Solar Scams: 10 Red Flags and How to Protect Yourself (2026)

Solar energy is one of the best investments a homeowner can make. But the explosive growth of the residential solar industry has attracted a second wave of participants who are not interested in saving you money -- they are interested in taking it.

Between 2018 and 2023, consumer complaints related to solar installations rose by more than 500%, according to data compiled from the FTC, state attorneys general, and the Better Business Bureau. The problem became serious enough that the FTC, U.S. Treasury, and CFPB jointly published consumer advisories warning homeowners about deceptive practices in the solar industry.

Most solar companies are legitimate. But the bad actors are loud, aggressive, and very good at what they do. One misleading contract can cost you tens of thousands of dollars over 20 years.

This guide covers the 10 most common solar scams in 2026, gives you tools to spot each one, and walks you through how to verify a company before you sign anything.

Table of Contents

1. Scam 1: "Free Solar Panels" Bait-and-Switch
2. Scam 2: Fake Government Affiliation
3. Scam 3: Door-to-Door Pressure Tactics
4. Scam 4: Inflated Savings Projections
5. Scam 5: Hidden Dealer Fees in Solar Loans
6. Scam 6: Referencing the Expired Federal Tax Credit
7. Scam 7: Fake Reviews and Ratings
8. Scam 8: Bait-and-Switch Equipment
9. Scam 9: Automatic Contract Renewal Clauses
10. Scam 10: Selling Your Personal Information
11. How to Verify a Solar Company Before You Sign
12. FTC Tips for Solar Consumers
13. How to File a Complaint
14. FAQ

Scam 1: "Free Solar Panels" Bait-and-Switch

How it works: A company advertises "free solar panels" or "government-funded solar programs" through online ads, mailers, or door-to-door sales. When you sit down to sign, the "free" panels turn out to be a 20-25 year solar lease or power purchase agreement (PPA) with escalating payments, early termination fees, and transfer restrictions that complicate selling your home.

Nothing is free. The company owns the panels, claims the tax benefits (if any remain on the commercial side), and locks you into a long-term contract that may or may not save you money compared to your current utility bill.

How to protect yourself:

• Ask directly: "Who owns the panels?" If the answer is not "you," it is a lease or PPA, not a purchase.
• Demand the total cost over the full contract term in writing, including any annual escalators.
• Compare the total 25-year cost against what you would pay your utility over the same period at a 3-5% annual rate increase.

Scam 2: Fake Government Affiliation

How it works: The sales rep implies -- or outright states -- that they are from "the government," "the utility company," or a "federal solar program." They may reference official-sounding names like the "National Solar Initiative" or the "Residential Clean Energy Office." Some use uniforms or badges designed to look official.

There is no federal program that sends representatives to your home to install solar panels. There is no government-run door-to-door solar enrollment program.

How to protect yourself:

• Ask for a business card and company name. Then stop the conversation, close the door, and verify the company independently.
• If someone claims to be from your utility company, call the utility directly using the number on your bill -- not a number the visitor provides.
• Report impersonation of government officials to the FTC at ReportFraud.ftc.gov.

Scam 3: Door-to-Door Pressure Tactics

How it works: A sales rep appears at your door -- often in the evening or on a weekend -- and pushes hard for an immediate commitment. Common lines include "this pricing expires tonight," "we only have two installation slots left in your neighborhood," or "your neighbor already signed up and you'll miss the group discount."

These are classic high-pressure sales techniques. Legitimate solar companies do not require same-day signatures. The pricing will not expire tonight.

How to protect yourself:

• Never sign a contract the same day a salesperson shows up at your door.
• Know your rights: The FTC's Cooling-Off Rule gives you three business days to cancel most sales made at your home. Many states extend this window for solar contracts.
• Ask for all materials in writing and tell the rep you will review them and call back. A legitimate company will respect that.
• Check whether your city or county requires a solicitation permit. If the rep doesn't have one, they are already breaking the law.

Scam 4: Inflated Savings Projections

How it works: The sales proposal shows you saving $80,000 or more over 25 years, based on assumptions that don't hold up. Common tricks include projecting utility rate increases of 6-8% per year (the historical average is closer to 3-3.5%), overstating your home's solar production potential, ignoring system degradation over time, or assuming net metering policies will never change.

