Is Momentum Solar a Pyramid Scheme?

It’s no exaggeration that new scams are popping up online almost daily. In my quest to help people avoid these money traps, I try to keep my ear to the ground as much as possible.

One of the searches I kept coming across online was “Is Momentum Solar a pyramid scheme?”

I had no idea what Momentum Solar was, so I had to look into it. On the surface, I found a business selling a newer technology to the masses. Below the surface, I found a swarm of angry customers armed with business-ending allegations.

Why Do I Keep Hearing About Free Solar Panels?

If you’re an avid YouTube watcher, radio listener, or newspaper reader, you’ve probably seen one of the many commercials for “free” solar panels. Usually, these offers are part of a government-subsidized solar program that pitches the idea of getting free solar panels installed on your home's roof, which you’ll later be able to write off or get some kind of credit for.

First of all, these commercials are misleading, as these programs are rare, and only households that are considered low-income can apply for them. This doesn’t necessarily make these programs scams; it makes them bait. A way to get you into the door so they can sell you something else.

If you don’t live in a low-income household, chances are, the company will pitch either a “solar lease agreement” or a “power purchase agreement (PPA).”

With a solar lease agreement, you’ll get the panels installed with no upfront costs and then sign a contract binding you to a monthly fee for the use of the equipment. A PPA gets rid of the monthly fee and charges you just for the amount of electricity generated from the panels.

What is Momentum Solar?

In order for something to be a pyramid scheme, traditionally, the company that’s being used as a front doesn’t make or sell anything. This is not the case when it comes to Momentum Solar.

Momentum Solar is a turnkey solar solution company that handles the engineering, procurement, and construction of solar panels for residential and commercial clients. The company seems to be rapidly expanding and currently operates in seven states in the US:

• New Jersey
• Connecticut
• New York
• Pennsylvania
• Texas
• Florida
• (Southern) California

It’s also important to note that Momentum Solar is considered a legitimate company and one of the country's largest solar panel installers. The company claims that it’s able to cut your utility bill down to a fraction of what it was, and they have the proof to back it up:

So if Momentum Solar is a legitimate company that can lower their customers’ utility bills tremendously, then why do so many people think it’s a scam?

For the most part, it comes down to one word: contracts.

How Momentum Solar Handles its Contracts

One of the biggest reasons Momentum Solar has had such a bad reputation as of late is the “Cooling Off” rule and how the company handles it.

The “Cooling Off” rule is a federal law (16 CFR 429) that gives customers three days to cancel any agreement or contract with a business. This rule was put in place by the Federal Trade Commission to protect consumers from feeling pressured or rushed into a transaction.

Momentum Solar abides by this rule, but former customers have complained that the company has found ways around this by basically ignoring all phone calls and emails until the initial three days are up.

It’s even worse in Momentum Solar’s case, as their company policy is supposed to allow customers the chance to cancel any time before the equipment gets installed.

For example, one former customer on Reddit posted that the company was ducking all of their calls, texts, and emails about the cancellation. They even called their Town Hall to voice their concerns and block Momentum from getting the correct permits.

This person was also working for the company as a door-to-door salesman. They quit the company when they concluded that Momentum’s sales tactics were deceptive and designed to trap people in a power purchase agreement for two decades. This Redditor believes that the company was using psychological tactics to pump their sales numbers up as well.

Momentum Solar is plagued with complaints online about how they handle contracts, with some people claiming that the company tried to get thousands of dollars out of them after canceling:

Some complaints are centered on how pushy the salespeople are for the company, refusing to leave their homes until they sign on the dotted line.

There have even been some shady claims about installing a small disconnect box on people’s property just to lock them into their contracts:

Other Complaints About Momentum Solar

It’s not just the company’s handling of contracts that people have a problem with. There are plenty of other complaints as well.

For instance, the company’s customer service is often under fire for how long it takes for equipment to be fixed, with some people claiming that it took months for anyone to come out.

Another common complaint is misleading advertisements, with some customers claiming that their electricity bills didn’t go down enough. This complaint depends on the customer, as many people are satisfied with their results, but still, there are many claims that say otherwise.

To be fair to Momentum Solar, a representative for the company has managed to respond kindly to many of the complaints online. This type of acknowledgment points to some responsibility on the company’s end.

How to File a Complaint with Momentum Solar

Before you do anything, first try to contact Momentum Solar directly. It’s always possible that there’s some kind of misunderstanding or mistake on the company’s part.

If you can’t work things out with them, you may have to go to your State Licensing Board. This is one of the best ways to get someone else to investigate any potentially illegal issues you may have with the company.

If things need to progress further, you could file a complaint with your state’s Attorney General’s office or consider filing a claim against the company in court. It’s best to speak with an attorney before attempting any of these more drastic measures.

One thing you can do at any time is post your complaint on Momentum Solar’s BBB page. Most companies will take their reputation with the Better Business Bureau seriously, and voicing your concerns there may get them to pay more attention to your issues.

So, is Momentum Solar a Pyramid Scheme?

Again, it’s important to say that Momentum Solar is a real business, not a criminal enterprise designed to steal your money.

Is Momentum Solar a pyramid scheme? In short, no.

However, just because it’s a real company doesn’t mean it’s not a scam. If the product doesn’t work as advertised, then it could easily gain a reputation as a scam.

For now, all we can do is keep a close eye on Momentum Solar and ensure they fulfill their promises.

If you want to watch out for other scams out there, check out these:

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