This Pittsburgh man simply tried to cut his energy bills — and it turned into a financial nightmare. Here are the predatory tactics he fell victim to and 4 red flags to watch out for

The average U.S. homeowner will save about $50,000 on electricity over the lifetime of their solar panel system, according to online marketplace EnergySage.

That’s what Pennsylvania’s Larry Minnitti tried to do by having a solar panels installed on top of his Beaver Falls home. But what he thought would be a way to save money wound up becoming a financial ordeal.

"I'm left hanging, but I don't want this to happen to somebody else," Minnitti told CBS News Pittsburgh last month.

An unwanted financial surprise

Minnitti said he bought a solar energy system he thought he could afford to pay off over time. But he was in for a terrible surprise.

"They presented everything on a tablet," Minnitti told CBS News Pittsburgh about his interaction with the salespeople. "And once you signed it, all they did was flip to the next page … you never had time to, like, physically read the entire agreement."

Minnitti thought he had agreed to 20 years of affordable payments with Palmetto Solar. But he later learned he'd actually agreed to a balloon payment with the company’s lender at the time, Sunlight Financial. A balloon payment is a one-time large payment due at the end of a loan term.

"They put this clause in the contract about the voluntary payment," Minnitti said. "And if you don't make that voluntary $18,000 payment, my solar panel payment doubles from like $370 to almost $570."

CBS News Pittsburgh contacted Palmetto Solar to dig in further and learned that the salespeople who dealt with Minnitti worked for a third-party sales partner called Lifestyle Marketing.

Palmetto Solar issued Minnitti an apology, calling what he went through a "subpar experience." The company also acknowledged that "a deal structure error was made that should never have been presented."

Thankfully, it worked directly with Minnitti to resolve the issue and committed to paying off his entire loan. The company claims it has also changed its financial lending process.

But there are still many solar panel installers out there engaging in deceptive practices that could leave more people victimized.

How to avoid getting duped

In 2020, Pennsylvania's Bureau of Consumer Protection received 87 complaints about solar companies, reported KDKA. Last year, it received 227 complaints — a 160% increase.

And this is a national issue that regulators have sounded the alarm on.

In August, the Consumer Financial Protection Bureau (CFPB) said that some residential solar lenders are “misleading homeowners about the terms and costs of their loans, misrepresenting the energy savings they will deliver, and cramming markup fees into borrowers’ loan balances.”

It found that the rapid rise of nonbank lenders partnered with solar salespeople is raising the potential for illegal behavior and consumer harm.

If a salesperson knocks on your door trying to sell you a solar panel system, there are a few key red flags to watch out for.

First, be on the lookout for hidden markup fees. The CFPB warned that a solar company may agree to give a lender a kickback, which often increase the loan principal by as much as 30% above the cash price.

Also, consumers are often presented with a loan amount that factors in a potential tax credit. But not everyone qualifies for it, and depending on your income it could take years for you to get that money.

The CFPB also warns about ballooning monthly payments. If your agreement contains a balloon payment, your monthly payments could increase after a period of time unless you make a payment that matches the amount of your projected tax credit, whether you ultimately get that credit or not.

Finally, solar panel systems can save consumers money. But sometimes, the amount of savings isn't as substantial as companies say it is, especially when you account for the cost of maintaining your solar panel system. "Homeowners report being told that solar panels will cover financing costs as well as eliminate future energy bills," according to the CFPB, which may not always be true.