Tips for Getting a Good Solar Panel Deal

Rooftop solar panels are becoming more and more common. And, as consumers become more knowledgeable, it's harder for bad actors to take advantage of them. That's good for everyone involved.

If you're looking to add solar panels to your home, arming yourself with a bit more knowledge can help you get the best solar panel deal for you. Here are some red flags — and outright scams — to avoid, so you can fully enjoy the benefits of solar panels.

What Are Solar Panel Scams?

The right salesperson will do a good job helping customers find the answers to their questions and teaching them about the product.

Unfortunately, not every solar salesperson has been honest. Fake companies, “free” solar panels, bogus claims about rebates or money back, and even people trying to commit identity theft are some of the dishonest practices hurting customers.

Fake solar companies

In the past, companies have popped up just long enough to sell a few solar systems and disappear with their customers' money. If you’ve never heard of a company before, research them before handing over any money.

High pressure sales tactics

There are a few red flags to look for when a solar salesperson is at your front door or in your email box. 

Reputable solar companies will gather information about your roof and property from you, with a visual inspection, or using satellite imagery. Not every roof is suitable for solar panels, and a salesperson who doesn’t confirm that may not care whether solar actually works out for you.

If you’re pressured for a social security number, private bank information, or other personal information to “move forward today,” this is not a reputable business or practice. This could even be an identity theft scam. 

Another high-pressure ploy of a scammy company is pushing you to commit to a contract now before you lose a deal. Having only one choice of solar panel and other system components is another sign of a person more interested in selling any system than selling one that fits your needs.

Free solar panels

You should carefully examine any promise of free solar panels or solar panels you’ll be paid for. 

Leases or solar power purchase agreements (PPAs), like Palmetto’s LightReach, are legitimate options that don’t have upfront payments, but include ongoing monthly payments. 

You should receive clear answers about the terms of such an agreement, including payments and timelines. This includes giving you all the time you need to understand the proposed system. 

If a salesperson says that you won’t pay anything for solar panels, either upfront or in monthly payments going forward, they might be promising more than they can deliver.

“Your utility company will pay you”

Home solar panels can deliver significant savings in many cases, but there are fewer instances where they’ll deliver significant passive income.

While some states and utility companies offer programs like solar renewable energy certificates (SRECs) and net metering, which compensate you for the electricity your panels produce, make sure you understand what this will mean financially before committing to a home solar system. In some places, net metering credits are never paid out in cash, and SREC values vary widely by state. 

With net metering or increasingly common alternatives like net billing, customers receive credits for the solar energy they send to the grid to cover the grid electricity they draw from it. You can save money on your monthly utility bill, but making money from the utility company is unlikely or minimal.

“The government will pay you”

The claim that the government will pay you for solar panels or solar energy may be a lazy or deceptive way of talking about the Residential Clean Energy Credit, commonly known as the Federal Solar Tax Credit. This is not the government paying you for solar. It’s a tax credit you may qualify for after installing solar or other clean energy equipment or devices at home. If your project qualifies, you reduce your tax liability by 30% of the cost of your system. You might receive a refund for the taxes you already paid, but if you don’t have a tax liability, the IRS won’t cut you a check. 

The tax credit applies through the end of 2025.

You can report any kind of suspected fraud or scam, whether it’s from a business, an individual, in person, or via phone or online, to the Federal Trade Commission and the FTC’s reporting site. 

Misleading contracts

Part of the high-pressure rush to sell solar panels is pushing a contract immediately. 

If an employee won’t patiently walk you through everything on a contract, it’s a red flag. The same goes if the salesperson won’t give you the time you need to read the contract or answer your questions, it’s a red flag. Make sure you understand the maintenance responsibilities, warranties or guarantees, and your recourse if something goes wrong before committing. 

Whether talking about buying or leasing a system, you should understand the entire agreement before signing it. The National Renewable Energy Laboratory has a few good questions to ask about any contract, like these.

1. How long is the contract?

2. Who owns the solar panels?

3. What happens if I want to sell my house?

4. What happens if the panels are damaged and need repair?

5. Is there a minimum production guarantee?

6. Who gets to claim state and federal solar incentives?

Avoiding a Solar Panel Scam

Doing your own research and getting information from multiple sources means you’ll make a better decision. Make sure you understand the short-term and long-term financial implications before you commit to anything.

