How to Avoid a Solar Panel Scam Before It’s Too Late

A solar panel scam traps homeowners in long-term financial and legal headaches, often before they realize what has happened. As solar energy adoption grew, dishonest companies exploited incentives, tax credits, and financing programs. In fact, complaints involving solar panels continue rising nationwide, showing just how widespread these scams became.

Homeowners are often lured by promises of low interest payment plans, government-backed programs, or guaranteed savings on monthly bills.

However, many of these claims are misleading or outright false. 

Because a typical installation costs tens of thousands of dollars, falling for one of these schemes can leave families with overwhelming debt. Moreover, once contracts are signed, it becomes difficult to untangle hidden fees and unfair terms.

This blog helps you understand the most common red flags of solar fraud and how to avoid them.

You’ll also learn what steps to take if you suspect you’ve been misled, including when to seek legal help. 

Why Solar Panel Scams Are on the Rise

The demand for solar energy skyrocketed across America, creating perfect conditions for scammers. Consequently, solar panel scams became increasingly common as more homeowners wanted to reduce energy costs and embrace clean energy systems.

The boom in solar energy and clean energy systems

As residential solar power expands, so does the number of companies competing for your business. This growth unfortunately attracted many bad actors to the industry. Complaints to the Federal Trade Commission containing the word “solar” have surged more than sevenfold in just four years, rising from 630 in 2018 to over 5,300 by 2023. (Source)

Additionally, one-star ratings on Solar Reviews have increased by more than 1,000% since 2018, far outpacing the actual growth in solar installations. 

How bad actors exploit government programs and tax credits for their solar panel scam

Unscrupulous solar companies frequently misrepresent legitimate government incentives to lure customers. For instance, many exaggerate the federal solar tax credit, which currently offers 30% back on solar installations through 2032. Despite this being a genuine program, scammers often fail to mention crucial details. Namely, that the credit is nonrefundable and limited by your tax liability. Furthermore, some companies falsely claim special “limited-time” government programs that don’t actually exist. These deceptive practices particularly target elderly and non-English-speaking homeowners.

The role of misleading ads and so-called officials in a solar panel scam

Social media platforms are breeding grounds for solar panel scams. Many misleading advertisements mimic news articles, often featuring politicians signing legislation. Some scammers even pose as representatives from your utility company or government agencies. Their primary goal? To harvest your personal information through sign-up forms asking if you “qualify” for special programs. 

In reality, many of these ads come from lead generation companies that sell your data to third parties. Door-to-door salespeople compound the problem by using high-pressure tactics, claiming offers will expire within hours.

The rise in solar panel scams shows no signs of slowing down as long as vulnerable homeowners remain unaware of these tactics. Protecting yourself starts with recognizing these deceptive practices.

8 Red Flags That Signal a Solar Panel Scam

Knowing how to spot the warning signs of solar panel scams can save you thousands of dollars. Here are eight critical red flags that signal potential fraud when shopping for solar panel systems.

Being able to spot the warning signs can prevent costly mistakes. Here are eight key red flags to watch for:

1. Promises of free solar panels or zero-cost systems: Remember, nothing is free. Be cautious of lease or PPA offers that suggest you pay nothing upfront.
2. High-pressure tactics and urgent offer: Reputable companies give you time to evaluate. Be wary of anyone rushing you into decisions.
3. Fake endorsements or impersonation of officials: Always verify credentials independently; no legitimate utility or government agency will pressure you this way.
4. Vague or hidden contract details: Carefully review all terms, costs, warranties, and dispute procedures before signing.
5. Large upfront payments: Legitimate installers offer reasonable payment schedules; avoid those demanding big deposits before starting work.
6. Unverified companies with poor or no online presence: Check reviews and verify certification through NABCEP or similar trusted organizations.
7. Unrealistic savings or payment claims: Be skeptical of exaggerated savings promises or misleading zero-down financing terms.
8. Contracts in a different language than the sales pitch: Always review contracts in your preferred language and understand all terms.

How to Protect Yourself Before Signing Anything

Taking proactive steps before signing any solar contract can protect you from potential solar panel scams. By doing your homework first, you can avoid the painful experience of falling victim to bad actors in the solar industry.

Proactive steps before signing a solar contract are key to avoiding scams. 

First, get multiple detailed quotes from different companies. Request itemized breakdowns of costs, materials, installation fees, and ongoing charges to spot misleading claims or suspiciously low bids.

Next, verify the installer’s credibility by checking online reviews across multiple sites and confirming they hold NABCEP certification, ensuring you’re working with a legitimate professional.

Understand your eligibility for federal tax credits and rebates. The 30% residential solar tax credit applies through 2032 but is nonrefundable, so assess your tax liability accordingly. Also, research any available state incentives.

