This Solar Startup Spent Big, Then Left Customers In Limbo

Ali Amhaz left Las Vegas on his black Honda motorcycle and rode for Utah. He wanted his $28,000 back.

A month earlier he’d signed up with Legend Solar to put some panels on the roof of his house.

But Amhaz found some unsettling online reviews after making his deposit. He canceled in time to qualify for a full refund. He said he was promised a check that never arrived, and no one at Legend Solar could tell him why.

So, after unsuccessful phone calls, he hopped on his bike and drove a hundred miles through the desert last November in search of answers at the company’s St. George, Utah, headquarters.

“Lights are shut off, there’s barely anybody there,” said Amhaz, a contractor who lived in Banks, Oregon, before relocating to Las Vegas.

He eventually sat down with two managers. He told them he wasn’t leaving without a check. So they handwrote him one.

It bounced. Amhaz kept trying to cash it, but it kept bouncing.

“Non-sufficient funds, non-sufficient funds. It got to the point where the bank probably thought I was trying to do some fraud stuff,” he said.

By mid-February of this year, Amhaz was still unpaid. He filed a claim with the Nevada State Contractors Board. It was eventually referred for criminal prosecution.

“Seeing how big they actually are, I never thought this would happen,” Amhaz said.

An EarthFix investigation has confirmed as many as two dozen customers in Oregon now find themselves in a similar situation: trying to reclaim what Legend Solar promised. There could be over a hundred more across Nevada and Utah, according to customers and employees of Legend Solar.

Legend Solar was once a rising star in the green energy sector. It offered top-flight solar panels, guarantees on power production and quality service. The company started in 2011 and five years later had more than 100 employees, revenues nearing $30 million and expansion plans across the West.

But the company is now at risk of collapse, leaving many of its customers in limbo after they paid deposits on solar panels that never arrived or paid for warranties on equipment they now can’t get serviced, according to interviews with two dozen Legend Solar customers, former employees and business partners. The bill for unfilled orders could be as high as $2 million, according to a former finance director at the company.

As money problems set in, installations lagged. The company began using new customers’ deposits to pay existing bills, the former employees claimed. That left some customers saying they felt like victims in a Ponzi scheme.

“It’s hard to have sympathy when someone knew about an issue and they just let it go for like a year or more,” said Andrew Bailey, who worked as a rooftop installer in Oregon and claims the company owes him and his wife $8,400. “And everyone else had to suffer. It’s hard to understand how they could even get to that point and not realize the damage they were going to do.”

Complaints against Legend Solar are drawing attention. In Oregon, the company’s license has been revoked. The state’s contracting board has begun an investigation into the company. The Oregon Solar Energy Industries Association also plans to open an ethics investigation. Both the Oregon Bureau of Labor and Industries and the Nevada Labor Commission are investigating wage complaints against the company.

In Nevada, Legend Solar’s contractor license was revoked in August 2017 after the company failed to show evidence of financial responsibility. But the company continued to sell solar arrays in the months that followed. Based on those sales, three complaints against Legend Solar in Nevada have been referred for criminal prosecution. The state is seeking $65,000 in restitution.

SunPower, the maker of the solar panels Legend Solar sells, severed ties with Legend Solar at the end of February.

“We rely on our network of dealers to conduct themselves with honesty and integrity consistent with SunPower’s reputation as an industry leader and treat customers honestly and professionally,” SunPower spokeswoman Rachel Horton said regarding Legend Solar.

Boom Times For Solar

Rooftop solar has been booming. In the last decade, the solar industry grew nearly 70 percent each year. Rooftop solar panels are now more affordable — more so with clean energy tax credits — and solar's increased adoption has lowered energy bills and shifted reliance toward cleaner energy.

But as a boom-bust industry, solar is also one fraught with risk for young companies. Many in the industry have seen companies rise up and flame out. And as solar companies tally record sales, three different national consumer watchdogs have told government regulators they offer too few protections for consumers making long-term investments — often of $20,000 or more. They say that allows deceptive marketing and harmful contracts to persist, sowing distrust in a promising industry many see as crucial to a clean energy future.

