Suing Solar Panel Installers for Predatory Leasing and False Savings in New Jersey
If a solar company scammed you with false promises of zero electric bills or secretly placed a lien on your New Jersey home, you can sue them under the Consumer Fraud Act to break the lease, recover triple your losses, and force the removal of the lien.
New Jersey is a national leader in solar energy adoption. Unfortunately, the boom in solar installations across cities like Camden, Newark, and Toms River has attracted a massive wave of predatory companies. Aggressive door-to-door salespeople pressure homeowners into signing confusing, 25-year solar leases with promises of huge tax credits and the total elimination of their electric bills. When these promises turn out to be lies, homeowners are left in severe debt. Using our US Lawyers Directory to find a consumer fraud attorney is the most effective way to break a fraudulent lease and protect your property rights.
Common Solar Panel Scams in New Jersey
Fraudulent solar companies rely on confusing financing structures and deceptive marketing. Their actions consistently violate the New Jersey Consumer Fraud Act (N.J.S.A. § 56:8-2), which protects residents from unconscionable commercial practices.
Misrepresentation of Tax Credits and False Savings
The most frequent lie told by solar sales reps is that you will receive a massive federal tax rebate that will cover the cost of the system. They fail to explain that this is a non-refundable tax credit, meaning if your tax liability is low (which is common for retirees on fixed incomes), you get absolutely nothing. Furthermore, they promise your monthly utility bill will drop to zero. In reality, most homeowners end up paying the high monthly solar lease plus a continuing bill from their utility company. This misrepresentation creates a clear 'ascertainable loss' under the standard set in Thiedemann v. Mercedes-Benz USA, 183 N.J. 234 (NJ Supreme Court 2005).
Hidden Roof Damage During Installation
Substandard solar installers often rush the job, drilling improperly into the roof and failing to seal the penetrations. Months later, severe water leaks ruin the attic and interior ceilings. The company will often point to fine print in the contract claiming they are not responsible for roof integrity. However, New Jersey courts view such waivers with extreme skepticism when the contractor's gross negligence caused the structural damage.
Liens Secretly Placed on Your Home (UCC-1 Filings)
When you finance or lease solar panels, the company will file a Uniform Commercial Code financing statement on your property. This is known as a UCC-1 fixture filing. While they claim it only applies to the panels, it effectively acts as a cloud on your property's title. When you try to sell your home or refinance your mortgage, the title company will flag the UCC-1 lien, preventing the transaction until the solar lease is paid off-often tens of thousands of dollars. Scammers routinely hide this fact during the sales pitch.
Companies Going Bankrupt After Taking Deposits
Many 'fly-by-night' solar companies collect large upfront deposits and then file for bankruptcy or simply disappear before completing the installation. Alternatively, the installer goes out of business, leaving you with no warranty support when the inverter breaks, yet the third-party finance company continues to demand their monthly payments.
Step-by-Step Process to Fight Back
Breaking a predatory solar lease requires aggressive administrative and legal action.
- Step 1: Gather Your Paperwork. Collect the initial glossy marketing materials, the full lease agreement, and your recent utility bills showing the lack of savings.
- Step 2: File an Administrative Complaint. Submit a formal consumer complaint with the New Jersey Division of Consumer Affairs, Newark under the Contractors' Registration Act (N.J.S.A. § 56:8-136 et seq.) and N.J.S.A. § 56:8-1 et seq., or file an inquiry through the Customer Assistance portal of the New Jersey Board of Public Utilities, Trenton. State regulators can investigate deceptive contractors and penalize bad actors.
- Step 3: Issue a Revocation Demand. Have your attorney demand the immediate cancellation of the lease and the filing of a Form UCC-3, New Jersey, Division of Revenue, Financing Statement Amendment to release the lien on your home.
- Step 4: File Civil Litigation. If the company refuses, file a lawsuit in the Superior Court of New Jersey, Chancery Division, Camden (or your county). The Chancery Division handles cases where you are asking the court to 'rescind' or tear up a contract.
How Much Does it Cost and How Long Does it Take?
Consumer fraud lawyers often take solar scams on contingency due to the CFA's fee-shifting provision, meaning the solar company pays your legal fees if you win. If they charge hourly, it is typically $300 to $500 an hour. Removing a fraudulent UCC-1 lien and securing a settlement often takes 4 to 8 months. If the massive third-party finance company fights the lease cancellation in court, the litigation can take 1.5 to 2 years.
Frequently Asked Questions (FAQ)
Can I stop making my solar lease payments?
It is highly risky to simply stop paying, as the finance company will severely damage your credit score. You should continue payments while your attorney officially litigates the cancellation of the contract to protect your credit.
What happens if the company that installed my panels goes bankrupt?
If the installer goes bankrupt but your lease is held by a separate third-party finance company, you may still be bound by the payments. However, under the 16 C.F.R. § 433.2, your attorney can often assert the same fraud defenses against the finance company.
Does the 3-day right to cancel apply to solar?
Yes. Under New Jersey law and federal regulations, if the solar contract is sold to you in your home, you have a strict 3-day 'cooling off' period to cancel the contract without penalty. The salesperson must inform you of this right in writing.
Will the solar company have to fix my roof?
If you successfully prove that their negligent installation caused the leaks, the court can order the solar company to pay the full cost of repairing or replacing your damaged roof as part of your ascertainable loss.
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