Sean Hephner says only 23 solar panels ever showed up at his Hudson home — and they are still sitting in his yard. He says his roof was never fully hooked up, but the bills kept coming anyway: $100 to $150 a month in summer utility costs and $400 to $600 a month in the winter, on top of a solar loan for a system that never worked. Now Michigan Attorney General Dana Nessel has filed a federal lawsuit alleging his experience was part of a wider scheme that hit roughly 1,700 households across the state.
Hephner told NewsChannel 3 that his experience matches the allegations laid out in the state's complaint, including his discovery that a lien had been placed on his home without his knowledge. He said Climax Solar reported to its financing partner that 27 panels had already been installed on his roof, and that the company lied about the contract to the lender. A second lien followed, he said, after his contract was sold to a new creditor.
A Statewide Complaint Against Lenders, Not Just the Installer
Nessel's lawsuit, filed in July in the U.S. District Court for the Western District of Michigan, names Portage-based Orbit Marketing LLC — doing business as Climax Solar — along with owner Joshua Thompson and eight financing and corporate entities: Enium Capital Group, Sunlight Financial, Cross River Bank, TriBeam Capital (doing business as Concert Finance), Regions Bank (doing business as EnerBank USA), Solar Mosaic, Sunnova Energy International, and Harborstone Credit Union, according to the State of Michigan. The complaint alleges federal violations of the Consumer Financial Protection Act as well as state violations of the Michigan Consumer Protection Act and the Michigan Home Solicitation Sales Act, and it includes claims of common-law fraud and unjust enrichment.
Nessel said consumers were rushed through electronic contracts and financing paperwork in a single visit, and that Climax Solar and its financial partners targeted vulnerable homeowners and left them with broken promises and massive debt. Sales representatives allegedly promised homeowners lower utility bills, federal tax credits, and quick installation, according to the complaint. Once loans were signed, the lawsuit alleges, lenders released funds based on paperwork and project milestones before systems were finished, grid-connected, or utility-approved.
Homeowners Left Holding the Loans
The lawsuit describes the business model as a pitch, sign, fund, fail, and collect operation, per the filing. Customers remained responsible for both their regular utility bills and their solar panel loans even as the company left many systems unfinished, underperforming, unsafe, or never turned on. The complaint alleges customers reported property damage, missing permits, failed inspections, and rising monthly payments, and that Climax and its lenders hid more than $22 million in financing costs inside inflated system prices.
Dealer and platform fees on these loans averaged more than 27% of the amount financed, according to the lawsuit — a markup in line with national patterns flagged by the Consumer Financial Protection Bureau, which found that dealer fees on residential solar loans typically inflate total loan principals by 10% to 40% above a system's cash price while presenting artificially low monthly interest rates. The CFPB has also noted that low-income homeowners face disproportionate risk in these deals, since sales pitches often deduct a projected 30% federal tax credit from loan estimates even though many working-class households lack enough federal tax liability to actually claim it.
A Business Already in Liquidation
Climax Solar is no longer operating. Orbit Marketing LLC filed for Chapter 7 bankruptcy in April 2024, and the U.S. Bankruptcy Court for the Western District of Michigan later converted the case to full Chapter 7 liquidation that August under court-appointed trustee Kelly M. Hagan, per bankruptcy court records. Before shutting down, the Portage-based company employed roughly 100 people and operated under alternate trade names including Climax Electrical Service and Option 1 Genetics, according to the Better Business Bureau.
Because the installer has already liquidated, homeowners cannot get financial relief or system completions directly from the company — which is why the state's lawsuit instead targets the banks and financing firms that funded and serviced the loans. The complaint alleges those companies continued to service, collect on, and enforce solar debts, and in some cases reported defaults to credit bureaus, even after receiving explicit notices of Climax Solar's nonperformance, unpermitted work, signature disputes, and shutdown.
What the State Is Asking Courts to Order
Nessel's office is seeking court orders compelling restitution, loan cancellations or revisions, credit report corrections, civil penalties, and the formal release of Uniform Commercial Code liens placed on homeowners' properties. Unreleased liens like the ones Hephner says appeared on his property can block homeowners from refinancing or selling their homes. The attorney general's office has estimated the scheme involved about $81 million in total financed transactions, while the lawsuit itself alleges the deceptive sales and lending practices targeted at least 1,600 Michigan homeowners.
The attorney general's office says it has received complaints from homeowners in Ada, Battle Creek, Belding, Brooklyn, and Clarksville. The case is still in its early stages, and no court date has been set. It remains an open question whether the named lenders will negotiate a settlement with the state or argue in court that they were passive secondary financiers unaware of Climax's alleged in-home sales misconduct.
How to File a Complaint
Nessel's office says potential Climax Solar victims can still file a complaint with the Michigan Attorney General's Consumer Protection Team. Complaints can be submitted by phone at (517) 335-7599, by mail to P.O. Box 30213 in Lansing, Michigan, or online, according to WTVB. Homeowners who signed up for a Climax Solar installation are also encouraged to check county property records for any undisclosed UCC filings tied to their homes.
