The dark side of solar panels – how crooks are exploiting net zero

After a decade of green initiatives and generous government incentives, solar panel sales are booming.

Over 50,700 units were mounted on UK rooftops between January and March, double the figure in the same three months last year, as homeowners scramble to save money in the face of soaring energy bills. 

But as solar panels have flown off the shelves, the industry has developed a dark underbelly in which scammers and cowboy installers take eco-friendly households for a ride. 

The Financial Ombudsman Service received more complaints mentioning solar panels in 2022 than in the previous eight years combined, Telegraph analysis reveals. 

Complaint numbers have sky-rocketed from a low of 15 in 2018, to a record high of 853 last year.

Many of the complaints involve customers being promised bumper returns on their green investment by rogue traders who convince them to take out large loans to cover the upfront cost. 

Craig Mackinlay MP, chairman of the Net Zero Scrutiny Group, says the figures show that Britain’s solar industry has become a “new Wild West”. 

He adds: “The websites we visit are littered with adverts, deals and freebies on the back of the dash to solar panels. But some of the offers are too good to be true.

“This new Wild West has attracted the usual cowboys into a potentially lucrative market. The unwary and vulnerable are being exploited.”

More than 1.3m UK homes – 4.1pc – now have solar panels installed, according to standards organisation MCS. 

A series of grants, loans and tax breaks over the last decade have encouraged uptake. 

The Feed-in Tariff (FIT) scheme, launched in 2010, allowed solar panel owners to sell electricity they generate back to their energy supplier. FIT was replaced by the Smart Export Guarantee in January 2020. 

While domestic solar panel systems of 3.5kW cost around £7,000, a typical household selling energy back to the grid can save roughly £620 a year, according to the Energy Saving Trust.

In 2013, the Government’s Green Deal provided households with loans to pay for eco-friendly home improvements such as new boilers, insulation and solar panels. 

The scheme was scrapped two years later due to low uptake, leaving thousands of households lumbered with high-interest loans.

From April 2022, energy-efficient equipment such as solar panels, insulation and heat pumps have attracted zero VAT, instead of 5pc, and will continue to do so until 2027. 

However, homeowners making the most of the Government’s solar panel drive have increasingly fallen victim to conmen.

Citizens Advice has warned of a surge in solar panel fraud, particularly “upselling scams” in which cold-callers convince customers to upgrade technology they already have to meet fabricated legal “standards”. 

A small minority of cowboy builders carry out shoddy installations which lead to costly repairs down the line. Some firms ask for big cash payments up front for solar panels that never arrive. 

In April, renewable energy firm Daylight Energy went bust, owing customers over £1m in deposits, all of which was unsecured. While some customers have managed to recoup their money, many have not.

Brian Thompson, a painter and decorator from Gateshead, lost £2,400 after a salesman from PV Solar UK promised him that after an initial outlay the profits from solar panels would boost his retirement pot.

“I told him I was due for retirement,” he says. “There’s no way I want to put a rope around my neck and borrow money.”

But the salesman promised that the £90-a-month outlay to pay for the panels would be offset by £120-a-month of savings.

Convinced by the pitch, Mr Thompson took out a £7,000 loan from his bank that meant repayments of over £10,000 over 10 years. 

The firm, which went bust in 2017, installed solar panels on Mr Thompson’s end-of-terraced house as promised. 

But the reality was that the loan repayments far outstripped the money he was making from the panels. Mr Thompson commissioned an independent survey which showed that it would take more than 20 years to pay off the loan by selling electricity back to his supplier, National Grid. 

“It was a pack of lies,” he says. “I was mis-sold. When I realised, I was gutted.” 

Mr Thompson’s bank eventually wrote off the loan, but only after he had spent £2,400 on solicitors’ fees. He had to use equity release on his home to cover the cost. “It affected my pension plans,” he says.

Mr Thompson’s solar panels make him between £260 and £300 a year. But the saga has made him regret his purchase. 

“I wouldn’t recommend solar panels to anybody,” he says.  

Tony Walch had a similar experience after having solar panels installed by MyPlanet, which went bust in 2017.

He was told that installing the system would generate £35,000 of income over 20 years, and took out a £15,000 loan to pay for the installation. 

“It sounded legit,” he says. “They told me I’d be getting £1,500 to £2,000 a year back.”

After six months, it became clear he had been conned. “I was absolutely fuming when I realised. We were getting nearer £700 to £1,000. The output was half what they said. And we had to pay £130 a month in repayments. They oversold it.”

To make matters worse, shoddy installation caused Mr Walch’s panels to overheat after the inverter broke down.

He was told by the salesman that the panels were covered by an insurance-backed guarantee approved by the Government, but when he phoned the insurance company, he found it had gone into liquidation.

He took the company to court to get back the money he had borrowed. As the firm had gone bust, the court ordered his bank to write off the loan. But the repair work and lost FIT payments ended up costing him £2,526. 

Mr Walch says he would avoid getting solar panels again if he had the chance. “It’s a lot of aggravation and hoo-ha. 

“We still have companies coming round offering to service our panels and sell you batteries. I say I’m not interested. Once bitten, twice shy.”

The Federation of Master Builders (FMB), a trade body, has urged households tempted by cheap deals to be cautious. 

Brian Berry, the FMB’s chief executive, said: “With homeowners looking to bring down bills ahead of the winter, cowboy builders are looking to take advantage of the situation by offering dodgy installation of green measures to homes, like solar panels. 

“But with little jeopardy for cowboy builders, they will keep on plying their trade and fooling unsuspecting members of the public. 

“The FMB has long called for builders to be licensed, so customers have a way of protecting themselves against poor practice. 

“My advice to homeowners is to get a few quotes, look at previous work and be wary of a builder that can start straight away.”     

Wendy Martin, director of National Trading Standards, a consumer protection body, said: “Now more than ever, homeowners are looking at ways to install green energy products like solar panels and heat pumps in their homes – but these are often mis-sold or retrofitted by criminals looking to exploit the good intentions of honest homeowners who want to reduce their carbon emissions.

“We need a joined-up approach working with regulators and other enforcement bodies that improves standards in the market and prevents criminality.”

A government spokesman said: “The UK has one of the strongest consumer protection regimes in the world. However, we recognise just how infuriating this must be for the victims and are committed to ensuring people are protected from rogue traders.

“Local authorities have the power to investigate poor trading practices and enforce standards for building work like this. Breaches of these standards can lead to enforcement notices, prosecution and unlimited fines.”