Before signing a solar contract, watch for these 10 red flags that indicate predatory practices. Our attorneys have reviewed thousands of solar contracts and these warning signs appear in the vast majority of problematic agreements.
1. No Written Contract Before Installation Begins
A legitimate solar company will always provide a detailed written contract before any work starts. If they're pushing you to "just get started" without paperwork, walk away immediately.
2. Pressure to Sign "Today Only" Deals
High-pressure sales tactics are a hallmark of predatory solar companies. Legitimate offers don't expire overnight. Any company that won't give you time to review the contract is hiding something.
3. Savings Guarantees That Seem Too Good
If a solar company promises to eliminate your electric bill entirely or guarantees specific dollar savings, be skeptical. Solar savings depend on many variables including weather, utility rates, and system performance.
4. Hidden Escalator Clauses in Leases
Many solar leases include annual payment increases of 2.9-3.9%. Over 25 years, this can double your monthly payment. If the salesperson doesn't clearly explain escalator clauses, it's a major red flag.
5. Misrepresenting Tax Credits as "Rebates"
The federal solar tax credit is a tax credit, not a cash rebate. You must have sufficient tax liability to claim it. Salespeople who call it a "government rebate" or "guaranteed refund" are being deceptive.
6. No Mention of Permit Requirements
Solar installations require local building permits and utility interconnection agreements. A company that doesn't discuss permits is either cutting corners or planning to install without proper authorization.
7. Vague or Missing Warranty Terms
A reputable solar company provides clear warranty documentation covering panels (25 years), inverters (10-25 years), and workmanship (10+ years). If warranty terms are vague or verbal-only, don't sign.
8. Requiring Large Upfront Deposits
While some deposit is normal, demanding more than 10-20% upfront before any work begins is a red flag. Never pay the full amount before installation is complete and inspected.
9. No Site Assessment Before Quoting
A proper solar installation requires a detailed site assessment including roof condition, shading analysis, and electrical panel evaluation. Any company that quotes a price without visiting your home is guessing.
10. The Company Has No Physical Office
Check if the solar company has a real physical location, proper licensing, and insurance. Many fly-by-night operations use P.O. boxes and disappear after installation, leaving you with no recourse for warranty claims.
Already Signed a Bad Solar Contract?
If you've identified any of these red flags in your existing solar contract, you may have grounds to cancel. Our attorneys offer free contract reviews.