trust if you’re unsure of what’s in it. Don’t sign a contract with a binding arbitration clause unless you’re comfortable with handling disputes that way. 

It is so important that you choose a company with a reputation for good work and great customer service, with employees who are NABCEP-certified and have experience working with utilities, permitting offices, and inspectors in their local area. 

If you feel dissatisfied with a company and can’t come to a resolution with them directly, you can contact NABCEP, write reviews here and in other places (companies tend to care very much about looking bad in public), contact enforcement agencies like the Federal Trade Commission and state Attorney General, and discuss legal remedies with an attorney. 

The hundreds of companies in this industry that care deeply about their reputation and professional relationships will work to satisfy every customer to the best of their ability.

 - Author of Solar Reviews

Ben Zientara

Solar Policy Analyst and Researcher

Ben is a writer, researcher, and data analysis expert who has worked for clients in the sustainability, public administration, and clean energy sectors.

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