Solar contract red flags: what should make you walk away
Solar deals rarely go wrong because of the panels. They go wrong in the contract: the term you didn't read, the fee nobody mentioned, the promise that never made it onto paper. The good news is that the warning signs are consistent, and federal and state regulators have spelled most of them out. Here are the ones that should make you slow down or walk away.
Red flags in how they sell
Pressure is the first tell. 'Sign today or lose this price,' a quote that expires in 24 hours, or a salesperson who won't leave without a signature are all designed to short-circuit the comparison you're entitled to make. The FTC is blunt that you should never let yourself be rushed, and that 'free' or 'no cost' solar offers are a scam.[1][3]
Solar is real and often a good deal, but nobody is installing it on your roof for free. If the pitch leans on urgency or a too-good-to-be-true headline instead of a clear written proposal, that's information about the seller.
Red flags in the numbers
Watch the money closely. A savings claim with no written production estimate behind it is a guess dressed up as a promise. And the financing can hide more than the hardware: the CFPB found that some solar lenders buried markups and fees that pushed the amount owed 30 percent or more above the cash price, alongside ballooning payments and misleading claims about what homeowners would actually pay.[2]
Ask for the cash price and the financed price side by side. If the financed number is dramatically higher and nobody can explain the gap, you've likely found a dealer fee they didn't want to discuss.
Red flags in the paperwork
The contract itself is where the rest hide. Verbal promises that never appear in the signed document don't exist, full stop. 'Or equivalent' clauses let a cheaper panel land on your roof than the one you were sold. A fair-market-value buyout buried in a lease can be brutally expensive in the early years. And missing license or permit details are a sign the basics may not be handled.[1]
None of these is automatically fraud, but each one is a reason to stop, ask for it in writing, and not sign until it's resolved.
What to do right now
If it needs to go further
If you've already signed and then spot a real problem, a forged signature, terms you were never shown, or work done without permits, that crosses from red flag into consumer-protection territory. File with the Connecticut Department of Consumer Protection or the New York Attorney General, and keep written records of everything. State regulators have actively pursued solar companies over exactly these practices.
A good solar contract survives scrutiny. A bad one relies on you not looking too hard. If a proposal is setting off any of these alarms, send it to us before you sign. We'll read it with you, flag what's off, and tell you honestly whether it's fixable or worth walking away from.
This is a starting guide, not legal advice. For contract disputes, confirm your specific terms and consider the consumer-protection resources in your state.
Sources
- Federal Trade Commission, "Solar Power for Your Home" (evaluating companies and what to confirm before you sign). consumer.ftc.gov
- Consumer Financial Protection Bureau, "Issue Spotlight: Solar Financing" (August 2024) (hidden markups and fees of 30 percent or more, ballooning payments, and misleading cost claims). consumerfinance.gov
- Federal Trade Commission, "How to avoid getting burned by solar or clean energy scams" (pressure tactics and why 'free' or 'no cost' offers are scams). consumer.ftc.gov
- Connecticut Department of Consumer Protection, "File a consumer complaint." portal.ct.gov/dcp