Spot solar scams before you sign: fake free-solar offers, expired tax credit pitches, hidden dealer fees and pressure tactics. A 2026 checklist.
Most solar scams in 2026 are not fake companies. They are real sales pitches built on false promises: "free" panels, an expired federal tax credit, a low payment that hides a large fee, or pressure to sign tonight. Learn the red flags below and you can stop nearly all of them at the door.
The most common solar scams are fake "free solar" programs, pitches that still promise the 30% federal tax credit, loans with hidden dealer fees, and high-pressure door-to-door or phone sales. Some are outright fraud. Many are legal contracts sold with misleading claims, which can cost you just as much over 20 to 25 years.
The Federal Trade Commission's August 2024 consumer alert on solar scams (opens in a new tab) is blunt: "free" or "no cost" solar panel offers are scams, and "the federal government does not install solar systems in homes for free." The FTC adds that scammers may say they are from your utility or the government when they are not.
Here is how the main patterns compare.
| Red flag | What you hear | What is really going on | What to do |
|---|---|---|---|
| "Free" solar | "A new government program pays for your panels." | A lease, PPA or loan you pay for 20 to 25 years | Ask who owns the system and what you pay in total |
| Expired tax credit | "You get 30% back from the IRS." | 25D ended for systems completed after Dec 31, 2025 | Ask them to put the claim in writing; it should disappear |
| Hidden dealer fee | "Only 1.99% APR." | A fee of 20% to 30% added to the loan balance | Ask for the cash price and compare |
| Utility impersonation | "Your utility signed you up." | A sales lead pretending to be official | Call the number on your bill |
| Bill-elimination promise | "You'll never pay an electric bill again." | Fixed charges and export rules still apply | Ask for a bill estimate under your utility's real tariff |
| Pressure to sign today | "This price expires tonight." | A tactic to block comparison shopping | Walk away and get two more quotes |
"Free solar" is not real for a typical homeowner. A "$0 down" lease, power purchase agreement (PPA) or loan has no upfront cost, but you pay monthly for 20 to 25 years. Some state and utility programs do pay for solar for income-qualified households, but you apply to them directly. They do not knock on your door.
The FTC's Solar Power for Your Home guide (opens in a new tab) explains the three real ways to pay: buy with cash, take a loan, or sign a lease or PPA where a company owns the panels. Every one of them costs money. The question is never "is it free" but "do my bill savings beat what I pay."
If a pitch includes the words "government program," ask three questions:
A real program has a public web page on a .gov site or your utility's site. If the answer is a company name, it is a sales offer, not a program.
The 30% Residential Clean Energy Credit (Section 25D) ended for expenditures made after December 31, 2025, under Public Law 119-21. As of October 2026, a homeowner who buys a system completed this year cannot claim it, so a pitch promising "30% back" is outdated or misleading.
The timing rule matters. The IRS FAQ issued August 21, 2025 (FS-2025-05) (opens in a new tab) says an expenditure is treated as made "when the original installation of the item is completed." Paying a deposit in 2025 does not help if the installation finished in 2026. Systems completed in 2025 are claimed on the 2025 return with Form 5695, per the IRS credit page (opens in a new tab).
Leases and PPAs are different. The company that owns the panels may still claim a business credit (Section 48E), subject to construction deadlines and sourcing rules. You, the homeowner, do not claim it. Our guide to the federal solar tax credit in 2026 walks through who qualifies.
Here is a loan of the type the Consumer Financial Protection Bureau has warned about, computed with our solar loan calculator. The cash price is $21,000, the loan is advertised at 3.99% for 25 years, and a 20% dealer fee is built in. That makes the loan balance $26,250.
If a quote shows you only the lower number, ask for the payment with no paydown, in writing.
| Monthly payment after month 18 | |
|---|---|
| With $6,300 paydown | $104 |
| No paydown (2026 reality) | $138 |
Source: Worked example: $21,000 cash price, 20% dealer fee, $26,250 loan at 3.99% for 25 years; loan structure per CFPB (2024) (as of 2026-10)
A dealer fee is money the lender keeps so it can advertise a very low rate. It is added to what you borrow. In an August 7, 2024 report (opens in a new tab), the CFPB found these markups often raise loan costs by 30% or more above the cash price and are often left out of the stated APR.
The CFPB also reported that 58% of solar projects in 2023 were paid for with loans, so this is not a rare product. The fix is simple: always ask for the cash price first.
We ran two loans through the site's loan math for a system with a $21,000 cash price.
| Loan | APR shown | Dealer fee | Amount you owe | Monthly payment | Total paid |
|---|---|---|---|---|---|
| Low-rate installer loan, 25 years | 1.99% | 25% ($7,000) | $28,000 | $118.54 | $35,563 |
| No-fee loan, 20 years | 7.99% | None | $21,000 | $175.52 | $42,125 |
The 1.99% loan is not a bad deal in every case; its total here is lower because of the low rate. Of its $35,563 total, $21,000 is the system, $7,000 is the fee and about $7,563 is interest; the no-fee loan's $42,125 includes about $21,125 of interest. But you are borrowing $28,000 for a $21,000 system. Measured against the real cash price, that $118.54 payment works out to an effective rate of about 4.65%, not 1.99%. If you sell the house in year five and pay the loan off, the $7,000 fee is already baked into your balance.
| System (cash price) | Dealer fee | Interest | |
|---|---|---|---|
| 1.99%, 25 yrs, 25% fee | $21,000 | $7,000 | $7,563 |
| 7.99%, 20 yrs, no fee | $21,000 | $0 | $21,125 |
Source: Worked example: solar loan calculator; dealer-fee findings from CFPB (August 7, 2024) (as of 2026-10)
You can test any offer in the solar loan calculator by entering the dealer fee and a planned paydown. For a fuller walk-through of loan structures, see how solar loans work.