Legend Solar has acknowledged cash flow problems in its communication with customers. Reached by phone, Legend Solar founder and co-owner Shaun Alldredge said all its customers will receive their solar installations as promised.

“There’s not really much of a story here. I mean, maybe there is a story that this company is making sure we follow through and everybody gets what they were supposed to get. There’s your story,” Alldredge said.

He dismissed allegations of financial mismanagement and claims that customers were left without equipment for their deposits.

“You’ve got a lot of people that do not have the information to even be telling you things like that. They don’t even know what in the hell they’re talking about. No, there is no Ponzi scheme,” Alldredge said.

Alldredge declined to answer further questions and hung up.

Alldredge and co-owner Shane Perkins did not respond to further requests for interviews or questions sent by email and certified mail.

Ryan Evans, director of the Utah Solar Energy Association, defended the company. He said he’s hopeful Legend Solar will choose to stay in business.

Timeline: Legend Solar's Rise And Fall 

“They’ve been a solid operator in this state for a long time,” Evans said of Legend Solar. “They have done a lot of high-profile community giving, whether it’s working with universities or nonprofits. I know them to be a good company, and it would be my hope they have every intention of fulfilling on their obligations.”

Customers In Limbo

Facing a potential black eye for the solar industry, two companies in Oregon have chosen to do something unheard of in most business sectors: finish a competitor’s jobs at a loss.

They did so at the request of the Oregon Solar Energy Industries Association and the Energy Trust of Oregon, a nonprofit that helps customers benefit from renewable and efficient energy.

Both companies expect to lose money in the process. But in doing so, they hope to retain trust in solar and ensure further growth in the industry. Outside Oregon, the solar panel company SunPower is helping customers pursue installations or refunds.

In Monmouth, Oregon, David Matis has a house wired for solar and a pile of panels waiting to be installed. His project was scheduled to finish in late 2017 before he stopped hearing back from Legend Solar.

“I would have been producing electricity,” Matis said. “It’s costing me that. But the frustration level is what’s beyond belief. Not to receive calls from people who are intimately involved with the running of the company, as one of their customers, is just to me unconscionable.”

In Gresham, Oregon, John Gobble has a rack on his roof but no panels. He paid Legend Solar $17,000 but couldn’t get the company to tell him when the installation would be completed. Twice he dropped in on the company’s office in Clackamas, Oregon, seeking answers and getting none.

“We pay half, initially. And then, if they use that money up to install somebody else, you get ready to install yours and they don’t have the money,” Gobble said. “It’s like a Ponzi scheme — one pays another, pays another. Obviously they didn’t have enough money to catch up with everything.”

The two local companies now taking on these jobs, Elemental Energy and A&R Solar, are racing to get homes equipped and inspected by the end of March. Oregon’s state tax credit for solar power is expiring, a fact that prompted many customers initially to sign up for solar. If they don’t make the March 31 deadline, they’ll miss out on tax credits worth between $5,000 and $6,000.

“We want to keep the atmosphere around solar positive,” John Grieser of Elemental Energy said. “Basically just change the outcome of the story, instead of leaving these 25 customers stranded and maybe raising some concern that people should be hesitant when they select a solar contractor.”

It didn’t work for Portland resident Emily Doughten. She just wants her money back. She paid Legend Solar over $13,000 with nothing to show. She tried to cancel but received only information about the plan for a new installer to take over her contract. She’s still searching for how to get her money back.

Doughten said she’s done with solar.

“Priorities have shifted for me,” she said. She’s now paying for school. “Also it’s just been messy and it’s a large chunk of money so it’s making me a little gun-shy.”

Legend In The Making

Legend Solar once sought to be a leading solar installer across the West. For a time, it was well on its way.

Alldredge, 36, and Perkins, 39, went into business together after meeting at a DISH Network call center where they both worked. They first tried home security sales. Then they founded Legend Solar in 2011.

Their solar startup grew fast. In 2015, they reported 400 percent growth with revenue jumping from $3.7 million to $18.3 million, according to Utah Business. Perkins and Alldredge were featured in Crain's Las Vegas and the Utah Business "Forty under 40" list.