If financing, consult a financial advisor or credit union to determine whether buying or leasing is best for you. 

Finally, use resources from the Department of Energy and Treasury to verify solar incentives and consumer protection information, ensuring you make an informed decision.

What to Do If You’ve Been Scammed

If you’ve fallen victim to a solar panel scam, taking immediate action is crucial. Prevost Law Firm is here to help. 

Our firm has extensive experience in consumer protection law, with a dedicated focus on solar industry disputes, and we have over 30 years of experience fighting for homeowners like you.

Begin your no-cost claim review now.

We’ve successfully helped homeowners begin fighting solar scams. If you’re facing difficulties with a solar company, our seasoned legal team can hold them accountable.

Monitor for Lender Bankruptcies 

When lenders in the solar industry go bankrupt, it can directly affect how your loan is handled and what legal options are available to you. Deadlines for filing claims are often strict, and missing them can mean losing your chance at relief. 

For example, with Mosaic, homeowners have until October 17, 2025, to be included in the bankruptcy process. Keeping track of these timelines is essential to protect your rights and ensure you’re not left behind when critical decisions are made.

Go here to begin your no-cost claim review before approaching deadlines.

Monitor for Installers Going Out Of Business

When solar installers shut down, it often leaves homeowners stranded without warranty support, service, or even a way to finish an unfinished system. 

If your installer closes its doors, you may suddenly find yourself responsible for repairs, replacements, or costs that were supposed to be covered. In many cases, this creates a legal opening to challenge your contract or financing terms. 

Tracking the status of your installer and acting quickly if they disappear gives you a stronger position to protect your investment and pursue relief before problems escalate.

Reports and Complaints

File complaints with the FTC, CFPB, and your state’s attorney general, including details about the company, reps, and misleading claims. State AGs can sometimes void fraudulent contracts, and utilities should also be notified—scammers often pose as partners. We can guide you on how to communicate with these entities and support any legal follow-up.

Protect Your Credit

Place a credit freeze and closely monitor accounts for signs of identity theft.

Warn Others

Post reviews online to alert others and encourage investigations.

At Prevost Law Firm, we understand the devastating impact a solar scam can have on you and your family. We’re committed to fighting back against deceptive practices and helping homeowners regain their peace of mind. If you’ve been misled or scammed, contact us today. Our experienced attorneys will stand with you to protect your rights and seek justice.

Conclusion

Solar panel scams pose a serious risk to homeowners who want to lower energy costs or support clean energy. Therefore, it’s essential to approach every offer with caution. Watch for tactics such as high-pressure sales calls, promises of nonexistent government programs, or offers that seem “too good to be true.” In many cases, these signals reveal companies more interested in exploiting customers than delivering reliable solar systems.

To protect yourself, always compare quotes, verify installer credentials, and review contracts in detail before signing. Additionally, report any suspicious activity to consumer protection agencies, and do not hesitate to seek professional advice if you’ve already entered a questionable agreement. Taking these steps can prevent costly mistakes and help you avoid long-term financial harm.

At Prevost Law Firm, we understand how devastating solar scams can be for families. Our firm focuses exclusively on helping homeowners fight back against deceptive solar contracts. If you believe you’ve been misled by a solar company or financing provider, contact Prevost Law Firm today. With over 30 years of experience in consumer protection law, Neal Prevost is ready to stand up for your rights and help you find a path forward.

Solar Panel Scam FAQs

What are some common red flags that indicate a solar panel scam? 

Common red flags include promises of “free” solar panels, high-pressure sales tactics, fake government endorsements, vague contract details, requests for large upfront payments, and misleading statements about savings or monthly costs.

How can I verify if a solar installer is legitimate? 

Check the company’s reviews on the Better Business Bureau website and verify that installers are certified by the North American Board of Certified Energy Practitioners (NABCEP). Also, research the company’s online presence and ask for detailed quotes and contract information.

Are offers for “free solar panels” legitimate? 

No, offers for completely free solar panels are almost always scams. These typically refer to solar leases or power purchase agreements where you don’t own the system but still pay for electricity. The federal government does not provide free solar panel installations.

Q4. What should I do if I’ve fallen victim to a solar panel scam? 

Report the incident to the Federal Trade Commission and Consumer Financial Protection Bureau. Contact your state attorney general and utility company, seek legal help to review and potentially void fraudulent contracts, monitor your credit, and file complaints on third-party sites to warn others.

How can I protect myself when considering solar panel installation? 

Get detailed quotes from multiple companies, ask questions about ownership and leasing options, verify installer credentials, understand your eligibility for tax credits and rebates, consult financial advisors before financing, and use official resources from the Department of Energy and Department of Treasury for accurate information.