Solar rebate scam: How does it work?

 

In 2019 the average household could claim a $3000 rebate to install a new solar system on their roof.  This significantly increased the demand for cheap solar systems, providing the perfect opportunity for solar rebate scam operators.

 

This is because, with a cheap solar system for your home, most if not all of the cost was covered by the rebate.

 

How does it work?

 

The rebate scheme had been running successfully for the past decade, except for one glaring loophole.

 

According to legislation, households could claim the rebate over and over again, with no limits, leading to these steps:

  1. Customer buys cheap, poor quality solar panels and uses the rebate to cover the cost.
  2. The solar system fails in 3 (or less) years and needs to be replaced.
  3. It gets thrown into landfill and replaced with more poor quality solar using the rebate and the cycle continues.

 

You could have one failed solar panel or even a few on your roof and simply replace them with the rebate as many times as you wanted.

 

Dodgy solar companies could then recover the full cost of the panels through the rebate.

 

This greatly favoured cheaper, poor performing solar as solar scam companies profited off the constant need to replace their crappy solar panels.

 

In extreme instances, solar companies installed panels and then a short time later claimed that there was a “defect” with the panels. They would then offer to replace the panels for free thanks to the rebate legislation.

 

This effectively allowed them to claim the rebate twice for the same panel. The panels that they had just removed, were then shipped an sold to NZ, Fiji and other nearby countries.

 

This produced huge profits for dodgy solar companies, from one set of solar panels.

 

Government response to stop the solar rebate scam

 

In order to stop this practice, the Clean Energy Regulator put new rules into place. From February 2018, failed panels could no longer attract the rebate more than once.

 

Or so it would seem…

 

Unfortunately, the solar rebate scammers discovered a new loophole. They realised that the Clean Energy Regulator allowed systems that were “renewed” to benefit from the rebate again.

 

Here’s an example of the loophole in action:

Recently over 200 000 panels from a Tier 1 manufacturer failed after as little as 4-5 years – many of them in the humid conditions of Queensland’s North.

 

In order to turn this potential financial and environmental disaster into a profitable venture, perfectly good inverters were also taken off and disposed of.

 

Customers were then told to pay for new inverters as part of the “system renewal”, due to this “renewal” all the replaced panels attracted the rebate again.

 

How the solar rebate scam works today

 

Nowadays, when panels fail, the “smart” installer simply switches the inverter and the panels together and voila – the rebate can be double dipped again.

 

For a standard 6.6kw system this is an amount of between $3000 and $3600 each time. These costs are paid for by all electricity consumers through higher electricity prices.

 

Environmental impact

 

This practice has led to thousands of poor quality panels flooding landfills before they can offset their embedded emissions (Carbon emissions produced from manufacturing and transportation).

 

Not only does this wasted limited landfill space, it means that these panels actually produce more carbon emissions than they save over their lifespan.

 

If consumers understood the full environmental impact, they would surely think twice before buying cheap, disposable solar.

 

Our recommendations

 

Close all loopholes that allow the rebate to be claimed twice for the same panels. No double-dipping of the rebate in any circumstance. One rebate per home – period.

 

The 2 million solar systems on Australian roofs have so far been given on average a $4000 rebate per system. This means that $8 billion of subsidies were recovered through higher electricity prices to support the solar industry.

 

It is essential that this rebate scheme is fixed so that it it robust, and not easily exploited.

 

Until the loopholes are fixed we recommend doing your research and only buying from reputable solar companies with a proven track record. This might mean paying a bit extra upfront but it will save you trouble and money in the long term.