A system that genuinely saves $40,000 over its lifetime is excellent. A company that needs to inflate that number to $80,000 to close the deal is telling you something about their confidence in their own product.

How to protect yourself:

• Ask the company to show you the assumptions behind their savings estimate: assumed utility rate escalation, panel degradation rate, net metering policy, and projected annual production in kilowatt-hours.
• Cross-reference production estimates with the National Renewable Energy Laboratory's PVWatts Calculator (pvwatts.nrel.gov), a free tool that estimates solar production for any U.S. address.
• Be skeptical of any projection assuming utility rates will increase more than 4% per year.

Scam 5: Hidden Dealer Fees in Solar Loans

How it works: This is one of the most damaging and least understood solar panel scams in 2026. A company offers you a solar loan with an attractively low interest rate -- say, 1.99% or even 0.99%. What they don't make clear is that the low rate is subsidized by a dealer fee (also called an origination fee or discount fee) that can add up to 30% to the cost of your system.

Here is what that looks like in practice: your system costs $20,000 to install. The dealer fee is 25%. The lender adds $5,000 to your loan principal. You now owe $25,000 -- for a $20,000 system. That $5,000 goes directly to the finance company, not to your installer.

The CFPB has flagged this practice specifically. In some cases, homeowners have ended up paying more for their solar loan than they would have saved on electricity over the entire life of the system.

How to protect yourself:

• Ask every lender or installer directly: "What is the dealer fee or origination fee on this loan?"
• Compare the total amount financed to the cash price of the system. If the financed amount is significantly higher, a dealer fee is buried in there.
• Get at least three loan quotes and compare total cost of borrowing, not just the interest rate.
• Consider a standard home equity loan or HELOC, which typically carry no dealer fees and offer competitive interest rates.

Scam 6: Referencing the Expired Federal Tax Credit

How it works: The residential solar Investment Tax Credit (ITC) under Section 25D expired on December 31, 2025, following the One Big Beautiful Bill Act. Despite this, some sales reps in 2026 are still telling homeowners they qualify for a 30% federal tax credit on a purchased solar system.

This is either ignorance or fraud, and neither should give you confidence in the company. In some cases, the rep shows you a savings estimate with the tax credit baked in, making the system appear cheaper than it is. You sign, file your taxes, and discover the credit does not exist.

How to protect yourself:

• The residential solar tax credit is gone for systems installed in 2026 and beyond. Any company that tells you otherwise is either uninformed or lying.
• If a proposal includes a line item for "federal tax credit" or "ITC savings," ask the company to provide it in a revised proposal with that line removed so you can see the real numbers.
• The commercial ITC under Section 48E still exists and benefits homeowners indirectly through solar leases and PPAs -- but it is not a credit you can personally claim on a purchased system.

Scam 7: Fake Reviews and Ratings

How it works: A company floods Google, Yelp, and the BBB with fabricated five-star reviews to create an appearance of legitimacy. Some operations go further, purchasing fake awards, fabricating "Best of" logos, or paying for placement on comparison websites that present themselves as independent but are actually pay-to-play.

A 2024 investigation by the Washington State Attorney General found that several solar companies had purchased hundreds of fake Google reviews from review farms overseas.

How to protect yourself:

• Look for patterns. If dozens of five-star reviews appeared within a short period, use near-identical language, or come from accounts with no other review history, they are likely fake.
• Check the BBB profile carefully. A high star rating with an "F" BBB grade is a red flag -- star ratings come from user reviews (fakeable), while the letter grade reflects complaint history and business practices.
• Ask the company for references from past customers in your area. Then actually call them.
• Search the FTC's consumer complaint database for the company name.

Scam 8: Bait-and-Switch Equipment

How it works: Your sales proposal specifies premium panels from a brand like REC, Panasonic, or SunPower. What gets installed on your roof is a cheaper, lower-efficiency panel from a less reputable manufacturer. The installer pockets the cost difference, and you end up with equipment that produces less energy, carries a weaker warranty, or both.

