What is Solar Panel Fraud and What Can You Do About It?

Solar panel fraud has become a growing concern in the United States, leaving many homeowners stuck with hidden fees, inflated energy bills, and contracts they never fully understood. As more families consider solar energy improvements, dishonest companies exploit the fine print in solar panel contracts, using aggressive sales tactics to pressure people into signing quickly. In fact, the rate of complaints has climbed steadily, showing how consumer harms are keeping pace with the industry’s rapid expansion.

Fraud often starts with a sales representative promising major savings on energy costs, a federal tax credit, or even a limited time government-backed solar program. However, once the upfront costs and monthly payments appear on your utility bill, you may realize the offer was a bad deal from the start. Some schemes involve collecting your social security number or contact information under the pretense of qualifying for solar incentives, while others hide long-term obligations inside a power purchase agreement.

This article will highlight the red flags of fraudulent solar programs and teach you how to protect your personal information, compare offers from different companies, and ensure you’re only working with a reputable company before moving forward with solar energy improvements.

If you’re already involved with a predatory solar company, contact Prevost Law Firm to get a no-cost claim review.

What is solar panel fraud?

Solar panel fraud occurs when unscrupulous companies or individuals deceive homeowners through misleading sales practices, hidden fees, and false promises about solar energy systems. These deceptive practices have multiplied as the residential solar energy industry has expanded significantly over the past decade. Unlike honest businesses that provide transparent information about costs and benefits, fraudulent solar companies deliberately mislead consumers to maximize profits.

How solar scams differ from honest mistakes

The distinction between solar scams and honest mistakes lies in intent and pattern. Honest solar companies might occasionally make errors in installation or savings estimates. However, solar fraud involves deliberate deception through systematic practices designed to exploit consumers.

Fraudulent solar panel companies typically employ several recognizable tactics:

• Misrepresentation of financing terms by manipulating agreements to appear more favorable while withholding key details
• False claims about government programs by claiming solar installations are free or government-endorsed
• Forged documents and contracts where salespeople create unauthorized emails and forge signatures
• Inflated promises about savings with unrealistic claims about elimination of electric bills

In contrast, legitimate solar companies help consumers make informed decisions about whether solar energy is right for them. They provide clear information about costs, savings, and financing options without resorting to high-pressure sales tactics or misleading claims.

Why solar fraud is rising with industry growth

As complaints against solar companies mount, state attorneys general are getting increasingly involved. The rapid growth of the solar industry has unfortunately created fertile ground for solar panel fraud. Consumer complaints containing the word “solar” increased four-fold over just a few years according to the Federal Trade Commission.

Several factors contribute to this troubling trend:

First, the expanding market has attracted bad actors looking to capitalize on consumers’ interest in clean energy. Moreover, some national residential solar companies have shifted their focus to closing deals rather than ensuring customer satisfaction.

Additionally, the complexity of solar financing and tax incentives creates opportunities for deception. The Consumer Financial Protection Bureau recently warned solar customers about hidden fees and misleading statements about financial benefits. These fees can add as much as 30 percent to the total cost of a solar panel system.

Perhaps most concerning, certain demographics face heightened vulnerability. Many fraudulent practices specifically target elderly homeowners and people who are not native English speakers.

Government Response

Federal agencies are stepping up protections for solar consumers. In August 2024, the Treasury Department, CFPB, and FTC launched a joint initiative to warn homeowners about deceptive solar sales tactics and direct them to official complaint channels (Time). The FTC’s Impersonation Rule, effective April 2024, also makes it illegal to pose as or claim endorsement by government agencies, with early enforcement actions already shutting down scam operations (FTC).

Despite these protection efforts, complaints continue to rise faster than the industry’s growth rate. This underscores the importance of understanding how to identify and avoid solar panel scams before making any solar energy investment.

Types of solar panel scams to watch for

The solar industry’s growth has unfortunately created the perfect environment for scammers to exploit homeowners seeking clean energy solutions. Consequently, understanding the different types of solar panel fraud can help you protect yourself from these deceptive practices.