Work with a reputable company

Solar panels are often a decades-long commitment. If the first meeting or conversation with the company is sketchy or feels like you aren’t getting straight answers, what’s it going to be like 25 years into the relationship? There are plenty of resources to help you get an idea.

Better Business Bureau ratings and grades, customer reviews, and consumer news sites such as CBS Marketwatch (which just so happens to rate Palmetto as Overall Top Pick and Best for Protection Plans) provide helpful comparisons. Trusted professional resources include the Interstate Renewable Energy Council’s (IREC) solar licensing database.

Understand the incentives available to you

Knowing the incentives you qualify for is much safer than relying on a salesperson’s promises. 

Federal, state, and local incentives may be available. Some are tax credits; some are bill credits from a utility company, and others are rebates. NC State University has a thorough searchable database of incentive programs nationwide. 

A reputable company can help you understand incentives, but you should consult an independent tax professional when it comes to your eligibility for tax credits and other incentives.

Know your utility’s policies

No one likes reading the fine print. But going solar with an understanding of how programs like net metering will work for you can help you spot bad quotes or deals.

Net metering may vary by utility company within the same state and, like California's, policies may have changed over the years. 

The easiest way to see if your solar energy system will be eligible for net metering is to contact or visit the website of your local electric utility.

Then, it’s important to know the utility’s fees and charges you’ll pay even with solar. Even if you use no utility company electricity in a month, or if your credits pay the electricity usage down to zero, you may get a bill with some fees to pay.

Know what “free” means

There are legitimate agreements, like leases and power purchase agreements, that see panels installed on your property for no money down. There are incentives and rebates which bring the cost of purchases down. Neither of these are the same as “free solar panels.”

Even with a legitimate lease or PPA, it’s critical to read and understand all the terms of the agreement before signing.

Talk to friends and neighbors

It sounds old-fashioned, but a really valuable source of information is your friends or neighbors who have gone solar. You are likely talking to someone who had many of the same questions. Plus, they live in the same area and likely have the same utility. 

Resources for Avoiding Scams

Plenty of sites, organizations, and databases provide good information and help for consumers.

Solar Energy Industries Association: SEIA has consumer guides, model lease and PPA agreements, and other educational resources.

National Renewable Energy Laboratory: The NREL has research and data for consumers and specific solar consumer protection information. 

Interstate Renewable Energy Council: The IREC has a solar licensing database searchable by state to help you find licensed, certified professionals, plus more resources and news.

North American Board of Certified Energy Practitioners: The NABCEP has a professional directory of credentialed installers and professionals.

Database of State Incentives for Renewables and Efficiency: A searchable site for state and local solar and clean energy incentive programs.

IRS: Has information about the Residential Clean Energy Property Credits and Form 5695.

Federal Trade Commission: You can report fraud, and the information will go to the right law enforcement agency.

Solar’s Legitimate Benefits

Bad actors in the solar business don't diminish the legitimate benefits of solar. 

Understanding the up-front and long-term financial picture should be a major aspect of your decision. Knowing the estimated payback period of a new residential solar system is important before committing to any plan or installation. An honest company should walk you through how your electric bill will change, net metering programs, your estimated payback period, and more.

A good deal for solar panels can deliver decades of savings. See what you could save with Palmetto's solar savings estimator.

Solar Panel Scam FAQs

Are solar companies ripping you off?

Home solar is expected to grow by nearly a million homes a year from now to 2030, so there are good companies and actors, and, unfortunately, some bad ones, too. Be wary of anyone pressuring you to make a major financial decision, exaggerating claims, and not giving you satisfying answers. Bad actors that sell bad solar deals to make a quick buck, hurt homeowners and reputable companies both. 

Are solar panels legitimate?

Yes. Solar panels and the electricity they generate are legitimate. They are used by millions of people around the world.

Will solar panels eliminate my electric bill?

Solar panels can, depending on multiple factors, reduce your electric bill, perhaps all the way to zero. In some cases, even if you cover your electricity use with solar and net metering, you could get a bill for fixed fees and charges from the utility company.