7 Warning Signs You May Have Been Misled Into a Solar Contract

What are the warning signs of solar contract scams?

The warning signs of solar contract scams are specific because regulators have written them down: a loan bigger than the system’s cash price, a tax credit subtracted before anyone checked your taxes, a payment that jumps around the 18th or 19th month, a “government program” pitch, savings sold as certain, tablet signing, and a contract in a different language from the pitch. Each sign below comes from CFPB, Treasury or FTC text and state attorney general cases, with what to check in your own documents. Spotting one means your paperwork deserves a careful read; it does not prove you were defrauded.

A disappointing system and a deceptive sale are different problems. Panels can underproduce because of shade or a failed inverter, and an installer can do poor work without anyone lying to you; those are warranty and workmanship questions. Misrepresentation is a gap between what you were told and what you signed. Where a sign below cites a pending lawsuit, the facts are a state’s allegations, not findings by a court.

The seven signs, and what to check in your own papers

1. You borrowed more than the system’s cash price

The CFPB found that some lenders’ markups and fees “can increase the loan principal by 30 percent or more above the cash price,” and its 2024 solar report says these fees “typically range from between 10 to 30 percent of the cash price but can exceed 50 percent.” In the CFPB’s example, a $30,000 system carries a $9,000 fee, the loan documents show $39,000, and the lender keeps the $9,000. In a pending case, Minnesota’s attorney general alleges that four solar lenders collected about $35 million in hidden fees, inflating the cost of more than 5,000 solar-panel systems.

Check your documents: find the cash price, meaning what the installer charges a customer who pays without a loan, and compare it with the “Amount Financed” in your loan’s Truth in Lending disclosure. If your contract shows only one price and it matches the loan, ask the installer in writing for its cash price for the same system. Michigan’s attorney general alleges that Climax Solar charged financed customers more than cash customers without telling them. The dealer fee guide has the arithmetic.

2. A “net cost” built on a tax credit nobody checked

The CFPB described a “common solar lending industry practice” of printing the actual loan principal “in a small, light font” and a “net system cost,” the loan minus a presumed 30 percent credit, “in a large, bright font.” Treasury warns against anyone who says tax credits will cut the cost of panels “without confirming your eligibility.” The credit was nonrefundable and went only to the system’s owner; Treasury’s lease guide says of that pitch, “With a lease, you don’t own the system, so that claim is a lie.” New York’s attorney general alleges that one installer’s customers often did not qualify for the credits in the amounts it claimed.

Check your documents: compare any “net cost” figure in the proposal with the Amount Financed in your loan, and keep the proposal if the smaller number was presented as your price. Then find the date installation was completed. The IRS says the residential clean energy credit “is not available for any property placed in service after December 31, 2025,” so a 2026 installation priced around that credit was priced around money you cannot claim.

3. A low payment that rises around the 18th or 19th month

The CFPB found it “commonplace” for solar-specific loans to “re-amortize at a higher monthly payment amount at the 19th month of the loan term” unless the borrower makes a substantial prepayment first, often 30 percent of the principal, sized to the expected credit. Ohio’s attorney general alleges that one installer connected buyers with lenders whose loans “led to increased payments after 18 months” unless they made a so-called voluntary payment of about 30 percent.

Check your documents: Regulation Z requires the Truth in Lending disclosure to show “the number, amounts, and timing of payments scheduled to repay the obligation.” Look for a second, higher payment in that schedule and for prepayment language in the loan agreement. If the salesperson quoted only the first payment, keep any proposal or text that shows it.

4. “Government program,” “free panels,” or a rebate check in the mail

The FTC says “‘free’ or ‘no cost’ solar panel offers are scams” and that “the federal government does not install solar systems in homes for free.” Treasury lists pitches built on “This is a government program” and promises “that the government will send you a tax rebate check in the mail” as scam signs. New York’s attorney general alleges that one installer’s salespeople told homeowners that government “incentives” and “programs” would cover the cost of their installations.

Check your documents: read who is named as seller, lender and any lessor. If the pitch used the words “program,” “free” or “government” and every party on the paperwork is a private company, keep the flyer, door hanger, ad or text that said it. That marketing is evidence of what you were told.

5. Savings presented as certain, with a loan that says performance doesn’t matter

The CFPB’s 2024 report says “there is no guarantee that a solar loan will pay for itself” and that some installers “overestimate the amount of electricity that solar panels will produce,” and it observes that “some solar loan agreements note that the consumer’s financial obligation does not depend on the system’s performance.” Michigan’s attorney general alleges that Climax Solar’s representatives promised homeowners they could “replace or greatly reduce their utility bills with affordable solar payments.”