This scam also applies to inverters and battery storage systems. A quote may list a Tesla Powerwall, but a lesser-known battery shows up on installation day.

How to protect yourself:

• Your contract should specify the exact make, model, and quantity of every piece of equipment: panels, inverters, racking, and batteries.
• Before signing, research the specific panel model. Verify the manufacturer's warranty directly on their website.
• On installation day, check the labels on the panels being installed against what your contract specifies. Take photos.
• If the installer says they need to substitute equipment, get the substitution in writing with an explanation and do not accept a downgrade without a corresponding price reduction.

Scam 9: Automatic Contract Renewal Clauses

How it works: Your solar lease or PPA includes a clause that automatically renews the contract for an additional 5-10 years unless you provide written notice 60-90 days before the end of the initial term. Buried on page 14 of a 22-page contract, this clause can trap you in a below-market arrangement for years beyond what you intended -- and create serious complications if you try to sell your home.

Some contracts also include automatic annual payment escalators of 2.9% or more, which means by year 20 you could be paying more for leased solar than grid electricity.

How to protect yourself:

• Search the contract for the words "renewal," "auto-renew," "extension," and "escalator."
• Set a calendar reminder for the cancellation notice deadline -- not the contract end date, but the last day you can provide notice (usually 60-90 days earlier).
• Negotiate the escalator. Many companies will agree to a lower annual increase or a fixed rate if you ask during negotiations.
• If a company refuses to modify the auto-renewal clause, that tells you how they plan to make money on your deal.

Scam 10: Selling Your Personal Information

How it works: You fill out a form on a website that promises a "free solar quote" or "instant savings estimate." Instead of connecting you with a single reputable installer, the site sells your contact information to five, ten, or even twenty companies. Your phone starts ringing within minutes and doesn't stop for weeks.

These lead-generation sites are not solar companies. They are data brokers, and many are not transparent about how your information will be used.

How to protect yourself:

• Read the privacy policy before submitting your information. Look for language about "sharing with partners" or "third-party marketing."
• Legitimate solar marketplaces (like EnergySage) disclose exactly how many companies will contact you and let you control the process.
• Use a dedicated email address and Google Voice number for solar inquiries so you can shut them down if needed.
• If already being bombarded, file an FTC complaint and request removal from the company's contact list in writing.

How to Verify a Solar Company Before You Sign

Run through this checklist before committing. It takes about 30 minutes and can save you tens of thousands of dollars.

Check Their License

Every state requires solar installers to hold specific licenses -- typically a general contractor's, electrical contractor's, or dedicated solar contractor license. Verify the license number directly through your state's contractor licensing board. Do not take the company's word for it.

Look Up Their BBB Profile

Check both the star rating and the letter grade. Read the complaints -- not just the number of complaints, but how the company responded. A company with a few complaints that were all resolved professionally is very different from one with dozens of unanswered complaints.

Read Reviews Across Multiple Platforms

Check Google, Yelp, SolarReviews, EnergySage, and your state's attorney general complaint database. No single platform gives you the full picture. Look for consistency across platforms.

Ask for References

Ask the company for the names and phone numbers of three to five customers who had installations completed in the last 12 months. Call them. Ask about the sales process, the installation timeline, the quality of the equipment, and whether their system is performing as promised.

Verify Insurance

The company should carry both general liability and workers' compensation insurance. Ask for certificates and verify them with the carrier. If a worker is injured on your property and the company lacks coverage, you could be liable.

Confirm the Warranty in Writing

Get the panel manufacturer's warranty, the inverter warranty, the installation workmanship warranty, and any production guarantees in writing. Make sure you understand who is responsible for what and for how long.

FTC Tips for Solar Consumers

The Federal Trade Commission has published specific guidance for homeowners considering solar. Here are the key points:

• Get multiple quotes. The FTC recommends getting at least three quotes from different installers before making a decision.
• Don't rush. Any company that pressures you to sign immediately is not acting in your best interest.
• Read the entire contract. Every page, every clause, every footnote. If you don't understand something, ask -- or have a lawyer review it.
• Understand what you're signing. Know whether it's a purchase, a loan, a lease, or a PPA. Each one comes with different rights, obligations, and financial outcomes.
• Verify tax credit claims independently. Do not rely on a sales rep for tax advice. Consult the IRS website or a tax professional.
• Use the Cooling-Off Rule. If you signed a contract at your home (including from a door-to-door sale), federal law gives you three business days to cancel. Many states provide additional protections.

