I have been involved in the solar industry for more than 10 years now, and I have seen many scams and spammy tactics to trick people into buying solar panels.
Going solar is one of the smartest long-term investments a homeowner can make, but it has also become one of the most exploited.
As solar adoption grows across the U.S. and beyond, so does the number of bad actors looking to profit from uninformed buyers.
Solar panel scams have become a serious consumer problem, particularly in states with strong incentive programs and high electricity costs.
In this guide, I’ll walk you through the five most common solar panel scams, how to recognize them before they cost you money, what red flags to watch for, and exactly what to do if you’ve already been victimized.
What Are Solar Panel Scams?
Solar panel scams are fraudulent or deceptive practices used by unethical companies or individuals to take financial advantage of homeowners who are considering switching to solar energy.
These schemes typically combine old-school door-to-door sales pressure with more sophisticated contracting tricks.
Scammers may misrepresent what you’re actually buying, make false promises about savings or government incentives, use urgency tactics to prevent you from thinking clearly, or simply disappear after taking a deposit.
Because a residential solar installation typically costs between $15,000 and $30,000 before incentives, it ranks among the largest purchases most families ever make, second only to a home or vehicle. That makes it an attractive target for fraud.
How Common Are Solar Panel Scams?
Solar scams are more common than most people realize, and they tend to spike in states and regions where solar markets are booming or where government rebate programs are highly publicized.
When there’s a financial incentive on the table, scammers show up to exploit the confusion around who qualifies, what’s covered, and how the process works.
Consumer protection agencies have seen a steady rise in solar-related complaints in recent years.
The Federal Trade Commission (FTC) and various state attorneys general have issued warnings and taken action against fraudulent solar companies. If you’re shopping for solar, awareness is your best defense.
The 5 Most Common Solar Panel Scams
Deceptive Lease Agreements and PPAs
One of the most widespread solar scams involves misleading lease agreements or Power Purchase Agreements (PPAs).
These are legitimate financing structures when used honestly—but scammers weaponize the fine print.
The pitch usually sounds like this: “Get solar panels installed for $0 down!” or “Solar at no cost to you!” What they conveniently fail to explain is that you won’t own the panels.
You’re essentially renting them, often locked into a 20 to 25-year agreement with annual price escalation clauses built in.
Here’s what actually happens
The solar company installs the system, retains ownership, and collects the federal tax credit itself.
You pay a monthly fee for the electricity generated, a fee that can rise 2–3% per year regardless of what utility rates actually do.
If you sell your home, the lease transfers to the buyer, which can complicate or even kill real estate deals.
What to watch for
- Claims of “free” or “$0” solar panels without a clear explanation of ownership
- Contracts that run 20+ years with escalating payment clauses
- A salesperson who glosses over or deflects questions about ownership
- No mention of who receives the federal Investment Tax Credit (ITC)
Always ask directly: “Will I own these panels outright, or is this a lease?” Get the answer in writing.
Fake Utility Company or Government Representatives
This scam is particularly insidious because it exploits trust in official institutions.
A scammer often via phone, email, or even in person poses as a representative from your utility company or a government agency.
They may claim you qualify for a special solar program, a government subsidy, or a dramatic discount on your electricity bill.
The “offer” is designed to create excitement and bypass your skepticism. They might tell you that the program is ending soon, that your home has already been selected, or that you’ll face higher bills if you don’t act now.
No legitimate government agency will contact you unsolicited to push solar panel installation. No utility company will pressure you to sign up for a specific solar provider’s service. These are private sales dressed up in official clothing.
What to do
Hang up or close the door. Then, independently look up the phone number for your utility company or the government agency they claimed to represent and call directly to verify. Never use the contact information the caller provides.
High-Pressure Sales Tactics
Legitimate solar companies give you time to think. Scammers don’t because time is their enemy. The longer you have to research, compare, and consult with others, the more likely you are to see through the deception.
High-pressure solar sales tactics come in many forms
Artificial urgency
“This deal expires tonight,” or “We only have two spots left in your area this month.” Real installers don’t run out of installation slots in a way that forces a same-day decision.
On-the-spot contract signing
Pressuring you to sign paperwork before a thorough assessment of your roof, energy usage, or financial situation has been completed.
Inflated savings promises
Claiming your bill will drop to $0 or that you’ll earn significant income from selling power back to the grid, without providing data or calculations specific to your home.
Misrepresented credentials
Claiming to be certified by NABCEP (North American Board of Certified Energy Practitioners) or affiliated with known solar brands without proof.
The rule
If you feel rushed, that’s a red flag. Any reputable company will let you take the contract home, review it overnight, and consult with a family member or attorney before signing. If they won’t, walk away.
Bait-and-Switch Tactics
The bait-and-switch is a classic fraud technique adapted for the solar industry. You’re initially presented with a compelling, competitively priced offer, perhaps a specific panel brand, system size, or installation timeline. You agree based on that proposal.