Check your documents: find the proposal’s savings figure and its assumptions, such as the yearly rate increase and the usage it used. Search the loan agreement for a sentence saying your obligation doesn’t depend on performance, and lay a year of utility bills next to the proposal. A shortfall from shade or an outage is a technical problem; a savings promise that left out the loan payment, or a production figure with no basis, is covered on our page about a salesperson who lied about savings.

6. Signing on the seller’s tablet without seeing the whole agreement

Treasury tells buyers to “be careful when you sign anything on the seller’s computer or tablet,” because “that’s what scammers ask you to do when they’re hiding the details.” The FTC says that if someone “insists you sign an agreement on an electronic tablet without showing you the full agreement, stop.” Regulation Z’s official commentary says it is not enough for a lender “merely to show the consumer the document containing the disclosures”; the borrower “must be free to take possession of and review the document in its entirety before signing.” New York’s attorney general alleges that salespeople told homeowners they were “merely signing application or credit-check forms.”

Check your documents: list every document you have and every one you never received: the installation contract, the loan agreement, the Truth in Lending disclosure and any notice of cancellation. Ask the lender in writing for the electronic signature records showing when each was signed. If you never agreed to a loan at all, read our page on unauthorized solar loans and forged signatures.

7. A pitch in your language and a contract in another

The CFPB noted reports of salespeople pitching consumers with limited English proficiency in their preferred language while “providing the solar purchase contract only in English.” Treasury lists “documents or contracts provided in languages different from the language used in the sales pitch” as a scam sign. For door-to-door sales covered by the FTC’s Cooling-Off Rule, the seller must hand you a contract or receipt “in the same language, e.g., Spanish, as that principally used in the oral sales presentation.”

Check your documents: note the language of each document and the language the salesperson spoke. A contract and cancellation notice in a language you don’t read well is evidence, so keep every page.

What turns a warning sign into a claim?

A warning sign becomes a claim when documents back it up: proof of what you were told, proof of what you signed, and a law that covers the difference. Which law applies depends on your contract type and your state. Save the proposal, ads, texts, emails, financing disclosures and every version of the contract, and write down what the salesperson said while you remember it. An attorney needs that file to tell a claim from a bad deal.

What should you do if you recognize your contract?

Work through these in order.

1. See whether a cancellation window is still open. If you signed recently, cancel in writing now, by the method your contract and your state’s law require, and send a copy to the lender the same day. The FTC’s Cooling-Off Rule generally covers a solar sale made at your home and gives three business days, with Saturdays counted. State windows vary and some are longer. Check the state law table and count your days with the deadline tool.

2. Identify your contract and every company on it. Your papers show whether you have a cash purchase, loan, lease, PPA or PACE financing, and they name the installer, lender, loan servicer and warranty provider, which can be four different companies.

3. Ask in writing, and complain for free. Write to the installer or the lender, say exactly what you want fixed, and ask for the answer in writing. For a system you bought, the FTC’s advice is direct: “If you have a problem with a system you bought, try to resolve it with the company first.” If that fails, it says to report it at ReportFraud.ftc.gov and to your state attorney general. Treasury, the CFPB and the FTC jointly “encourage consumers that believe they have been a victim of unfair or deceptive practices to file a complaint with CFPB, FTC, or their relevant state consumer protection office.” File loan problems with the CFPB, lease and PPA problems with your attorney general, and installer problems with your state contractor licensing board.

Disclosure: Candid Yak works with Titan Advocacy Group, a solar consumer advocacy firm, and may be paid when readers hire it.

4. If they refuse, get a free case review. When the company says no and your documents show a gap between what you were promised and what you signed, a free case review from an attorney-backed firm is the next step. A firm that offers a free case review and deserves your file:

• reads your contracts and disclosures before quoting anything, and says so if a cancellation window, written request or complaint is still open to you;
• names the attorney licensed in your state who will handle your file, so you can look that lawyer up with the state bar;
• puts its fee in writing before you pay, including what happens to the fee if the lender refuses;
• never tells you to stop paying your loan, lease or PPA;
• promises no particular outcome and claims no connection to your installer or lender.

5. Other routes. A loan can be paid off or refinanced, though a refinance carries any dealer fee already in the balance into the new loan; compare consolidation loans with your current rate first. A lease or PPA may allow a buyout or a transfer at sale on your contract’s terms. Keep paying while any dispute is open.

Disclosure: Candid Yak works with Titan Advocacy Group, a solar consumer advocacy firm, and may be paid when readers hire it. This page’s author, Kira Fairbank, is a manager at Vacation Ownership Consultants, a timeshare exit firm.

This is general information, not legal advice. The pending cases described here are allegations, and whether any of these signs gives you a claim turns on your contract, your dates and your state’s law, so put your documents in front of an attorney licensed in your state before you send a notice, sign a release, or change any payment.