Solar Panel Fraud & Misrepresentation Demand Letters
Solar salespeople often make aggressive promises about energy savings, tax credits, and system performance that never materialize. This playbook helps you document misrepresentations, invoke consumer protection laws, and demand rescission or damages from deceptive solar companies.
Common Solar Fraud Schemes
Fraud Type
How It Works
Red Flags
Inflated savings projections
Salesperson promises 80-100% utility bill elimination using unrealistic production estimates
Projections based on optimal conditions, not your roof orientation or shading
Tax credit misrepresentation
Claiming everyone gets 30% back without explaining tax liability requirements
No discussion of whether you have sufficient federal tax liability
Bait-and-switch financing
Advertising low rates, then switching to high-interest dealer fees at signing
Final APR differs from quoted rate; hidden origination fees
System size manipulation
Installing fewer panels than quoted or using lower-efficiency equipment
Actual kW rating lower than contract specifications
Fake utility partnerships
Claiming to work with utility company to offer special programs
Utility has no record of partnership or program
Why Solar Fraud Is Pervasive
Commission-based salespeople incentivized to close at any cost
Complex technology that consumers struggle to evaluate
Long payback periods delay discovery of underperformance
Document the specific misrepresentations made during the sale
Demand contract rescission and removal of the system
Seek refund of payments plus damages for utility costs
Request removal of any liens filed on your property
Preserve claims for UDAP treble damages and attorney fees
Time-Sensitive: Many states have short statutes of limitation for fraud claims (2-4 years from discovery). Act quickly once you realize the system underperforms or the salesperson's promises were false.
Legal Framework for Solar Fraud Claims
FTC Enforcement Trends
The FTC has issued warning letters to solar companies for deceptive efficiency claims and false savings projections. Recent enforcement focuses on "green" marketing claims that lack substantiation.
The FTC Cooling-Off Rule (16 CFR 429) gives you three days to cancel door-to-door solar sales. Failure to provide proper cancellation notices is a separate violation.
Solar companies must have a "reasonable basis" for energy production and savings claims before making them. Many salespeople make promises without proper engineering analysis.
State UDAP/Consumer Protection Laws
California: Consumer Legal Remedies Act (CLRA) and Unfair Competition Law (UCL) provide treble damages and attorney fees for deceptive practices. The CSLB can revoke contractor licenses for fraud.
Texas: DTPA provides up to three times actual damages for knowing violations, plus mental anguish damages where applicable.
Florida: FDUTPA allows recovery of actual damages plus attorney fees. The state AG has brought actions against solar companies.
Arizona: Consumer Fraud Act covers solar misrepresentation with actual damages and possible punitive damages.
Contractor Licensing Requirements
State
Required License
Consequence of Unlicensed Work
California
C-10 Electrical or C-46 Solar
Contract voidable; no right to payment; criminal penalties
Arizona
CR-11 Electrical (Solar)
Civil penalties up to $2,500 per violation
Nevada
C-2G Photovoltaic
Contract void; recovery of all payments
Texas
Electrical contractor license
Violations of local ordinances; civil liability
Rescission Rights: If the solar company made material misrepresentations that induced you to sign, you may be entitled to complete rescission: removal of the system, refund of all payments, and release of any liens, restoring you to your pre-contract position.
Documentation Checklist
Sales Materials
Original sales presentation, proposals, or brochures
Written savings estimates with production projections
Email and text communications with salesperson
Any recordings of sales calls (if legal in your state)
Business cards, door hangers, or marketing materials
Contract Documents
Signed purchase or lease agreement
Financing documents with APR and fee disclosures
Equipment specifications and warranties
Notice of cancellation rights (or lack thereof)
Any addenda or change orders
Performance Evidence
Utility bills: Gather 12+ months of bills before installation and all bills after. Calculate actual savings versus promised savings.
Production data: Download reports from your inverter monitoring app (Enphase, SolarEdge, etc.) showing actual kWh produced.
Third-party analysis: Consider hiring an independent solar engineer to evaluate whether the system is performing to specifications.
Weather data: Obtain local solar irradiance data to show whether underperformance is due to equipment issues versus weather.
Licensing Verification
Check your state contractor licensing board for the installer's license status, bond, and any complaints or disciplinary actions.
Verify the salesperson's registration if your state requires solar salesperson licensing.
Document if the company that sold you the system differs from the company that installed it.
Tip: Request your complete customer file from the solar company under state privacy laws. This may reveal internal communications about your account, sales scripts, or performance projections they never shared with you.
Letter Strategy
Core Arguments
Fraudulent inducement: The salesperson made specific false statements about savings, tax credits, or system performance that induced you to sign the contract.
