What Black homeowners should know about misleading ROI on solar panels
Black homeowners considering switching to green energy should be aware that unscrupulous individuals and contractors exaggerate solar energy return on investment (ROI). They make unrealistic promises they can’t or won’t keep (e.g., eliminate energy bills) and mislead consumers to secure sales.
The misrepresentation of ROI on solar panels isn’t just a small issue, either. It’s a growing problem that has led to a dramatic increase in complaints made against the solar industry.
Yahoo, for instance, reported in 2024 that one-star reviews left on SolarReviews.com, a consumer education and review site, have increased by over 1,000% since 2018.
What Does the Term “ROI on Solar Panels” Mean?
The term “ROI on solar panels” refers to the measurement of these devices’ financial profitability. Think of it as a representation of their return on the money you spent, in percentage or dollar amount.
You can calculate solar ROI by comparing the system’s total electricity savings and incentives over its lifetime versus the cost of solar panels, their installation, and other related fees.
Your system’s ROI only starts after the solar panel payback period. The latter is the length of time it takes for the system to produce enough electricity savings to cover its total cost.
What Is the Average ROI on Solar Panels?
EnergySage, a solar comparison-shopping marketplace, says the average solar panel savings is about $61,093 over 25 years. The starting point of a typical shopper’s savings is after they break even, which for some can be after five years, while for others, it could be as long as 15 years.
What Should Black Homeowners Know About Misleading ROI on Solar Panels?
Black households have historically been a target of predatory lending practices. An older report from the U.S. Department of Housing and Urban Development (HUD), for instance, found a disproportionate percentage of subprime loans within African-American neighborhoods.
Considering those statistics, today’s Black homeowners should be aware that they may still become targets of aggressive and predatory sales tactics that exaggerate, even falsify, ROI on solar panels.
Inflated Energy Savings
Sales personnel may make unrealistic promises when selling solar panel installation projects to Black households. They may claim that once the solar power system is in place, the owners will always see a 100% reduction in their electric bills.
Unfortunately, there’s no guarantee that a solar panel system will always reduce electricity bills to $0, as owners may still have to pay fixed utility fees, taxes, and net metering charges.
Hidden Fees
Financing companies may inflate the total solar loan amount via what they call “dealer fees.” If they don’t disclose these charges, they’re likely breaking the law (Truth in Lending Act). TILA requires lenders to disclose all charges associated with consumer loans up front.
If this happens to you or someone you care about, know that consumers can get out of solar contract deals that are fraudulent, misleading, or misrepresented.
Don’t Let Shady Solar Deals Get to You
Exaggerated ROI on solar panels can mislead Black homeowners into signing with a shady company that won’t be able to keep their promises and deliver the results they claim they can. Don’t fall for these tactics, especially if they involve $0 energy bills or very short payback periods.
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