Solar panel fraud is any deceptive practice used to mislead homeowners into signing unfair solar contracts, paying hidden fees, or agreeing to terms they were never fully informed about. It includes misrepresented savings, forged agreements, and predatory financing.
Why Solar Fraud Is Growing So Fast
The residential solar industry has exploded in the last decade, and that growth has attracted bad actors alongside legitimate installers. The numbers tell a troubling story.
FTC complaints mentioning solar panels reached 5,331 in just the first nine months of 2023, up 31% from all of 2022 and up 746% since 2018 when the FTC first began tracking this data.
One-star reviews on Solar Reviews, the industry’s largest consumer feedback platform, increased more than 1,000% in the same period, far outpacing the roughly 2.5x growth in actual solar installations.
In August 2024, the U.S. Treasury, the Consumer Financial Protection Bureau (CFPB), and the Federal Trade Commission (FTC) announced a joint interagency initiative specifically to combat deceptive practices in the residential solar sector. The CFPB found that improper business practices were adding as much as 30% in fees to the average solar loan.
The message is clear: the solar industry has a fraud problem, and regulators are paying attention.
Common Types of Solar Panel Contract Fraud
1. Misrepresented Savings and Energy Projections
This is the most widespread form of solar agreement fraud. Salespeople promise specific dollar savings on monthly utility bills, often claiming the panels will “eliminate” your electric costs.
These projections are frequently inflated, based on unrealistic assumptions, or calculated without accounting for loan interest, maintenance costs, or local utility rate changes.
2. Fake or Forged Solar Contracts
A particularly disturbing pattern documented by the NPR investigation into rooftop solar fraud involves salespeople creating fake email accounts to process electronic contracts without the homeowner’s proper knowledge or consent. In some cases, customers later discovered they had signed financing agreements they never reviewed.
3. Solar Lease Fraud and PPA Misrepresentation
Solar leases and Power Purchase Agreements (PPAs) are legitimate financial structures, but they are frequently misrepresented. Homeowners are told they are buying panels outright, when in reality they are entering a 20 to 25-year lease or PPA with companies like SunRun, SunPower, Sungevity, or third-party financing arms.
These agreements often include annual payment escalator clauses that increase costs by 2 to 3% per year, which are rarely disclosed upfront.
4. Hidden Fees in Solar Financing
Loan-based solar purchases carry their own set of risks. Companies like Mosaic, Goodleap, Dividend Finance, and others offer solar loans through installers, but the loan’s true cost is sometimes obscured.
Dealer fees, also called “loan origination fees,” are typically baked into the inflated system price and never shown as a separate line item on the contract.
5. Government Impersonation and False Tax Credit Claims
Salespeople routinely imply federal or state government endorsement to appear more credible. Phrases like “government rebate program” or “Biden solar initiative” are used to make the pitch sound official. The FTC’s Impersonation Rule, effective April 2024, now makes it illegal to claim government endorsement falsely.
Additionally, some sales reps overstate the federal Investment Tax Credit (ITC), telling homeowners they will receive a cash refund when in reality the 30% credit only reduces tax liability and may not produce any direct payment.
6. High-Pressure In-Home Sales Tactics
Door-to-door solar salespeople operating under companies like Titan Solar, Pink Energy (now defunct), Freedom Forever, and others have generated thousands of complaints for using aggressive, misleading tactics. Buyers are pressured to sign contracts the same day, told the offer expires immediately, or are not given adequate time to review terms.
Red Flags: How to Spot a Solar Scam Before You Sign
| Warning Sign | What It May Mean |
| Salesperson discourages reading the contract | Terms may be unfavorable or unclear |
| Savings guarantees without written documentation | Projection may be fabricated or overstated |
| No mention of a 3-day cancellation right | Possible legal violation; right always exists |
| Government agency names used in pitch | Likely impersonation, now illegal under FTC rules |
| “Today only” pressure | Classic high-pressure tactic to prevent due diligence |
| Installer unfamiliar with local permitting | May lack proper licensing |
| Escalator clauses buried in fine print | Long-term cost increase rarely disclosed verbally |
What Are Your Legal Rights After Signing a Solar Contract?
Federal 3-Day Cooling-Off Rule
Under the FTC’s Cooling-Off Rule (16 CFR Part 429), if a solar contract was signed at your home following a door-to-door or in-home presentation, you have three business days to cancel the solar contract without penalty.
The seller is required to give you two copies of a written cancellation form at the time of signing. If they did not, your cancellation window may not have legally started, which in some cases means the right to cancel can remain open significantly longer.
Truth in Lending Act (TILA) Rescission Right
For solar loans secured by your home, TILA provides a separate 3-day right of rescission. Critically, if the lender failed to provide required disclosures, this window can extend up to three years from the date of the loan.
