By Josie Garcia, Chief Operating Officer & Vice President of Client Services – Solar Equity Solutions
With electricity prices rising nationwide, the savings promised by solar energy systems have become very attractive to US homeowners. But government officials in a number of states are now warning homeowners that some of the companies offering solar systems aren’t making good on their promises.
In late 2025, the Attorney General of the District of Columbia issued a consumer alert that warned of “predatory practices in the home solar system sales and loan industry.” In April 2026, the Attorney General of Texas launched a major initiative targeting solar energy scams, including investigations into violations of the Deceptive Trade Practices-Consumer Protection Act. And in Florida, the Attorney General recently issued a guide for homeowners called “Scams at a Glance: The Dark Side of Solar.”
A growing number of state officials are warning homeowners about misleading solar sales practices, as the industry has developed a bad reputation for bait-and-switch financing and systems that often fall short of consumer expectations. As NPR recently reported, prosecutors across the US are investigating misleading financing structures and high-pressure sales tactics used by companies to convince consumers to commit to costly solar energy contracts.
The must-have elements that all solar contracts should include
It’s easy to get caught up in a solar energy system sales pitch, especially when salespeople are promising huge savings from a system that can be completely paid for by government tax credits. But homeowners must carefully review contracts to make sure they include certain key elements.
A system overview with detailed specifications is one element that should be included in the contract. Look for information on the panel and inverter brands, size in kilowatts, and expected output. Contracts should also explain the warranties and guarantees for equipment, including performance coverage, installation coverage, and maintenance responsibilities.
Financial responsibilities are another key element homeowners should fully understand before signing a solar contract. Total cost after incentives, escalator clauses, and monthly payments for financed or leased systems are factors that should be included. Contracts should also clearly spell out the financial implications of what-ifs, such as fees charged for early termination or transferability options when the house is sold.
It’s critical not to rush into a solar energy system contract, no matter how immediate the deadline or enticing the deal. Make sure everything is in writing and every line of the contract is understood before anything is signed.
The red flags that typically lead to contract disputes
In addition to looking for must-have elements, homeowners should also scour solar energy system contracts for elements that could lead to contract disputes. As the growing number of legal settlements against solar companies reveals, many contracts include language designed to protect the solar company and not the homeowner.
Vague “savings estimates” with no baseline measurement are one element that can clearly reveal a sketchy contract. Guidance provided by the Attorney General’s Office for the District of Columbia advises consumers to ask salespeople for “a written explanation that describes the total cost of the loan compared to the projected energy savings.” It also recommends that consumers receive a written explanation before signing a contract.
Consumers should watch for performance guarantees that don’t include enforcement mechanisms. If a contract states homeowners will experience 40% savings on their electric bill, for example, it should also include financial recourse for the homeowner if that level of savings is not achieved.
Other contract red flags include:
Annual escalators, which can commit homeowners to a 3% to 5% yearly price increase.
Early termination fees, which can exceed $15,000.
Transfer penalties that affect homeowners or trap them in contracts if they sell their home.
It’s common for homeowners who aren’t on the lookout for problems to be surprised by these issues two to three years in, when they realize the savings they were promised haven’t materialized and their payments keep climbing. At that point, homeowners often learn that cancelling their contract will cost them more than sticking with it.
Key steps to take if you feel you were misled by a solar energy company
While there are steps you can take to exit a solar lease legally, it will require proving that the company that sold you the system failed to meet their obligations. To start the process, gather records that will back up your case, including the original lease contract, payment history, output records, sales papers, marketing materials, and emails and texts exchanged with the company during the sales process.
Your records will allow you to compare the actual benefits of the system with what you were promised. If the savings were overstated or the system produces less power than promised, show the gap with real numbers. You may also be able to get contracts cancelled if the system installation caused roof damage, the tax credits were not what they were promised to be, or key facts were left out of the contract.
The fact that law enforcement officials around the country are drawing attention to problems with solar contracts is encouraging for victims of misrepresentation or predatory practices, but it still doesn’t guarantee that consumer costs will be recovered. If you think you were misled, act fast by gathering proof and starting a conversation with the solar company. If you get resistance, you may need to involve a company that specializes in cancelling unfair solar contracts.
If you’re shopping for a solar contract, carefully review the details of the contract before signing anything. Make sure that must-haves are included and red flags are avoided, or you could find yourself trapped in a contract that costs you more than it saves.
– Josie Garcia is the Chief Operating Officer and Vice President of Client Services at Solar Equity Solutions, where she leads operations and client experience with a strong focus on accountability, collaboration, and homeowner advocacy. Originally from San Jose, California, and now based in Houston, she brings a resilient, solutions-driven approach to helping clients navigate complex and often stressful solar contract issues. Josie is known for prioritizing clear communication, transparency, and trust, and she is committed to building client-first systems that deliver clarity, professionalism, and meaningful results in a legally sensitive industry.
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