Sales scams: misleading offers and pressure tactics

Fraudulent solar companies often use high-pressure sales tactics to rush you into signing contracts without proper review. Generally, these scammers claim to represent the government or your utility company, promising “free solar panels” through non-existent government programs. One major red flag is when salespeople insist you must “act now” to qualify for a limited-time government rebate or special rate.

Beware of door-to-door solar scam artists who:

• Claim affiliations with federal agencies to sound legitimate
• Create a false sense of urgency about “special programs ending soon”
• Promise complete elimination of your electric bills
• Dress or use phrases making them appear as official utility representatives

Financing scams: hidden fees and fake loans

Perhaps the most financially damaging solar panel scams involve deceptive financing arrangements. The Consumer Financial Protection Bureau found that some residential solar lenders build hidden “dealer fees” into loans, often increasing costs by 30% or more above the cash price. These fees are rarely shown to customers, making the interest rate appear artificially low.

Another financing scam involves misleading claims about the federal solar tax credit. Salespeople frequently subtract a projected tax credit from the loan amount, making the price seem lower than what you’re actually borrowing. Later, you face a payment jump after 18 months if you don’t make a payment matching the projected tax credit…whether or not you received it.

Installation scams: unpermitted or incomplete work

Installation scams typically begin with demands for large upfront deposits. In these cases, unscrupulous contractors either disappear with your money or deliver substandard work. Some install panels that aren’t connected properly or never activated. Others use cheap components or hire unqualified installers, creating potential safety hazards.

“Fly-by-night operators can scam an entire neighborhood and leave town before anyone has caught on to their tactics,” notes one industry expert. To protect yourself, always verify that your solar installer is licensed, insured, and properly certified.

Warranty scams: fake or misleading coverage

A growing concern involves warranty fraud where scammers contact homeowners claiming their solar warranty has expired. Essentially, they send text messages with a fake sender ID (like “MCS”) asking you to call a number to renew your warranty. These fraudsters then attempt to sell unnecessary “maintenance packages” or warranty renewals.

In August 2024, the Consumer Financial Protection Bureau issued a nationwide alert about solar panel financing fraud, noting that improper business practices can add as much as 30% in fees to the average solar loan. Given these concerns, obtaining multiple quotes from reputable solar companies becomes your first line of defense against the various solar panel scams targeting unsuspecting homeowners.

Examples of solar fraud

Real-life victims of solar panel fraud often face devastating financial consequences. Throughout the country, countless homeowners have fallen prey to these deceptive practices, with complaints to state agencies skyrocketing by over 500 percent from 2018 to 2023.

The case of forged contracts and fake emails

One disturbing trend involves salespeople creating fake email accounts to process electronic contracts without proper consent. For instance, 91-year-old Emanuel Minto discovered his signature had been forged onto an electronic contract for a solar panel system. The salesperson created an email address that Minto never used, saying, “This is your email address and this is your password”. Minto’s granddaughter later found that the only messages in the inbox were from the solar installer and financing company. (Source)

In another case, Connecticut Attorney General William Tong sued SunRun and two smaller companies for deceptive sales practices, including forged signatures and consumer impersonation. The complaint detailed how salespeople signed a household up for a 25-year solar lease even after both a father and daughter explicitly refused the proposal. (Source)

Loan stacking and unauthorized financing

In Nevada, Prevost Law Firm clients Bart and Diana Daniels were left with a $73,590 loan for a solar system that never functioned. The installer, Encor Solar, went bankrupt before completing the project. Despite the system’s failure and the company’s disappearance, their lender continued demanding full payment. Prevost Law Firm intervened, resulting in:

• Full cancellation of the $73,590 loan,
• A refund of the entire $28,493 they’d already paid,
• And, in an exceptional outcome, they were allowed to retain the solar panels at no extra cost.