Walk away when a seller pushes you to sign the same day, asks for cash, discourages you from reading the contract, or claims a price or program "ends tonight." The FTC lists pressure for a quick decision and requests to pay in cash as warning signs. Solar is a 20 to 25 year decision; a fair offer will still be there next week.
Common scripts include:
Check that the contract matches every promise the salesperson made: system size, equipment brands, total price, payment amounts, escalators, production guarantees and who fixes the roof. The FTC advises comparing detailed written bids and looking for early termination fees, renewal costs and what happens when you sell the house.
Use this order when you review a contract:
To compare offers fairly, enter each one into our solar cost per watt calculator. For example, a 7 kW system quoted at $21,000 is $3.00 per watt. A second 7 kW quote at $30,800 is $4.40 per watt. With a Texas-like yield of 1,400 kWh per kW, the first works out to about 9.1¢ per kWh over 25 years and the second to about 13.3¢. That gap of more than 4¢ per kWh is worth an explanation.
| Cost per kWh over 25 years | |
|---|---|
| $21,000 ($3.00/W) | 9.1¢ |
| $30,800 ($4.40/W) | 13.3¢ |
Source: Worked example: solar cost per watt calculator, 1,400 kWh per kW per year (as of 2026-10)
Our checklist for choosing a solar installer covers licenses, insurance and references in more detail.
Usually yes, if you act fast. The FTC's Cooling-Off Rule (16 CFR Part 429 (opens in a new tab)) gives you until midnight of the third business day to cancel most sales of $25 or more made at your home. The seller must give you a cancellation form. Many states add longer windows, especially for older buyers.
Some practical steps:
If a lender takes a security interest in your home, federal Truth in Lending rules can also give a separate three-day right to cancel. Ask the lender in writing whether that applies.
Vet an installer by checking its state contractor license, insurance, permit history and complaint record before you sign. Report a scam to the FTC at ReportFraud.ftc.gov and to your state attorney general, and to the CFPB if a loan is involved. Keep every document and message.
A quick vetting list:
The Department of Energy's Homeowner's Guide to Going Solar (opens in a new tab) is a good neutral reference for questions to ask any company. If you are comparing ownership types, our lease vs PPA vs loan guide explains which protections differ.
To report a problem, file at ReportFraud.ftc.gov (opens in a new tab), contact your state attorney general, and for a loan, file a complaint with the CFPB. Reports help regulators spot patterns even if they cannot resolve your individual case.
A fair offer gives you a written cash price, a clear price per watt, named equipment, a realistic production estimate for your roof, the real export rules of your utility, and time to think. It does not depend on a tax credit you cannot claim or a payment that only works after a lump sum.
Before you sign anything, you should be able to answer yes to each of these:
If you can, run the numbers yourself in the cost per watt calculator and the loan calculator before your next sales visit. A good installer will welcome the questions.
Yes. The FTC says "free" or "no cost" solar panel offers are scams. Some low-income programs do pay for solar, but they are run by state agencies or utilities and never start with a stranger at your door. A "$0 down" lease or loan is not free either; you still pay every month for 20 to 25 years.
Not for a system you own that was finished in 2026. The Residential Clean Energy Credit (25D) ended for expenditures made after December 31, 2025, and the IRS treats the expenditure as made when installation is completed. Systems completed in 2025 are claimed on the 2025 return. A leasing company may still claim a separate business credit, but you do not.
Under the FTC Cooling-Off Rule, most sales of $25 or more made at your home can be canceled until midnight of the third business day after you sign. Send a written cancellation using the form the seller must give you, and keep proof of delivery. Your state may give you more days, especially if you are a senior, so check your attorney general's site the same day.
A dealer fee is a charge the lender takes out of the loan so it can advertise a low interest rate. The CFPB found these fees often raise the loan cost by 30% or more above the cash price, and they are often left out of the stated APR. Ask for the cash price in writing to see the fee.
Yes, treat it as one. The FTC warns that scammers say they are from your utility or the government when they are not. Hang up or close the door, then call the number on your bill to ask whether the program exists.
Look up the company's license with your state contractor board, search its name with "complaints," and check your state attorney general's records. Ask for a certificate of insurance and the names of the permit and inspection authorities. A real installer will also answer in writing who owns the system and who services it.
No, but they are often sold poorly. A lease or PPA is a legal 20 to 25 year contract where a company owns the panels. The red flags are an escalator that outpaces your utility rates, unclear transfer rules if you sell the house, and production promises that are not guaranteed in writing.
Report it to the FTC at ReportFraud.ftc.gov and to your state attorney general. If a loan is involved, you can also file a complaint with the Consumer Financial Protection Bureau. Keep the contract, texts, emails and the salesperson's name.
How to choose a solar installer in 2026: check licenses and NABCEP certification, compare quotes per watt, read warranties and spot pressure tactics.
Solar lease vs PPA vs loan vs cash in 2026: how each works, 25-year costs, escalators, home-sale rules and what the end of the 25D credit changes.
How solar loans work in 2026: monthly payments, hidden dealer fees, the month-18 paydown trap and why loans built around the tax credit no longer fit.
Federal solar tax credit 2026: 25D ended for systems finished after 2025. See who can still claim, carryforwards, leases, PPAs and state credits.