By 2016, the company had become licensed in Idaho, Montana, Wyoming, Arizona, Washington, Nevada and Oregon.

Last year it ranked 27th on Inc. Magazine's "Inc. 5000" list of the country's fastest-growing companies, with 9,000 percent growth over three years and annual revenue near $30 million, according to Inc.

"Companies with that kind of growth either drive over a cliff at full speed, or they take off," Jed Alldredge, Legend Solar president and owner Shaun Alldredge's father, said in a 2016 company blog post.

Legend Solar hit the cliff.

All that growth was masking instability. The company now faces mounting debts in the midst of what it calls "an extreme cash flow problem." Legend Solar has shrunk from more than 100 employees to fewer than five.

At least nine former employees claim the company owes them back wages. Their claims are worth hundreds of thousands of dollars in total.

Legend Solar could owe customers as much as $2 million for deposits made on undelivered solar systems, according to Adam Parr, who worked as vice president of finance for Legend Solar. He based that estimate on the number of customers awaiting installation when he left the company in August, the average cost of solar and the average down payment customers made.

Parr joined Legend Solar in 2014. Previously he'd learned about finance during a stint in the Army, which included a deployment to Afghanistan. After three years at Legend Solar, he was moved out of finance into logistics for questioning the owners’ financial decisions and later fired in August 2017, he said, after warning vendors of the company’s cash flow problems. EarthFix was unable to confirm this. Parr now works as finance director for another solar company in Utah.

Parr said financial records from his time at Legend Solar show the amount owed to vendors is several times the amount owed to customers. Three different employees said the company owes millions of dollars to SunPower.

Utah court records show 15 different state tax liens on Legend Solar totaling more than $565,000. Legend Solar also faces lawsuits from a former employee, an electrical vendor, a marketing firm, an investment firm and the owner of a building it leased, according to court records. The total of those claims is more than $3.6 million.

“Still to this day they pitch that they’re this awesome company,” Parr said. “I would be in the corner sucking my thumb crying, rocking back and forth, if I knew I owed that much money to people.”

Legend Solar co-owners Shaun Alldredge, far left, and Shane Perkins, left, present a check signifying their company's $10 million donation to Dixie State University in St. George, Utah.

In January, the company admitted it was facing financial difficulties. In a letter to customers, Legend Solar said it fell victim to market forces beyond its control. In 2017, Utah's largest electricity provider, Rocky Mountain Power, sought to reduce the amount of money it pays rooftop solar customers for the power they generate. That sparked lengthy negotiations that slowed solar sales in Legend Solar's primary market for much of the year.

“The impact on the solar industry in 2017 for Utah was devastating,” the company told customers in the letter.

In addition, the Trump administration announced tariffs on solar panel imports in January, which the company said created uncertainty through the entire industry and hurt business.

The company also acknowledged its own role:

“

Legend Solar management must accept our responsibility for not managing our business in a way that ensured maintenance of our existing and newly-acquired customers as we should have done. To grow from a few employees in Southern Utah to well over 100 employees in three states in five short years has been a learning process for us. Many mistakes have been made. Many lessons have been learned.”

But former employees believe Legend Solar’s problems were less about market or regulatory forces and more about systemic mismanagement. In interviews, 11 former Legend Solar employees from both Oregon and Utah explained exactly how Legend Solar grew too big too fast and spent its way into crisis. Several requested anonymity because of ongoing wage claims or lawsuits against the company.

It began with salaries. According to multiple employees who spent time working at Legend Solar, compensation for top-level staff became too high to sustain.

The company’s vice president of sales, vice president of operations and master electrician each made several hundred thousand dollars annually based on volume sold. The owners’ compensation often matched or exceeded that, according to former staff.

When the company was small, it worked fine. But when sales exploded in 2015 and 2016, so did salaries.

“As the company got bigger they never adjusted those … and it picked up quick,” said Jamie Jones, who worked as an assistant to Adam Parr in the finance department before being laid off in July 2017. Jones is also a relative of Parr’s through marriage.