State Consumer Protection Laws
California, Florida, New York, and Texas all have additional protections layered on top of federal rules. Florida’s Home Solicitation Sales Act, for example, gives homeowners a right to rescind in-home solar contracts within 3 business days.
California Civil Code Section 338 allows rescission based on fraud within three years of discovering the misrepresentation. Florida’s Attorney General reported a 700% increase in solar-related consumer complaints in 2024, prompting more active enforcement.
Breach of Contract Claims
If a solar company made specific promises in writing or verbally that were not honored, such as a guaranteed production output, specific equipment models, or a promised installation timeline, you may have grounds for a breach of contract claim regardless of the cancellation period.
How to Fight Back: Steps to Take if You Have Been Defrauded
- Step 1: Gather all documentation. Collect your signed contract, any financing agreements, all written and email communications with the installer, and your utility bills from before and after installation.
- Step 2: Review the cancellation notice. Check whether the company properly provided the FTC-required written cancellation form. If it is missing or improperly formatted, your legal options may be broader than you think.
- Step 3: File complaints with regulatory agencies. Submit complaints to the FTC at reportfraud.ftc.gov, the CFPB at consumerfinance.gov/complaint, and your state’s Attorney General consumer protection office. These complaints directly feed regulatory enforcement actions.
- Step 4: Contact your state’s contractor licensing board. If the installer lacks proper licensing or violated installation codes, the licensing board can investigate and potentially revoke their operating authority.
- Step 5: Consult a consumer protection attorney. Many attorneys who handle solar fraud cases offer free initial consultations and work on a contingency basis. An attorney can assess whether misrepresentation, TILA violations, or other legal grounds exist that would allow you to exit the contract or seek damages.
- Step 6: Do not stop making loan or lease payments while pursuing cancellation. Stopping payments without a legal basis can damage your credit and complicate your case. Get legal guidance before halting any payments.
Solar Lease Fraud vs. Solar Loan Fraud: Key Differences
| Issue | Solar Lease / PPA | Solar Loan |
| Who owns the panels | The leasing company | You (after loan payoff) |
| Main fraud type | Misrepresented ownership, escalators | Hidden dealer fees, inflated system price |
| Home sale complications | Lease must transfer or be bought out | Lien on title must be satisfied |
| Rescission path | Depends on state and contract terms | TILA may apply if home-secured |
| Most common companies | SunRun, SunPower, Tesla Energy | Mosaic, Goodleap, Dividend Finance |
A Note on Who Can Help
Trying solar contract cancellation on your own is difficult. Solar Equity Solutions, accredited by the Better Business Bureau, has helped homeowners cancel more than 5,000 solar contracts with companies across the industry.
If you believe you were misled, misrepresented, or are simply trapped in a solar agreement that is not working for you, reaching out to a specialist with documented cancellation experience is a reasonable first step.
Frequently Asked Questions
What is solar panel contract fraud?
Solar panel contract fraud occurs when a solar company uses deception, misrepresentation, or forged documents to get homeowners to sign agreements they would not otherwise agree to if fully informed.
Can I cancel a solar contract after signing?
Yes. Federal law gives most homeowners a 3-business-day window to cancel in-home solar contracts without penalty. After that, cancellation depends on your specific contract terms and whether legal grounds such as misrepresentation exist.
What is solar lease fraud?
Solar lease fraud typically involves misrepresenting a lease or PPA as an outright purchase, hiding escalator clauses, or failing to disclose how the lease affects your ability to sell your home.
How do I report solar panel fraud?
File complaints with the FTC at reportfraud.ftc.gov, the CFPB at consumerfinance.gov/complaint, and your state Attorney General’s office. You can also contact your state’s contractor licensing board.
Is the federal solar tax credit a scam?
No. The federal Investment Tax Credit (ITC) is legitimate and currently offers a 30% credit on solar installation costs. It is not a cash payment, though. It reduces what you owe in federal taxes and may not benefit those with little or no tax liability.
What should I look for before signing a solar contract?
Always read the full contract before signing, ask for the total system cost including financing, confirm your 3-day cancellation right in writing, get savings projections in writing with stated assumptions, and research the installer’s reviews and licensing independently.
How long does it take to cancel a solar contract legally?
The 3-day cooling-off cancellation can be confirmed within days. Contract rescission based on fraud or TILA violations can take months, especially if legal proceedings are involved.
What happens to my solar panels if the contract is cancelled?
If cancellation is granted based on the company’s misconduct or misrepresentation, the company is generally responsible for removing the panels at their expense. The specifics depend on the cancellation grounds and state law.
Disclaimer
This article is for informational purposes only and does not constitute legal advice. Solar contract rights vary by state, contract type, and individual circumstances. If you believe you are a victim of solar panel fraud, consult a qualified consumer protection attorney in your jurisdiction.