Solar scams usually rely on one of a few lines: “the government pays for it,” “you’ll get a 30% tax credit,” “your bill will disappear,” or “sign today.” Most solar companies are legitimate, but stop the sale if a company won’t give you its legal name and license number, the full contract, a cash price, or time to compare. If you already signed, read the cancellation section today; a home sale may have a three-business-day cancellation window.
Eight solar sales red flags
1. “A government program pays for everything”
The FTC’s September 2024 solar scam alert lists “a government program will cover the whole cost of solar panels” as a scam line. The U.S. Department of Energy says the federal government offers no program for free home solar installations. Some state programs for income-qualified households are real; see what “free solar” usually means.
2. Utility or government impersonation
A logo, badge, vest or caller ID proves nothing. If someone says your utility or a state agency sent them, hang up or close the door and call the number on your bill or the agency’s .gov website.
3. A 30% federal tax credit on a 2026 purchase
The IRS says the homeowner Residential Clean Energy Credit (Section 25D) is not allowed for systems whose installation is completed after December 31, 2025, even if you paid earlier. For a lease or PPA, the company that owns the panels may claim its own business credit; that is the company’s credit, not a discount promised to you. A 2026 loan whose low payment depends on a “30% tax refund” prepayment is a serious warning sign.
4. “You’ll never pay another electric bill”
The FTC lists this promise as a scam line, and the CFPB (August 2024) recorded complaints from consumers told solar would cover the loan and eliminate future bills. Actual savings vary by location and season, the CFPB notes, and many utilities still charge fixed monthly fees plus any power the panels don’t cover. Ask for the production estimate, the assumed yearly rate increase and your utility’s export credit in writing; a refusal is your answer.
5. A monthly payment with no cash price
Ask for the cash price, amount financed, APR, fees, total of payments and any scheduled payment change. The CFPB found fees that raised some solar loan balances by 30% or more above the cash price, and loans that jump to a higher payment around month 19 unless you prepay about 30%.
6. Sign now, pay a big deposit, or lose the deal
The FTC warns about salespeople who rush you, insist you sign on a tablet, or demand a large upfront payment with “big savings if you act fast.” A legitimate company gives you time to read the contract.
7. No license number, or a name that doesn’t match
The marketing company, contractor, lender and service company may all be different. Get each legal name in writing and check the contractor’s license on your state’s lookup. If the number doesn’t match the name on the contract, stop.
8. Verbal promises missing from the contract
Savings, roof repairs, panel upgrades, warranty labor and cancellation promises count only if the signed agreement includes them.
What “free solar” usually means
A “free” or “no-cost” offer is usually one of three things, and each one is paid for over time:
- A lease: a company owns the panels and you pay a monthly fee, which may rise each year.
- A power purchase agreement (PPA): you pay for the electricity the panels produce, per kWh.
- A $0-down loan: you own the system and repay the loan, often with fees built into the balance.
Some state and utility programs do cover most or all of the cost for income-qualified households. DOE’s advice is to confirm the program is listed on a .gov website or call the state office. EcoGen’s free solar panels guide explains these offers state by state, and the low-income solar programs guide covers assistance programs. To compare a lease, PPA or loan, see solar financing options.
A 10-minute check before you continue
- Pause. Don’t give a signature, bank details or Social Security number to “check eligibility” during an unexpected visit or call.
- Write down who you are dealing with. Legal company name, address, license number, and the names of the installer and lender.
- Verify on your own. Look up the license on your state’s contractor-board lookup and confirm the name matches. Contact any named utility or program through its official channel.
- Get the complete documents. Save the proposal, the full contract and the financing disclosure before you sign anything.
- Find the cash price. Compare it with the amount financed and the total of payments.
- Check equipment and scope. Require exact panel, inverter and battery models plus a list of exclusions.
- Get another bid. The FTC recommends comparing quotes from licensed companies. Use these questions to ask before choosing an installer to request specific documents and written commitments.
A red flag is a reason to verify or walk away; it doesn’t by itself prove a crime.