Jones said she cut weekly paychecks that reached $30,000.

“I would cut these checks and just cry as I handed them to them,” Jones said.

Parr told owners repeatedly that salaries were too high and that paying based on gross revenue — before you’ve accounted for expenses — was risky, he and Jones said.

“They really did want to have an empire,” Parr said. “But the problem was, they just wouldn’t trust the people they put in place to take care of their business. When there was a problem, they wouldn’t listen to them.”

Between 2014 and 2017, as Legend Solar's sales team brought in millions, the company also spent millions on sponsorships and marketing.

Legend Solar staff and Portland Trail Blazers mascot Blaze The Trail Cat mark the opening of Legend Solar's Oregon offices. The company became a sponsor of the Trail Blazers.

It became an official sponsor of the Portland Trail Blazers and the Brigham Young University Cougars. Owners pledged $2 million to a farm and museum complex south of Salt Lake City called Thanksgiving Point.

They pledged $10 million to Dixie State University in St. George, Utah, to sponsor a 10,000-seat football stadium and emblazon it with the Legend Solar logo.

“They would say they’re not making poor investment choices, but at the same time they’re trying to brand their name onto stadiums across Utah when they didn’t have the money to brand their name on stadiums across Utah,” said Jayson Johns, who worked as director of both customer service and accounts receivable at Legend Solar.

As financial problems at the company became apparent to employees over the past two years, many were irked by the owners’ frequent and visible vacations. There were hunting trips to Mexico, Alaska and Canada, a trip to Tahiti and a trip to the Masters golf tournament in Augusta, Georgia.

Legend Solar co-owner Shaun Alldredge poses on a trophy hunting trip to Canada. Several former Legend Solar staff members said employees took issue with the owners' travel.

By 2017, the company was falling behind on its bills and installations began to lag. Employees began getting paid with paper checks instead of direct deposit. Then they weren’t paid at all. Then layoffs began.

“The owners just were idiots,” said Andrew Adams, a former salesmen for the company in Nevada. “I don’t know any other way to say it, they were just idiots. They were signing deals they couldn’t fulfill.”

Legend Solar co-owner Shane Perkins poses on a trophy hunting trip to Mexico. Several former Legend Solar staff members said employees took issue with the owners' travel.

Adams quit after Legend Solar lost its license in Nevada and he realized he’d be selling solar systems the company couldn’t install. He said the company still owes him $20,000 in commissions and a solar power setup he won in a company raffle. Adams now works for another solar company.

“Legend couldn’t install the clients they were selling,” Adams said. “They were just taking the front-end money from the bank and funneling it into the existing clients to try and float what they’d gotten. It just got way out of hand.”

Seven others with knowledge of Legend Solar’s finances or operations provided similar accounts of the company taking payments from newer customers and using them for pre-existing debts.

As unfinished jobs began to pile up with no money to complete them, Jayson Johns, the company’s customer service director, said he and others began executing a new plan to help customers. He started calling them —many were already leery from long delays — to ask for the rest of their payments. Their money was to be kept out of the company’s operating budget and instead used only to purchase and install their equipment.

“I was asking them to instill their trust in me,” Johns said.

But Johns later came to realize the company had other plans for these customers’ money, using it instead to cover different expenses like payroll.

“That took the funding from a ton of customers that they had entrusted in us to purchase the rest of their system and get them installed,” Johns said. “They took that money and it was no longer available for that.”

Johns resigned shortly thereafter, in December.

Concerns Over Vulnerable Consumers

EarthFix first learned of Legend Solar from Vince Patton, a video producer who worked at one of EarthFix's stations, Oregon Public Broadcasting, for eight years and is now retired. Patton made a down payment of more than $13,000. When his installation fell behind schedule and he struggled to get answers from Legend Solar, Patton started to look into the company’s records and realized he wasn’t alone.

Patton then filed a complaint with the Oregon attorney general’s office and won against Legend Solar in small claims court, but has yet to be paid. He also wrote letters to Legend Solar customers in Utah encouraging them to file complaints against the company.

