The pitch starts at your front door. Someone friendly says solar will cut your power bill, and financing is already lined up. You have not asked for a loan. You may still be holding a tablet and a pen ten minutes later. This guide walks through how these pitches tend to work and where the numbers can hide.

How solar financing pitches typically work

The CFPB says residential solar sales and financing are growing. Panel costs have fallen, and government incentives, including tax credits, have added fuel. Solar made up 55% of new electricity-generating capacity added to the U.S. grid in 2023, up from 23% in 2018. Where there is growth, there are sales teams.

The usual setup is simple. A lender partners with a solar installer. The loan is offered at the point of sale, often after a door-to-door pitch. The CFPB has said door-to-door sales of solar-related financial products have become more common.

The catch is order. You may see the monthly payment first. The cash price, the fees and the full loan balance can come later, or not at all. That makes offers hard to compare. A low payment can sit on top of a large balance.

Markups and fees that inflate the loan

The CFPB found that some lenders add markups and fees that raise the loan principal by 30 percent or more above the cash price of the installed system. That is not a rounding error.

Industry sources often call these markups "dealer fees." Lenders often fold them into the principal. The loan does not show them as a markup over the total cash price. You see one number. You do not see how much of it is extra.

One habit helps. Ask for the cash price of the exact same system. Then compare it with the amount financed. If the loan is well above the cash price and the gap is not clearly labeled, ask about it before you sign. Ask in writing if you can.

Tax credit claims and misrepresented savings

Many pitches cite the 30 percent federal Investment Tax Credit as if every buyer gets it. The CFPB notes the credit is not guaranteed. It depends on your federal tax liability.

Whether a credit applies to your household is a question for a qualified tax professional. This guide cannot answer it. What you can do is notice when a seller treats it as a sure thing.

The CFPB also reports that some solar lenders misrepresent energy savings and mislead homeowners about loan terms and costs. A savings estimate with no stated assumptions is just a number. Ask what it is based on.

Red flags and questions to ask

The sources describe risks. They do not hand over a formal checklist. Here is a reading of the red flags that appear in the CFPB material, in the order to check them.

  1. Compare the loan to the cash price. A principal well above the cash price of the installed system is the first flag.
  2. Look for unlabeled fees. If fees are not shown as a markup, ask what they are.
  3. Check the tax credit language. Any claim that the 30 percent credit is guaranteed or universal is a warning sign.
A homeowner's hand holds a pen over a kitchen table where a written solar cash-price quote sits beside a separate loan offer, in bright daylight.
A homeowner at a kitchen table comparing a solar loan offer with a written cash price quote, pen in hand
  1. Test the savings claim. Misrepresented energy savings show up in the CFPB findings. Ask for the math.
  2. Note how you were approached. Door-to-door sales of solar financing appear on the list.
  3. Watch the clock. Pressure to sign today, or reluctance to put cash price, loan amount and fees in writing, fits the consumer protection concerns above. The sources do not name it directly, so treat it as a general sign.

If you spot one, pause. Do not sign. Ask for the numbers on paper and take time to read them.

Where to find more and what remains unclear

The FTC publishes guidance on solar and clean-energy scams and a page on home repair scams. Read them directly. The text of some linked materials was not readable for this summary, so details may differ from what is covered here.

The CFPB lays out its findings in its solar financing issue spotlight. The Treasury, CFPB and FTC also announced joint steps to protect residential solar consumers. The sources here do not detail those steps.

Some gaps remain. This guide does not cover your rights to cancel or dispute a loan, or how to file a complaint with the CFPB or FTC. It also does not cover contractor-arranged loans for other home improvements. If you face a specific contract, start with the regulators' consumer pages or talk to a qualified legal professional.

Please seek a professional. This article is general information, not financial, tax or insurance advice. Please seek a licensed financial, tax or insurance professional about your own situation.