If you already signed
- Get the full signed contract and loan documents now, including any cancellation form you were given.
- Write down the signing date, the place, and how the sale happened (door knock, your kitchen table, a store, online).
- Read the cancellation section and act before the deadline. Cancel in writing, use the method the contract names, and keep proof of mailing or delivery.
- Tell the lender the same day if the deal included financing.
- If the terms don’t match what you were told, write to the contractor and lender and keep copies.
- For a serious dispute, contact your state attorney general or consumer protection office and consider a local consumer attorney or legal aid.
The federal three-day rule for sales at your home
The FTC’s Cooling-Off Rule (16 CFR Part 429, current text checked October 14, 2026) applies to many sales made at your home for $25 or more, or at a temporary location such as a hotel or fairground for $130 or more.
- Deadline: midnight of the third business day after the sale. Business days include Saturdays but not Sundays or federal holidays.
- Example: sign on a Friday, and Saturday is day 1, Monday day 2, Tuesday day 3. You have until midnight Tuesday. If that Monday is a federal holiday, the deadline moves to Wednesday.
- What the seller owes you: a completed cancellation form in two copies, a spoken explanation of your right to cancel, and, after you cancel, a refund within 10 business days and the end of any security interest created by the sale.
- Not covered: deals finalized at the seller’s permanent place of business, sales made entirely online, by mail or by phone, real estate sales, certain emergency repairs, and transactions covered by the federal loan-rescission right below.
If a solar loan is secured by your home, Regulation Z gives you a separate right to rescind it until midnight of the third business day after the latest of signing, receiving the rescission notice, or receiving the required disclosures; if those were never delivered, the right can last up to three years. State laws can give longer or broader cancellation rights. Your contract’s own cancellation section is the first place to check.
If the deadline has passed, a lease or PPA may still have transfer, buyout or early-termination terms; see getting out of a solar lease.
Why is my electric bill still high with solar?
If a salesperson promised a $0 bill, the promise was the problem. Common reasons a bill stays higher than expected:
- Your utility charges fixed monthly fees that solar doesn’t remove.
- Your utility credits exported power at less than the retail rate.
- Your household uses more electricity than when the system was designed, for example after adding an EV or heat pump.
- The system was sized to a sales promise rather than your 12-month usage, or it is producing less than estimated.
Compare monitoring data with the production estimate in your contract. If output is low, contact the installer of record or the company that owns a leased system; the solar panel repair guide covers diagnosis and warranty claims. For rate changes, see why electric rates are going up.
Where to report suspected fraud
- Federal Trade Commission: ReportFraud.ftc.gov
- Consumer Financial Protection Bureau complaint portal, for a solar loan or lender
- Your state attorney general or consumer protection office: find it in USA.gov’s state consumer office directory
- Your state contractor licensing board, for license or workmanship problems
- The real utility or agency, if its name was used
Before the next sales call
A legitimate offer can be identified, checked, compared and read before you sign. Bring the installer interview questions and use the quote comparison checklist to expose missing scope and financing differences.
Sources
- Federal Trade Commission, “Solar energy is rising in popularity, and so are scams”, September 26, 2024. Accessed October 14, 2026.
- 16 CFR Part 429, Cooling-Off Rule (eCFR), current text. Accessed October 14, 2026.
- Federal Trade Commission, “Buyer’s Remorse: The FTC’s Cooling-Off Rule May Help”, updated September 2025. Accessed October 14, 2026.
- Consumer Financial Protection Bureau, Regulation Z §1026.23, Right of rescission. Accessed October 14, 2026.
- Consumer Financial Protection Bureau, “Issue Spotlight: Solar Financing”, August 2024. Accessed October 14, 2026.
- Internal Revenue Service, energy-credit FAQ under Public Law 119-21. Accessed October 14, 2026.
- U.S. Department of Energy, “Free Solar Panels? Don’t Get Burned.”, April 26, 2023 (cited for its free-program statement only; its tax-credit paragraph predates the 2025 law change). Accessed October 14, 2026.
- USA.gov, state consumer protection offices. Accessed October 14, 2026.