This victory not only relieved them of crushing debt but also preserved their equity and gave them an opportunity to get a working system installed properly.

The Consumer Financial Protection Bureau (CFPB) found that lenders frequently build hidden “dealer fees” into solar loans, often increasing the cost by 30% or more above the cash price. These fees are rarely disclosed clearly to consumers, artificially lowering the stated annual percentage rate (APR).

Elderly homeowners targeted by door-to-door scams

Senior citizens are especially vulnerable to solar scams, and many calls for help come from their children after discovering the truth. Door-to-door salespeople often claim:

• “It’s a government program for seniors to save money.”
• “The panels are free…you won’t pay a thing.”
• “You’ll never have another electric bill.”

In reality, these promises are deceptive. 

In a case handled by Prevost Law Firm, a daughter uncovered that her elderly mother had been pressured into signing a fraudulent contract. The firm intervened, freeing her mom from thousands in unauthorized solar debt and removing the lien placed on her home.

The Better Business Bureau also warns that many contracts hide surprise charges for items like roofs or A/C units, and liens often go unnoticed until a homeowner tries to sell their property.

How to protect yourself from solar scams

Protecting yourself against solar panel fraud requires vigilance throughout the shopping and installation process. Given the rise in solar scams, taking proactive steps to verify companies and offers is essential before making any commitment.

Get multiple quotes and compare offers

Obtaining at least three quotes from different solar companies provides crucial comparison points for your decision. Throughout this process, you’ll gain valuable insights into pricing variations, equipment quality, and installation approaches. Furthermore, comparing quotes helps you identify outliers that might signal a solar panel scam.

When evaluating offers, examine the cost per watt rather than just the total price, as system sizes often vary between proposals. Legitimate solar installers welcome your research and encourage informed decisions, whereas unscrupulous companies often discourage comparison shopping.

Ask for permits and verify contractor licenses

Before signing any agreement, verify that your solar installer holds proper licensing and certification. Therefore, check your state’s contractor licensing board to confirm credentials. Unlicensed contractors might not only deliver substandard work but could also leave you financially liable for workplace accidents or property damage.

Reputable solar panel companies will always pull necessary permits for installation. Indeed, any installer avoiding permit requirements is a major red flag that should prompt immediate concern.

Understand your contract before signing

A solar contract should clearly outline system size, costs, payment schedules, and warranty information. Prior to signing, thoroughly review financing terms, as hidden fees can increase system costs by up to 30%.

Pay close attention to warranty claims information, including who to contact for repairs and how water leaks are handled. Likewise, understand dispute resolution procedures and termination clauses.

Tip: The cash price of your system does not include hidden financing fees. If you’re considering a loan, always ask for the cash price. Comparing it to the financed amount can reveal how much extra you’re really being charged.

Use independent energy audits

Consider getting an independent solar system audit rather than relying solely on information from your installer. These unbiased evaluations can verify that your system performs as promised and identify any discrepancies between expected and actual energy production.

An independent audit typically includes reviewing utility bills, analyzing solar production versus consumption, and examining time-of-use alignment.

Avoid high-pressure sales tactics

Legitimate solar companies give you time to research and make informed decisions without pressure. On the contrary, be wary of salespeople who use urgent language like “limited-time offer” or insist on immediate signatures.

All in-home sales are legally required to include a Right to Cancel form, which gives homeowners a clear, dated document stating their ability to back out of the agreement within a set period (usually three business days). Without this form, the contract may be considered invalid or unenforceable, since the homeowner was not properly informed of their cancellation rights at the time of signing.

High-pressure tactics often include claims that the government requires your utility to install solar, misleading statements about free solar panels through government programs, or assertions that you’ll never pay another electricity bill.

Always remember that taking your time is your right. As a rule, reputable solar companies respect your need to thoroughly evaluate this significant investment.

If you’ve been targeted by solar panel fraud, acting quickly is crucial to protect your finances and legal rights.