Patton said he’s now decided against solar power for his home. He’s declining the offer from Energy Trust of Oregon for another company to install his panels. The new company couldn’t honor the same warranties or the guaranteed production — Legend Solar promised to pay the difference if the panels underperformed — and, there was no guarantee the panels would be in soon enough to guarantee Patton’s $6,000 state tax credit.

“I have great admiration for what the Energy Trust did. They took Legend’s mess and tried to clean it up,” Patton said. “For me, it was too big a gamble to lose another $6,000.

“I shouldn’t have to gamble. I shouldn’t have to roll the dice on whether solar is going to be feasible for me or not.”

One of the fellow customers with whom Patton connected was Scott Hirschi. Hirschi got his solar system installed. It wasn’t until afterward that trouble began.

In June 2015, Legend Solar completed a gleaming 33-panel installation on Hirschi’s home in Kaysville, Utah, just east of the Great Salt Lake.

Only, it wasn’t 33 panels. The company left off two. Hirschi noticed when the system wasn’t generating the kind of power promised in his contract. That took months to fix, Hirschi said. Then, in December, another piece of equipment failed — the inverter, which converts solar power to a current that can be fed into an electrical grid.

Despite a warranty on his system, Hirschi said he couldn’t get Legend Solar to help.

“I’m sitting here with a $40,000 system that doesn’t work,” Hirschi said. He’s now paying for someone else to repair it. “I can’t tell you how many times I’ve been given the royal runaround.”

Complaints like Hirschi’s of equipment or savings that didn’t meet promises are echoed across many different rooftop solar companies. Nationally, watchdog groups are calling for better regulation of what they say are problematic contracts and deceptive marketing practices in the solar industry.

In 2016, Public Citizen and the National Consumer Law Center pressed federal regulators on solar, urging the Federal Trade Commission and the Consumer Financial Protection Bureau to forbid contracts that prevent customers from suing companies in favor of an arbitration process. Neither agency took action.

Last year, a group called the Campaign For Accountability reviewed more than 1,200 complaints released by the FTC and found "a widespread pattern of apparent fraud and abuse by solar companies."

It also found hundreds of consumer complaints when looking into California, Florida, Texas and Oregon. Two companies — SolarCity and Vivint Solar — generated more than half of all complaints.

“We all support reducing our carbon footprint, and what better way to do that than install solar panels. But because it’s so lightly regulated and it has this great reputation, there’s a lot of bad actors in the industry who get away with some of these bad practices,” said Daniel Stevens, executive director of the Campaign For Accountability.

The group asked Oregon Attorney General Ellen Rosenblum to investigate rooftop solar in Oregon, citing a high number of consumer complaints and singling out SolarCity.

Rosenblum’s office decided not to open an investigation, spokeswoman Kristina Edmunson said.

Meanwhile, industry groups are working to self-police.

In March 2017, after groups began calling on federal regulators and state attorneys general to scrutinize the solar industry, the national Solar Energy Industries Association announced a consumer education and protection campaign.

"SEIA believes passionately that bad actors are not welcome in our industry and encourages states to act when necessary," Thomas P. Kimbis, the organization's vice president and general counsel, wrote at the time.

In Oregon, industry advocates say customers should feel comfortable with the the decision to invest in solar, so long as they are careful: Thoroughly research companies and look for red flags like required down payments of 30 percent or more.

Lizzie Rubado, renewables program strategies manager for Energy Trust of Oregon, said most industries wouldn’t do what solar installers in Oregon have done by taking financial losses to help customers left in the lurch by Legend Solar.

“We believe in the technology. We want to help empower customers to be able to choose solar and we want everybody to have a good experience,” Rubado said. “Solar is still a good investment.”

The Energy Trust of Oregon keeps a list of contractors that have to meet technical, business and insurance requirements in order to offer Energy Trust’s financial incentives, which Rubado said offers another level of protection.

When it set up shop in Oregon, Legend Solar met those qualifications.

Editor's Note: One of the sources for this report was Vince Patton, a former employee of Oregon Public Broadcasting. OPB is one of our EarthFix partner stations. Because of this, we contracted with an outside editor, Alisa Barba, for this story.