Solar Sales Pitches: Red Flags to Watch For Before You Sign

The knock comes on a Saturday afternoon. A friendly rep says your neighbors are “going solar for free,” there’s a government program ending soon and you can sign on a tablet in 10 minutes. Your electric bill, they promise, will basically disappear.

Some solar companies are honest and do excellent work. But residential solar is a big-ticket, long-term purchase, often sold door to door, and federal regulators have flagged serious problems with how some systems are sold and financed. Since the federal homeowner solar tax credit ended for 2026 purchases, some pitches have also become outdated or flat-out wrong.

Use this checklist to spot the warning signs before you sign anything.

The quick red flag checklist

Key takeaway: If a pitch depends on “free,” “government,” “guaranteed” or “today only,” slow down. Ask for everything in writing, verify claims with your utility and state, and compare at least 3 quotes.

Red flags in the sales pitch

The first 3 warning signs show up in what the salesperson promises.

Red flag 1: “Free solar” and “no cost” offers

Solar panels aren’t free. When a salesperson says “free” or “no money down,” they usually mean one of these:

• A lease: You pay a monthly fee to use panels the company owns.
• A power purchase agreement (PPA): You buy the electricity the panels produce at a set rate per kWh.
• A loan: You own the system but pay it off over 10 to 25 years.

None of these is a scam on its own. The problem is misrepresentation. The Federal Trade Commission (FTC) warns that lease payments can increase over time and that, with a lease or PPA, you don’t own the system and generally can’t claim tax credits or other incentives. Ask for the total amount you’ll pay over the full contract, any annual escalator, and what happens if you sell your home. Our comparison of solar lease vs loan vs cash explains the trade-offs.

Red flag 2: Fake government or utility programs

Be suspicious of anyone who claims to represent a “federal solar program,” a “state stimulus program” or your utility. Common versions include:

• “The government is paying for solar in your neighborhood.”
• “Your utility is upgrading homes to solar.”
• “You’ve been pre-approved for a no-cost energy program.”

Real public programs exist, such as state rebates, low-income solar programs and community solar. But you can verify them independently. Call your utility using the number on your bill, check your state energy office’s website, and never rely on a phone number or website the salesperson gives you.

Red flag 3: Outdated or misleading tax credit claims

This is the biggest red flag for 2026. The budget law signed on July 4, 2025, ended the Residential Clean Energy Credit (Section 25D) early. The IRS says the credit isn’t allowed for expenditures made after December 31, 2025. If you buy a system in 2026, there’s no federal homeowner solar credit to claim.

Even before that change, regulators flagged problems with tax credit pitches. In an August 2024 report, the Consumer Financial Protection Bureau (CFPB) found that lenders often presented loan amounts as a “net cost” that assumed the borrower would receive the credit. Some loans required a large prepayment equal to the expected credit by a set date, and borrowers who didn’t qualify could face much higher monthly payments.

Third-party-owned systems (leases and PPAs) may still involve business tax credits claimed by the company, under different rules. Ask exactly who claims any credit and whether any of it lowers your price. This is not legal or tax advice; check with a tax professional. Our guide on whether solar is still worth it after the tax credit changes runs the numbers.

Red flags in the numbers and the paperwork

The next 3 warning signs hide in savings estimates, the signing process and the financing.

Red flag 4: Guaranteed savings and “$0 electric bills”

Savings estimates depend on assumptions. Watch for:

• Big assumed utility rate increases. The FTC notes it’s hard to predict future utility rates. A projection that assumes steep annual increases makes solar look better.
• Outdated net metering assumptions. Many utilities now pay less for exported power. Our explainer on net metering and why utilities are changing it covers this.
• “Your bill will be zero.” Most grid-connected homes still pay fixed monthly charges, and production varies with seasons and weather.
• Optimistic production estimates that ignore shade, roof direction or panel degradation.

Ask the salesperson to show the rate increase, export rate and production numbers they used. If they offer a production guarantee, make sure it’s in the contract with clear terms for what happens if the system underperforms.

