Don’t Get Burnt by Solar Phoenix Companies
Don’t be fooled by companies that promise deals on solar, simply because they’re cheap; you may be dealing with a Phoenix Company or a Solar Cowboy.
According to the Australian Taxation Office, a Phoenix Company is one which “is created to continue the business of a company that has been deliberately liquidated to avoid paying its debts.”
What this essentially means, is that a company has purposely closed down so it can avoid paying costs such as taxes, employee entitlements and most important to you; claims and warranties. The company then reopens, often using the same name, to perpetuate the scam again, and avoid the risk of claims from previous creditors, customers and staff.
The risk to customers is that if your solar system has a fault, or breaks, you have no recourse and will have to pay for repairs or full replacement out of your own pocket.
According to the Consumer Action’s Sunny Side Up Report (2019), around 700 solar companies have gone out of business since 2011, leaving over 650,000 Australians without warranties if their systems fail.
Just because a brand has a well known celebrity ambassador, or ads appearing on Google and Facebook, does not make them genuine.
In fact, these companies often invest large amounts of cash into marketing, so they can sell solar systems rapidly before they close the company. Although there is no simple checklist to identify a Phoenix Company, there are some easy steps you can take to make sure any company you’re dealing with is legitimate and won’t cost you money in the long term.
- How you were contacted. If you received an unsolicited cold call, or were offered free solar panels, it’s time to beware. The ACCC has strict rules about solar cold calling and even with Government rebates, no solar system is free. As of 2020, the Government Rebate (known as STCs) covers an average of a third to a half of most solar systems.
- Pre-installation steps. If you’ve purchased solar site unseen, you may be in for a nasty surprise when it comes to addon costs. If the installing company hasn’t visited the site, they won’t know whether your switchboard is compliant, or if there are any electrical issues that need to be fixed before installation.
- The age of the company. A simple and free ABN search will allow you to see how long the company has been trading. If they haven’t been in business long, it might be a smart idea to choose a more established solar seller.
- Online reviews. Check online reviews on multiple platforms, to get a good overview of the company’s feedback. Some companies pay money for five star reviews, so take a look at low ratings when doing your research, too.
- Their location. Just because the company lists an office in your region, doesn’t mean they actually work from that location. Many companies rent out an office address or letter box so they can list the location as part of their service area, then outsource to contractors who complete the installation for them.
Taking these steps will help you avoid most of the phoenix companies which are looking to sell fast and disappear. Choose a reliable and efficient solar installer who takes the time to assess your site, correctly and safely install your system, and use quality products that fulfill your power needs.
Remember; cheap isn’t cheaper in the long run.
Proven Energy has been in the solar industry since 2012 and we plan to be around for many more years to come. We offer our customers exclusive extended warranties available only to authorised resellers. We also monitor our client’s systems online at no cost, so so you know your solar is maintaining its peak production and you won’t be left in the dark.