UPDATE – Scammers packaging solar with Energy Efficiency (GEE)

scam-alert-picHopefully you are familiar with this scam by now.  If not, the background story is here.  You are solicited by phone or at your door to take advantage of a “government program” that pays for solar and energy improvements for your home.  It sounds good and you want to take advantage of this free money from the government, but the professional and insistent salespeople want you sign today or miss out on the “special deal”.

1. Here’s the deal, (or some variation) which is only available “today and today only”:  They offer a package deal on  Solar Seal Radiant Barrier, GEE Powermizer, Solar Attic Fan, Air Mastic Duct Work, Insulated Outlet Covers, Water Heater Wrap, AND a Solar System!   All for $16,900.  But wait!  You get -$4500 Federal Tax Credit (FTC). and -$7500 LA State Tax Credit (STC) for a net cost of only $4900.  This is too good to be true!!!! (You’re right).

***(Let’s look how that just happened piece by piece.  You get (normal prices shown, not theirs)….. Solar Seal Radiant Barrier (foil backed bubble wrap) – $500, GEE Powermizer (surge protector) – $150, Solar Attic Fan – $200, Air Mastic Duct Work (tape) – $10, Insulated Outlet Covers (gaskets) – $10, Water Heater Wrap – $30, AND a Solar System (1 kilowatt) – $4000.  Bought elsewhere at normal price the package would cost you $4900.  Wait, what?  Isn’t that the same as their after tax credits price?  Yes.

***Where’s the rip-off?  To get a $4500 FTC you would have to “claim” to the feds that you spent $15,000 on 4 solar panels worth $4000.  Oops, that can’t be good!!!  To get a $7500 STC you’d have to claim those same 4 solar panels cost $15,000 again.  Oops, are you committing a crime or is the sales company?  By inflating the price of solar panels 375% and co-mingling it with $1900 “worth” of energy efficiency improvements (only inflated 211%) the Energy Efficiency company says you can then get the money from the state.

*** So how much does this cost our state in the form of fraud?  $5500 paid out (over the $2000 they should be claiming) for each system, at a minimum.  There are probably thousands of these claims so far since late last year when this scam started.  The rip-off amount from the state general fund per (1000) of these scams is $5.5 MILLION.  The legislature has added language to help stop this tax credit fraud that may take effect on 7/1/15.  Stay tuned for that to happen.

*** BEWARE –  I’ve already turned in all of this information to the Louisiana Department of Revenue Fraud division as well as the State Attorney General BACK IN JANUARY.  I am still waiting for any word on the charges.  Government moves slowly.  When we turned in the “Leasers” for operating without a license it took the Louisiana State Licensing Board for Contractors (LSLBC) NINE MONTHS to file charges and shut them down.

*** 6/23/15 UPDATE – The solar tax credit law has been revised to stop the overcharging of the state for these systems.  As of 7/1/15 a taxpayer can only claim $2/watt credit for these systems.  So now when this company (or another) puts four – 250 watt solar panels on a residence (1000 watts) and throw in some insulation and a thermostat for $20,000,  the taxpayer can only claim $2000, not $10,000.