Red flag 5: Pressure tactics and rushed signing

The FTC advises never to deal with a home improvement or power company that pressures you for a quick decision. Common tactics:

• “This price is only good today.”
• “We only have a few installation spots in your area.”
• Asking you to sign on a tablet while scrolling quickly past pages.
• Discouraging you from talking to family, getting other quotes or reading the full contract.
• Asking for personal information “just to check if you qualify,” then running a credit application.

A legitimate company will leave you a written proposal and the complete contract to review.

Red flag 6: Loans with hidden dealer fees

The CFPB’s 2024 report found many solar loans include “dealer fees,” markups built into the loan principal that often increase the loan cost by 30% or more above the cash price, and that these are often not reflected in the stated APR. They may also be called platform fees or program fees.

How to spot it:

1. Ask for the cash price of the system.
2. Compare it with the total loan amount.
3. If the loan amount is much higher, ask what the difference is for.
4. Compare the offer with a loan from your own bank or credit union.

A “1.99% APR” can cost more than a higher-rate loan if the principal is inflated. See how much solar panels cost to sanity-check the price.

Contract terms to question before signing

Read the full contract, not the summary. The FTC recommends checking that the terms match what the company’s ads, proposals and salespeople told you. Look for:

• Total cost over the life of the contract, including interest and fees.
• Payment escalators in leases and PPAs.
• Production guarantee and what happens if it’s missed.
• Warranties for panels, inverters, workmanship and roof penetrations.
• Who maintains and insures the system, and who pays for removal and reinstallation if you replace your roof.
• Home sale terms: whether the contract transfers to a buyer and what happens if the buyer won’t take it over.
• Liens: whether the lender or leasing company files anything against your property. The FTC warns that PACE financing, repaid through property taxes, can take priority over your mortgage.
• Early termination fees and cancellation terms.
• Interconnection and permits: who handles them, and what happens if your utility doesn’t approve the system.

Your right to cancel

The FTC’s Cooling-Off Rule gives you until midnight of the third business day after the sale to cancel certain sales made at your home for $25 or more, or at temporary locations for $130 or more, and get a full refund. Saturdays count as business days; Sundays and federal holidays don’t.

The seller must tell you about your right to cancel and give you 2 copies of a cancellation form. To cancel, sign and date one copy and mail it to the address given, postmarked before the deadline. The FTC suggests certified mail with a return receipt. Some states give additional cancellation rights for home solicitation or solar contracts, so check with your state attorney general. This is not legal advice.

Where to start: how to buy solar safely

1. Get at least 3 written quotes with system size, expected production, total installed price, warranties and financing terms.
2. Check licenses with your state contractor licensing board and search the company name with “complaints.”
3. Confirm your utility’s export rules and your eligibility for any local rebates.
4. Compare financing with your own bank or credit union, and compare loan amounts to the cash price.
5. Read the full contract at home, not on a tablet at the door.
6. Keep copies of every proposal, contract and message.

If something has already gone wrong, our guides on how to report a scam and what to do if you got scammed walk you through next steps. You can report solar sales problems to the FTC at ReportFraud.ftc.gov, to your state attorney general and, for loan issues, to the CFPB.

The bottom line

Solar can be a good investment, but only when the price, financing and savings assumptions hold up. Be wary of “free,” “government,” “guaranteed” and “today only,” and especially of any 2026 pitch that promises a 30% federal homeowner tax credit. Take your time, get competing quotes, verify every claim independently and know your cancellation rights before you sign.

Sources

• FTC: Solar power for your home — pressure tactics, leases and PPAs, contract terms, PACE liens, quotes, licensing and reporting
• FTC: Buyer’s remorse, the FTC’s Cooling-Off Rule — 3-business-day cancellation right, thresholds and how to cancel
• CFPB: Report finds lenders cramming markup fees and confusing terms into solar energy loans — dealer fees, “net cost” tax credit presentations and prepayment terms
• IRS: FAQs on modifications to sections 25C, 25D and other energy credits under Public Law 119-21 — residential clean energy credit not allowed for expenditures after December 31, 2025