Making a decision about solar energy for your home or business can be confusing. With solar panels popping up across neighborhoods and advertisements promising huge tax credits and rebates, it’s easy to see why homeowners are eager to join the clean energy revolution. Unfortunately, the boom in solar power has also attracted scammers eager to exploit this demand. Understanding how these solar scams work, what to watch out for, and how to protect yourself can save you thousands of dollars and endless frustration.
Over the past decade, solar energy has become popular as a home improvement option. Thanks to falling costs, innovative solar companies, and support from the federal government, installing solar panels may cut your utility bill and reduce energy costs over time.
But as with any industry, not everyone plays fair. Some unethical salespeople and fraudulent solar companies use misleading marketing, high-pressure sales tactics, or outright lies to trick homeowners into signing costly contracts or sharing sensitive information. These scammers prey on confusion about government programs, promising deals that don’t exist or using names that sound like official agencies such as the Department of Energy or FTC.
One of the most common solar scams starts with a door-to-door salesperson or a cold phone call claiming you qualify for free solar panels through a government program. While there are legitimate rebates and tax credits, the federal government doesn’t hand out free solar systems. These claims are designed to lure homeowners into signing misleading solar lease agreements with high monthly payments and confusing terms.
Many solar marketing schemes involve salespeople pushing limited-time offers to rush homeowners into making upfront decisions. They may say you’ll lose access to tax credits or rebates unless you act immediately. Don’t fall for it, these are classic red flags. A legitimate solar company will never demand instant commitment or require large upfront payments without proper documentation.
Some scammers claim to represent your utility company, the Department of Energy, or another gov agency. They might ask for your electric bill or credit report to “verify eligibility.” In reality, they’re collecting sensitive information for identity theft or fraudulent contracts. Always verify credentials directly with your utility company or the Federal Trade Commission before sharing any personal data.
A solar lease or power purchase agreement (PPA) can make sense for some residential solar users, but only if terms are clear. Fraudulent solar companies often bury hidden fees, escalating monthly payments, or automatic renewals in fine print. Always read the full contract and consult your credit union or financial advisor before signing.
The Federal Trade Commission (FTC) and the Consumer Financial Protection Bureau (CFPB) both warn homeowners to be alert for solar scams. Here are some red flags that should make you pause:
- Unsolicited contact: Unexpected door-to-door sales or aggressive phone calls offering “exclusive” deals.
- Upfront payments: Pressure to pay large deposits before solar panel installation begins.
- Too-good-to-be-true offers: Claims of “zero-cost solar” or guaranteed tax credits without inspection.
- Fake affiliations: Misuse of logos from the federal government, Department of Energy, or FTC.
- Lack of credentials: No contractor’s license, insurance, or certified electrician on staff.
- No written contract: Verbal promises or missing warranties are major warning signs.
Before you invest in a solar power system, do your homework. The key to avoiding solar scams is to stay informed and cautious.
Look up solar companies through the Better Business Bureau, your state’s licensing board, or your attorney general’s office. Read online reviews and ask for references from past customers. Reputable companies are transparent about their business practices, pricing, and installation process.
Confirm any tax credits or rebates directly through official gov websites, such as energy.gov or reportfraud.ftc.gov. These sources provide accurate information about legitimate federal tax credits and state-level incentives.
Get at least three bids from different solar companies. Compare system sizes, monthly payments, and warranties. A credible installer will provide clear, written estimates, not vague promises or high-pressure sales tactics.
If you’re financing a solar power system, talk with your credit union, bank, or the Consumer Financial Protection Bureau (CFPB) for guidance. Review your credit report to ensure no unauthorized inquiries or loans appear.
A reliable solar panel installation includes comprehensive warranties on equipment and labor. Avoid any solar company that dodges questions about repairs or long-term performance.
If you think you’ve encountered a fraudulent solar marketing operation or deceptive business practices, report it immediately:
- File a complaint at reportfraud.ftc.gov.
- Contact your state attorney general and local consumer protection office.
- Notify the Consumer Financial Protection Bureau (CFPB) if financing was involved.
- Alert your utility company if scammers used their name.
Keep all documents, emails, and phone calls related to the transaction as evidence. Acting quickly can prevent further damage and help others avoid similar traps.
Legitimate solar companies don’t need gimmicks to win business. They’ll send qualified electricians, not aggressive salespeople, and they’ll be upfront about pricing and financing. They’ll also educate homeowners on how clean energysystems work, how long solar panels last, and how rebates or tax credits truly apply.
Before committing, ask questions like:
- Who handles maintenance and warranties?
- How are monthly payments calculated?
- What happens if I move?
- Is the solar power system purchased, leased, or financed?
- Is my roof in a good enough condition to install solar panels?
If the answers seem vague or defensive, consider that another red flag. Trustworthy solar companies will help you make informed decisions, not rush you into contracts.
Agencies like the Federal Trade Commission (FTC), Department of Energy, and Consumer Financial Protection Bureau (CFPB) continue to monitor solar scams and misleading solar marketing tactics. They encourage homeowners to stay vigilant and report suspicious business practices. Public education campaigns and consumer alerts aim to ensure clean energy growth doesn’t come at the cost of consumer trust.
Still, enforcement can only go so far. Many scammers operate online or use disposable phone numbers, making them hard to track. That’s why homeowners must stay proactive, verifying every claim, reading every contract, and understanding how legitimate government programs work before committing to any solar panel installation.
By recognizing the signs of solar scams, verifying offers with official gov sources, and dealing only with reputable companies, homeowners can objectively evaluate solar energy options safely and confidently.
If you suspect wrongdoing, don’t stay silent. Contact the Federal Trade Commission, your attorney general, or the Consumer Financial Protection Bureau. Together, we can make sure the promise of solar panels stays focused on sustainability, not deception.
Remember: When it comes to solar energy, knowledge is the most powerful tool you have. Stay cautious, ask questions, and protect yourself before signing any home improvement agreement.