Georgians complain solar sales reps misled them over tax credit

Disabled veteran Charles Schwable pays no federal taxes. So why did a solar energy sales rep price his system like he was entitled to a big tax credit?

Powering your home with the sun doesn’t come cheap.

To help lower the costs of home solar energy, Congress approved a significant 26% tax credit – money you get back directly on your taxes.

But a FOX 5 I-Team hidden camera investigation showed how some companies mistakenly let customers think they’re eligible. And by the time they learn the truth, it’s too late to cancel.

“I hate a liar,” complains Charles Schwable. “Looks like you were taken to the cleaners.”

Last year, the 60-year-old disabled veteran searched online for information about solar energy. An ad appeared for Solar Titan USA in Knoxville, Tennessee.

Solar home customers can recoup 26% of the installation cost as a tax credit the following year. Only problem: you have to pay so much in federal taxes.

A sales rep visited the home in Schwable’s Temple, Georgia, and explained how solar power would lower his electric bill.

“He told me he guaranteed it would be cut 90%,” Schwable recalled. “Then he jumped into the tax incentive.”

This is a federal tax incentive that allows homeowners to recoup 26% of the total cost of installing solar panels and other equipment when they file their taxes the following year.

Schwable therefore committed, agreeing to spend $71,500, funded over 20 years. The tax credit would bring the price down to $52,910.

But he said he would quickly learn two frustrating lessons: his system wasn’t saving him 90% on his electricity bill.

And he wasn’t entitled to any of that 26% tax credit. You only get this money if you pay at least that much in federal taxes.

Schwable has no taxable income.

“They know I was a disabled veteran,” he said.

Amie Tatro said she and her husband, a disabled veteran, would never have agreed to buy a $91,000 solar home system if she knew they didn’t qualify for the federal tax credit. They don’t.

The same thing happened to Amie and Nathan Tatro in La Fayette. When they agreed to pay Power Home Solar $91,000, they say the seller promised they would get that full tax credit — over $23,000 — to reduce the cost.

“They’re wrong,” Amie said. “My husband is a disabled veteran. We are not taxed.”

But much like Schwable, the Tatros only discovered they were ineligible when it was too late to cancel their contract.

Both have signed contracts that warn that the tax credit is not guaranteed. Amie and Nathan had it on page 7.

The warning was on page 8 of a 27-page package Schwable received.

They all insist that it was never clearly explained.

The FOX 5 I-Team asked Amie if they would still have purchased the system if they knew they weren’t eligible for the tax credit.

“Absolutely not,” she insisted.

Could they really be confused about the tax credit rules?

This Power Home Solar senior account manager cheated our grower about the federal tax credit. The company said he was later fired.

We invited the two companies to a house equipped with hidden cameras to hear what each was saying about the solar tax credit.

Home solar power:

Sales Rep: Now the only qualification you need is to pay federal taxes.

Us: Okay.

Sales Rep: Do you pay federal income tax?

Us: I am on disability.

Salesperson: So you still file your taxes at the end of the year?

Us: Yes.

Sales Rep: Are they withdrawing federal tax?

Us: Yes.

Sales Rep: That’s all that matters.

That’s not all that matters. In order to keep a low monthly payment, companies like Power Home Solar require you to pay the full tax credit to the finance company within the first 18 months.

But remember, you can only get this full credit if you pay that much in federal taxes that year.

Power Home Solar agreed to cancel Tatro’s contract and withdraw its system due to “pretty significant miscommunication” from its sales representative.

“They don’t explain it precisely,” complains Amie. “They just tell you it’s a guarantee, something you’re going to get.”

Power Home Solar says they have fired our salesperson and due to other complaints across the country they are now implementing new systems to monitor sales staff to ensure they are telling customers the truth.

The company – now called Pink Energy – will also extend the cancellation period from three to seven days.

And he agreed to remove Tatro’s system for free, cancel their contract, and refund any payments they’ve already made.

Our undercover producer also told Solar Titan USA that she was on disability. The sales representative never warned her that this could make her ineligible for the tax credit.

“They give you a check for that amount of money because it’s overkill,” he explained. “The 26% off on top.”

Charles Schwable seems to be stuck with the deal he made with Solar Titan USA, even though he said he was led to believe he would get the tax credit.

A spokesperson for Solar Titan USA wrote “we are not tax experts and cannot argue who is eligible and who is not.”

The company believes there are enough disclaimers in their contract – and that of the finance company – to protect their customers, even if the sales pitch may have been far too sunny.

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