Consider a warranty independent of the installer

Consider getting your own private warranty from a company that is local, established, and has a proven track record of honoring claims. Having an independent warranty in place ensures that even if your installer goes out of business, you’ll still have protection for repairs and maintenance.

What to do if you’ve been scammed

Start with legal help

Prevost Law Firm is helping thousands of consumers who fell victim to solar scams. If you’re facing forged signatures, unauthorized loans, hidden dealer fees, non-working systems, or liens from bankrupt installers that left you without a warranty, your first step involves contacting a solar fraud attorney who can fight to cancel payments, remove liens, and potentially recover losses.

Get a no-cost claim review.

File a complaint with the FTC, CFPB, or your State Attorney General

The Federal Trade Commission (FTC), Consumer Financial Protection Bureau (CFPB), and your state Attorney General’s office all investigate solar scams and consumer fraud. To file a complaint:

• Visit ReportFraud.ftc.gov, consumerfinance.gov/complaint, or your state AG’s website
• Provide detailed information about the company and fraudulent practices
• Include contracts, emails, and financial documents
• Follow up regularly on your case

Know your legal protections

Federal laws such as the Truth in Lending Act and the Home Ownership and Equity Protection Act safeguard consumers, while many states also regulate door-to-door sales and require clear contract disclosures for solar systems.

Conclusion

Solar panel fraud undermines trust in renewable energy and causes significant financial damage to homeowners across the country. Because scammers often rely on high-pressure sales tactics and misleading claims about solar incentives, many people discover too late that their solar panel contract locks them into a bad deal. As a result, energy bills rise, credit unions flag unexpected loans, and families face financial stress instead of promised cost savings.

Therefore, vigilance is your strongest defense. Always ask detailed questions about tax rebates, upfront costs, and ownership terms before signing any solar panel contract. Additionally, verify credentials, review the fine print carefully, and never share personal information such as your social security number with an unverified sales representative. Legitimate companies give you time to evaluate options and provide transparency about how a solar energy system will affect your utility bill.

If you’ve already experienced solar fraud, swift action is essential. 

At Prevost Law Firm, we focus exclusively on protecting homeowners from deceptive solar contracts. With more than 30 years of consumer protection experience, Neal Prevost is ready to fight back against fraudulent practices and help you pursue justice.

Contact Prevost Law Firm today to learn your options and take the first step toward restoring your financial security.

FAQs

How can I protect myself from solar panel scams?

To protect yourself, get multiple quotes from licensed contractors, avoid high-pressure sales tactics, thoroughly review contracts before signing, and consider getting an independent energy audit. Be wary of offers that seem too good to be true, such as promises of free solar systems or complete elimination of electric bills.

What are some common types of solar panel fraud?

Common types of solar panel fraud include sales scams with misleading offers, financing scams with hidden fees, installation scams involving unpermitted or incomplete work, and warranty scams with fake coverage. Be especially cautious of door-to-door salespeople making unrealistic promises or claiming government affiliations.

Why has solar panel fraud increased in recent years?

Solar panel fraud has increased due to the rapid growth of the solar industry, which has attracted unscrupulous actors. The complexity of solar financing and tax incentives creates opportunities for deception, and certain demographics, like elderly homeowners, are particularly vulnerable to these scams.

What should I do if I’ve been a victim of solar panel fraud?

If you’ve been scammed, file a complaint with the Federal Trade Commission (FTC) or Consumer Financial Protection Bureau (CFPB). Consider contacting a solar panel fraud attorney, especially if you’ve experienced unauthorized loans or forged contracts. Dispute any unauthorized charges or contracts with the solar company and financial institutions involved.

Are there any red flags to watch out for when considering solar panel installation?

Red flags include high-pressure sales tactics, promises of “free” solar panels, claims of government affiliation, demands for large upfront deposits, and reluctance to provide proper licensing or permit information. Be cautious of salespeople who discourage you from getting multiple quotes or rush you into signing contracts without proper review.