How to File a Complaint

If you believe you have been the victim of a solar scam, there are several places to report it. Filing a complaint creates a paper trail that helps regulators identify patterns and take action against bad actors.

Federal Trade Commission (FTC)

File at ReportFraud.ftc.gov. The FTC uses complaint data to identify companies engaging in widespread deceptive practices and to bring enforcement actions.

Consumer Financial Protection Bureau (CFPB)

If your complaint involves a solar loan, financing, or dealer fees, file at consumerfinance.gov/complaint. The CFPB has been particularly active on hidden dealer fees in solar loans.

Your State Attorney General

Every state has a consumer protection division within the AG's office. Filing here is often the most effective step for individual consumers, because state AGs can investigate companies, issue subpoenas, and pursue legal action. Search "[your state] attorney general consumer complaint" to find the filing page.

Better Business Bureau (BBB)

File at bbb.org. BBB complaints become part of the company's public profile and unresolved complaints affect their rating, which motivates companies to respond.

Your State's Contractor Licensing Board

If the installer is unlicensed or performed substandard work, report them to your state's contractor licensing board. This can result in fines, license suspension, or revocation.

FAQ

What are the most common solar scams in 2026?

The most common solar scams include "free solar panel" bait-and-switch schemes, fake government affiliation claims, door-to-door high-pressure sales, inflated savings projections, hidden dealer fees in solar loans, and references to the expired federal tax credit. All ten scams are detailed in this guide.

Is the 30% federal solar tax credit still available in 2026?

No. The residential Investment Tax Credit (ITC) under Section 25D expired on December 31, 2025. Any company telling you that you qualify for a 30% federal tax credit on a purchased residential solar system in 2026 is providing inaccurate information. The commercial ITC under Section 48E still exists and can benefit homeowners indirectly through leases and PPAs.

How do I know if a solar company is legitimate?

Verify their state contractor's license, check their BBB profile (both star rating and letter grade), read reviews across multiple platforms, ask for customer references, confirm they carry general liability and workers' compensation insurance, and get all warranty details in writing before signing anything.

What should I do if I've already been scammed by a solar company?

File complaints with the FTC (ReportFraud.ftc.gov), the CFPB (if financing is involved), your state attorney general's consumer protection division, the BBB, and your state's contractor licensing board. If you signed a contract at your home, check whether you are still within the federal three-day cooling-off period or any extended state cancellation window. Consult a consumer protection attorney for significant financial losses.

Are door-to-door solar sales legitimate?

Some legitimate solar companies do use door-to-door sales, but the format is heavily exploited by bad actors. Never sign a contract the same day someone knocks on your door. Always verify the company independently, and remember that the FTC's Cooling-Off Rule gives you three business days to cancel contracts signed at your home.

What are dealer fees in solar loans?

Dealer fees (also called origination fees or discount fees) are charges added to your solar loan principal that can range from 10% to 30% of the system cost. They subsidize the low interest rate advertised by the lender. A $20,000 system with a 25% dealer fee results in a $25,000 loan. Always compare the total amount financed to the cash price of the system.

Can I get my money back if a solar company misrepresented the deal?

Depending on your state's consumer protection laws, you may be able to pursue a refund, contract rescission, or damages. Document everything -- save all communications, contracts, proposals, and marketing materials. File complaints with regulatory agencies and consult a consumer protection attorney.

The Bottom Line

Solar energy remains one of the smartest investments a homeowner can make in 2026. But the industry's rapid growth has created opportunities for bad actors who rely on confusion, pressure, and fine print to separate you from your money.

The defense is straightforward: slow down, get multiple quotes, read every word of every contract, verify everything independently, and never let anyone rush you into a 20-year financial commitment. If something feels wrong, it probably is.