Then, once you’re committed (or after a deposit is paid), the terms shift. The promised equipment has been “substituted” for lower-quality alternatives.
The system size is reduced. Fees that weren’t mentioned appear in the contract. The installation timeline stretches out by months. The warranty that was verbally guaranteed isn’t actually in the written agreement.
This tactic works because homeowners often don’t review contracts carefully, especially after a long sales process.
How to protect yourself
- Get every detail of your agreement documented in writing before signing: equipment brand and model, system output, total price, installation timeline, and warranty terms
- Never sign a contract without a detailed written quote attached
- If anything in the signed contract differs from what was verbally promised, do not proceed until it is corrected in writing
Phantom Companies and Fly-By-Night Installers
Some solar scammers don’t intend to deliver anything at all. They collect a deposit or even full payment, perform a cursory or botched installation, and then disappear, leaving you with no recourse, a non-functioning system, or property damage from improper roof penetrations.
Others may complete a technically functional installation but use substandard panels with no warranty backing, unlicensed electrical work that creates safety hazards, or improper mounting that voids your roof warranty.
Since you can’t always tell a legitimate company from a fraudulent one by appearance alone, verification is essential.
How to verify a company’s legitimacy
- Check their contractor’s license with your state licensing board
- Verify they carry both general liability insurance and workers’ compensation
- Look them up on the Better Business Bureau, Google, and Yelp
- Ask for references from local installations completed in the past 12 months
- Confirm their physical business address is real (not a P.O. box or virtual office)
Red Flags to Watch For
Regardless of which type of scam you’re facing, these warning signs should put you on alert:
- Promises of “free” solar panels or prices dramatically below the market average
- Claims of government or utility affiliation without verifiable credentials
- Pressure to sign the same day, with no time to review
- Refusal to provide licensing numbers, insurance certificates, or company registration
- Verbal promises that don’t appear anywhere in the written contract
- Vague or nonexistent warranty terms
- No physical office address or local presence
How to Avoid Solar Panel Scams
Know your market
Research the average cost of solar installation in your state before accepting any quote. Prices vary by region, but most residential systems fall within a predictable range. A quote that’s dramatically lower than the market rate isn’t a bargain, it’s a warning.
Get at least three quotes
Multiple competing bids not only save you money but also give you a baseline for comparison. If one company’s offer looks radically different from the others, ask detailed questions about why.
Vet every company thoroughly
Search the company name alongside words like “complaint,” “scam,” or “review.” Check the BBB and Google reviews.
Ask your state’s solar energy association or contractor licensing board to confirm their standing. If you can’t find any trace of a company online, that itself is a red flag.
Never sign without a written quote
A signed contract without an attached itemized quote is an open door for bait-and-switch. The quote and contract should be consistent with each other in every detail.
Check licensing and insurance
Request the contractor’s license number and verify it directly with your state licensing board. Request a certificate of insurance. A legitimate company will provide both without hesitation.
Read the contract carefully, or hire someone to
If you don’t feel confident reviewing a long solar contract, it’s worth paying a real estate or contract attorney for an hour of their time to go through it. Given the size of the investment, it’s money well spent.
What to Do If You’ve Been Scammed
Document Everything Immediately
As soon as you suspect fraud, begin preserving every piece of evidence: contracts, quotes, email threads, text messages, receipts, and any written communication.
Write down the dates and details of verbal conversations while they’re fresh. If your state allows one-party consent for call recording, record future phone interactions.
Consult a Specialized Attorney
Not every attorney handles solar disputes. Look for one with experience in consumer protection law, contractor fraud, or solar energy contracts specifically.
Many offer free initial consultations. A qualified attorney can assess whether you have grounds for fraud, misrepresentation, or breach of contract claims.
Understand Your Legal Options
Being scammed doesn’t mean the money is gone. Depending on your situation, you may have grounds to sue for damages, rescind the contract, or pursue claims through your state’s consumer protection office.
Some states have specific statutes that provide treble damages (triple the amount you lost) in fraud cases.
If a fraudulent loan was used to finance the installation, your attorney may also be able to challenge the loan itself, particularly if the lender had any relationship with the fraudulent contractor.
Report the Scam
File complaints with:
- The Federal Trade Commission (FTC) at reportfraud.ftc.gov
- Your state attorney general’s consumer protection division
- The Better Business Bureau
- Your state contractor licensing board
Reporting doesn’t just help you; it creates a paper trail that can shut down serial scammers and protect future victims.
Final Thoughts
Solar energy is a legitimate, proven technology that can significantly reduce your electricity costs and carbon footprint over time.
The bad actors in this industry don’t represent the solar sector as a whole, but they are real, they are active, and they specifically target homeowners who are excited about going solar and perhaps less familiar with how the industry works.
The best protection is patience. Take your time. Get multiple quotes. Verify credentials. Read everything before you sign. If something feels off, it probably is.
A trustworthy solar installer will welcome your questions, encourage you to take time deciding, and put every promise in writing. That’s the standard to hold every company to, and if they fall short of it, keep looking.
