Solar Scams and How To Avoid Them (2024)

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Updated: Jun 25, 2024

Written by Faith Wakefield

Written by Faith Wakefield Writer

Faith is a writer whose work has been featured in EcoWatch and Today’s Homeowner. She holds economics and English degrees from the University of North Carolina at Chapel Hill and likes to collect books and spend time in nature in her free time.

Edited by Tori Addison

Edited by Tori Addison Editor

Tori Addison is an editor who has worked in the digital marketing industry for over five years. Her experience includes communications and marketing work in the nonprofit, governmental and academic sectors. A journalist by trade, she started her career covering politics and news in New York’s Hudson Valley. Her work included coverage of local and state budgets, federal financial regulations and health care legislation.

Solar has become drastically more affordable over the past decade, making it an increasingly popular way for homeowners to save money on their energy bills and reduce their carbon footprint. Around 2.7 million houses have solar panels nationwide, but as solar has become more popular, so has the prevalence of solar panel scams and illegitimate companies.

To avoid being scammed and potentially losing thousands of dollars on a nonexistent or nonoperational solar system, look out for red flags and always do your research before choosing a solar installer.

If you’d like to get paired with a trusted, nationwide solar provider, you can choose one of our top-rated solar companies below to speak with a representative.

Common Solar Panel Scams

As the solar industry becomes more competitive, more solar panel scams have arisen. Here are some common solar panel scams to look out for.

Fake solar companies: Perhaps one of the most common solar scams involves creating a fake company and “selling” solar panel systems without any intention of ever installing them. These fake companies may request a large upfront deposit and then disappear before ever completing any work.
Identity theft scams: Fake solar companies or scammers posing as solar representatives may also have you fill out fraudulent solar paperwork, later using your personal information to steal your identity.
Solar lease or power purchase agreement (PPA) scams: Although leasing solar panels or financing using a PPA are not necessarily scams, these contracts are extremely difficult to break and can leave you saddled with an unwanted monthly payment for a solar array you don’t even own. Always read and understand the terms of your solar lease or PPA before entering into a long-term agreement.
Misleading contracts: Dishonest solar companies may install solar panels on your home but offer misleading contracts that overcharge you or absolve the company of any responsibility if your system is faulty or nonfunctional.

Knowing about solar scams and what to look out for can help you protect your assets and prevent you from becoming victimized.

How To Avoid Solar Panel Scams

To avoid solar panel scams, we strongly recommend doing your own research and verifying that your solar company is legitimate before signing any contracts.

Take time to make the right decision: Never rush into a contract. Solar scammers will try to pressure you into signing an expensive solar contract before you fully understand the details of the agreement. On the other hand, legitimate solar companies will present you with everything you need to know and give you time to decide what’s best for you. Walk away if your solar representative isn’t willing to answer your questions or insists that you have to make an immediate decision.
Gather several quotes and do your research: It can never hurt to ask for a second opinion. That’s why we recommend gathering a few quotes from different solar installers and speaking with several solar representatives. One salesperson may tell you something entirely different about your cost and system than another, so it doesn’t hurt to shop around.
Verify your solar company is legitimate: To make sure your solar installer is legitimate, we recommend reading online reviews, visiting the company’s profile on the Better Business Bureau (BBB) website, and verifying the company’s licenses and credentials. Reliable resources include the Solar Energy Industries Association’s (SEIA) national solar database and the Interstate Renewable Energy Council’s (IREC) solar licensing database.

We have performed extensive research using our strict rating methodology to suggest the most trustworthy solar companies. Select one of our top three recommendations from the panel below to get started on your solar journey safely:

Red Flags and Warning Signs

High-pressure sales tactics, exaggerated promises and claims of “free” solar panels are three major red flags to look out for when determining if a solar salesperson is fraudulent or misleading.

High-pressure sales tactics: Many door-to-door sales tactics involve pressuring customers into preemptively signing contracts. Watch out for your sales representatives that insist you sign a contract then and there, or say a deal is only available for a “limited time.” This phrasing could mean they want you to hastily enter into a contract before fully understanding the terms and conditions.
Unrealistic promises: A dishonest solar salesperson may exaggerate how much money you can save with solar panels, or insist that solar is automatically right for you without fully surveying your roof or considering your electricity bills. On the other hand, a legitimate company will tell you if solar panels won’t be worth it for you (whether it’s because your roof is too shaded or small, or for some other reason).
Claims of free solar panels: Another way that shady companies mislead customers into signing a contract — often a solar lease or PPA — is by advertising “free” solar panels. Solar is not free. Some companies offer a grace period before solar payments start or have $0 down deals, but as the customer, you’ll still be paying for your panels. These claims may also mean that your contract includes hidden fees and charges.

Reporting Scams and Seeking Legal Assistance

There are consumer protection resources available if you see a solar scam or become a victim of one.

Report misleading ads on social media: For starters, if you see false or misleading advertisements or claims from a solar scammer on social media, flag the post for removal.
Report fraud to the Federal Trade Commission (FTC): You can report instances of fraud on the FTC website. The FTC will share your report with law enforcers who can investigate and bring cases against businesses committing fraud or scamming customers.
Report fraud to the Department of Justice (DOJ): You can report fraud or scams in your state or locality to the DOJ. Visit your state’s DOJ website to start your report.
Seek legal counsel: If you have been scammed, you can seek legal advice and potentially file a case against the fraudulent company. Visit your state’s DOJ website to learn more about filing a lawsuit or settling a complaint in small claims court.

The Bottom Line

Solar can be an excellent investment in renewable energy. Unfortunately, there are some scammers and illegitimate companies in the solar industry that mislead customers. That’s why you should always do your research before committing to an installer and watch for potential solar scams.

If you’d like to get connected with a reputable provider, select one of our top-rated solar installers below to start the free consultation process.

Frequently Asked Questions About Solar Panel Scams

No, legitimate solar companies won’t rip you off. Reputable solar companies will survey your home and roof, discuss your average power bill and review your energy needs to determine if solar is a viable option for you.

It is typically not possible to get solar panels for free. Be very cautious of any solar panel company advertising free solar panels.

Some states, such as California, offer a government program that allows a select number of low-income, at-risk families to install a solar panel system for free. That being said, obtaining free solar panels is not the norm. However, it is still possible to own solar panels at a low cost. The U.S. government offers a 30% federal tax credit for all solar system installations, and most states have incentive programs and rebates that can lower the upfront cost of solar. Most solar companies also offer financing options, so you can secure a solar loan that fits your budget.

A full solar panel installation typically costs between $15,000 and $20,000. However, your energy needs, roof size and features, and your home’s location will influence the cost of your system.

Solar panels are generally not a scam. Millions of homeowners in the U.S. have a solar power system that allows them to save money on their utility bills and generate clean energy. That being said, there are solar scammers and illegitimate companies that prey on customers. Always do your research about a solar provider before signing any contracts.