Suburban Chicago man says he got scammed by solar panel contractor -- how is Illinois preventing this?
ELK GROVE VILLAGE, Ill. (CBS) -- As more and more people explore alternative, clean energy and cost savings in Illinois, more companies are also looking to take advantage.
An Elk Grove village man said he signed a contract with a company to have solar panels set up on his houses—but the farthest the work ever made it was to have bars attached to his roof to hold panels that never went up. He is out thousands of dollars.
It also happens that the company was on a list specifically provided by the state.
Ray Covarrubias cringes every time he pulls up his driveway and looks at his roof, with those bars that serve no purpose now.
"They screwed into the roof – you know, through the shingles and everything," Covarrubias said. "We have these rails on our houses that basically damaged our roofs."
Covarrubias is out more than $40,000 in what he calls a solar scam, as are his family members. Altogether, the family is out more than $100,000.
It all started with a knock on the door in October and a pitch—save money, save energy, go solar.
"It just made sense at that time for me to go ahead and, you know, consider going solar," Covarrubias said.
Covarrubias said once he was sold on the idea, things seemed to progress quickly. That was until he cut checks after rails were installed on his roof in December.
"At that point, you know, our contract said that the remaining balance of the cost of the project was due—and we ended up paying cash for that whole project," Covarrubias said.
The money was sent to PSG Energy.
"We handed them checks for all three properties for over $100,000, and they never came back," said Covarrubias.
CBS 2 found PSG Energy is not a registered company in Illinois, and has not been since 2022. This was confirmed by the Illinois Secretary of State's office.
But PSG Energy was listed by the State of Illinois as a designated solar vendor through the Illinois Shines Program. CBS 2 reached the state about that, and Covarrubias said he did the same once it was clear he wasn't getting what he paid for.
By then, he had already filed a police report and complaint with the Illinois Attorney General's office.
"After many, many hours talking to all these agencies and departments, we really got nowhere," said Covarrubias.
A spokesperson for the Illinois Power Agency confirmed they have received complaints about PSG, and issued them notices of potential violations:
"The Illinois Power Agency takes consumer protection very seriously and works diligently to ensure positive experiences for Illinois residents and businesses seeking to go solar. Based on the 3 complaints received, the Program Administrator issued two Notices of Potential Violation (NOPVs) to PSG LMTD, a registered Designee with the Illinois Shines Program, and included 02 Boo Inc., an unregistered entity, on the second NOPV, and neither responded to the Notices. The first NOPV was issued on February 26, 2024, to PSG LMTD, and the second NOPV was issued to both PSG LMTD (and 02 Boo Inc.) on March 21, 2024. These NOPVs were issued by the Program Administrator for failing to comply with state law, misrepresenting its affiliations and/or identity, failing to register as a Designees with the Program under its d/b/a, and performing distributed generation installations without being properly certified by the Illinois Commerce Commission. As outlined in the Program's Consumer Protection Handbook, we take swift action against firms who are non-compliant with our consumer protection requirements. On Friday, May 10, 2024, the Program Administrator issued a Warning Letter to PSG LMTD (and 02 Boo Inc.) for violating Program requirements regarding responsiveness to the Program Administrator, Approved Vendor/Designee registration, requirements surrounding required certification for distributed generation system installations, business registration in Illinois, and misrepresentation of affiliation. Should the entities not respond, the next step will be a suspension of both entities from the Program.
"We are frustrated by this situation and feel terribly for the customers who have been negatively impacted by PSG LTMD's deceitful business practices. We are working diligently to investigate and take necessary actions against PSG LMTD. Based on complaint rates observed through the program and customer feedback, Illinoisans should know that PSG LTMD's conduct is not indicative of the standard customer experience when purchasing and installing a new solar project. The program has successfully processed over 45,000 new project applications since 2022, and solar energy has saved Illinoisans millions of dollars since the launch of Illinois Shines in 2019."
The power agency issued this redacted warning letter issued against PSG this past Friday for violations.
The Illinois Power Agency also explained that it has separate lists for approved vendors – which submit project applications to the Illinois Shines solar energy incentive program and directly receive program incentives – and designees, which play other roles such as sales, marketing and installation, and do not receive incentive payments from the program. PSG has only appeared on the designees list.
As indicated in the state's statement, PSG Energy is now 02 Energy.
"The owner of PSG Energy is the same person registered as the owner of 02 Energy," Covarrubias said.
Covarrubias got a letter after he was notified PSG no longer existed. The letter terminated his contract with the company.
But what about the money he was out?
"I don't have it," Covarrubias said.
CBS 2 has confirmed O2 Energy also is not registered to do business in Illinois. While the company claims to be accredited by the Better Business Bureau, a spokesperson says it is not.
Covarrubias and his family filed a civil suit against everyone involved. They are hoping to recoup some of their money—but Covarrubias said that is not why he sat down with CBS 2 to talk about the issue.
"I spoke to somebody from the Illinois Shines program," he said.
He hopes not only to save someone else's wallet - and roof for that matter - but to call for more at the state level to prevent scenarios like that which happened to him.
"The state just needs to have a way of monitoring all the new solar companies that are, you know, popping up," Covarrubias said.
CBS 2 first reached out to PSG Energy and 02 Energy last Thursday. Late Monday afternoon, the chief executive officer of the company, Michael Bonelli, said in part that PSG shut down several months ago—and plans to cease operations in the Midwest permanently while making clients whole.
The full statement is as follows:
"PSG Energy closed its doors in December of 2023 due to business failures and economic hardship. It has been the intention of my leadership, legal team, and I to rebrand the company while working through a chapter 11 bankruptcy to repay tradeline & other debts. Our proposed action plan in January was that the acquisition by the new entity (rebranding) and potential outside investments would help navigate through some of the hardships. This path failed for many reasons and caused even deeper economic hardships.
"Our goal at this point is to make our clients whole and cease operations in the Midwest markets permanently. Neither PSG Energy nor 02 Energy are actively marketing or operating in the state of IL except for servicing outstanding client obligations by way of subcontractors. Additionally, we're working with municipalities and state governments meet regulatory and compliance requirements in terms of business licensing, etc.
"Neither PSG Energy, nor the rebranded 02 Energy have any intentions of evading responsibility for outstanding obligations to customers. We've worked (and continue to work) with our lending partner Solar Mosaic who issues loans for these projects, and they have agreed to cancel the vast majority of the customers' loans who have incomplete of not-started installations. We've also been communicative with cash-paying clients in that they will receive refunds of deposits and owed monies over the next several months while reconciliation plans are made.
"PSG Energy recognizes and acknowledges the inconveniences these last few clients are facing and apologize that meeting these outstanding obligations have been delayed. We want to assure them that we promise to uphold these commitments and make them whole in the months to come."
Meanwhile, below is a full breakdown of questions CBS 2 had for the Illinois Power Agency issued this document with complete answers to CBS 2's questions:
Illinois Power Agency: CBS Q&A by Adam Harrington on Scribd