Negligent misrepresentation: Even without intent to deceive, the company had no reasonable basis for its savings projections.
UDAP violations: Deceptive trade practices under state consumer protection statutes, which often provide enhanced damages.
Breach of contract: The system fails to meet the specifications and performance guarantees in the contract.
Cooling-off violations: Failure to provide proper cancellation notices for door-to-door sales.
Specific Demands
Rescission: Cancel the contract, remove the system at company expense, refund all payments made.
Lien release: Record a release of any UCC filings or mechanics liens on your property.
Damages: Compensate for excess utility bills, time dealing with the dispute, and any property damage from installation.
Credit repair: If any negative reports were made to credit bureaus, correct them and provide documentation.
Leverage Points
Mention intent to file complaints with the state contractor licensing board, attorney general, and FTC.
Reference the company's volume of similar complaints on BBB, Yelp, or state AG databases.
Note that UDAP claims typically allow recovery of attorney fees, making litigation economically viable.
If PACE financing was used, mention the additional regulations and escrow requirements that apply.
Arbitration Clauses: Many solar contracts contain mandatory arbitration provisions. Your demand letter should still be sent, but be aware that litigation may need to proceed in arbitration rather than court.
Sample Solar Fraud Demand Letter
[Date]
Via Certified Mail and Email
[Solar Company Name]
[Address]
[City, State ZIP]
Re: Demand for Rescission - Fraudulent Misrepresentation
Customer: [Your Name]
Contract Date: [Date]
System Address: [Installation Address]
Dear Sir or Madam:
I represent [Customer Name] regarding the solar panel system your company sold and installed at the above address. This letter demands rescission of the contract based on material misrepresentations made during the sale.
FACTUAL BACKGROUND
On [Date], your salesperson [Name] visited my client's home and made the following representations:
1. The proposed 7.5 kW system would eliminate 90% of my client's electricity bill, reducing monthly costs from approximately $250 to under $25.
2. My client would receive a 30% federal tax credit of approximately $7,500, which would "come back as a refund."
3. The system would produce approximately 12,000 kWh annually based on "guaranteed production estimates."
Relying on these representations, my client signed a purchase agreement for $25,000, financed through [Lender] at [X]% APR.
THE MISREPRESENTATIONS WERE FALSE
After 12 months of operation, the facts demonstrate your salesperson's statements were materially false:
1. SAVINGS: My client's average monthly electricity bill has decreased only from $250 to $180, a 28% reduction, not the promised 90%. Actual annual savings are approximately $840, not the $2,700 promised.
2. TAX CREDIT: Your salesperson failed to explain that the Investment Tax Credit reduces tax liability, not refund amounts. My client's federal tax liability is only $3,200 annually, making the full $7,500 credit impossible to claim in one year.
3. PRODUCTION: According to the Enphase monitoring system, the panels produced only 8,400 kWh in the first year, 30% below the "guaranteed" 12,000 kWh estimate. Weather data confirms this was not due to unusual cloud cover.
LEGAL CLAIMS
These misrepresentations violate:
- [State] Consumer Protection Act, [Citation], prohibiting unfair and deceptive trade practices
- Common law fraud and negligent misrepresentation
- FTC regulations requiring substantiation of savings claims
- [State] contractor licensing requirements regarding truthful advertising
Under [State] law, prevailing consumers are entitled to actual damages, treble damages for willful violations, and reasonable attorney fees.
DEMANDS
Within fourteen (14) days of this letter, [Solar Company] must:
1. Agree to rescind the contract and remove the solar panel system at your expense;
2. Refund all payments made by my client, totaling $[Amount];
3. Pay the balance owed to [Lender] and release my client from the financing agreement;
4. Record a release of any UCC financing statements or liens on my client's property;
5. Compensate my client $[Amount] for excess utility costs incurred due to system underperformance.
If you fail to respond or refuse to resolve this matter, my client will file complaints with the [State] Contractors State License Board, [State] Attorney General's Consumer Protection Division, and the Federal Trade Commission. We will also pursue all available legal remedies, including statutory damages and attorney fees.
Contact me at [email/phone] to discuss resolution.
Sincerely,
[Attorney Name]
[Firm Name]
[Address]
[Phone]
[Email]
cc: [State] Contractors State License Board
[State] Attorney General - Consumer Protection
If the installer is defunct, you may have claims against the financing company if it was integrated with the sales process, the equipment manufacturer for warranty claims, or the contractor's bond if still valid. Some states have recovery funds for contractor fraud.
Be cautious about stopping payments, as this can damage your credit and trigger collection actions. If you financed through a third party, they may not be liable for the installer's fraud. Consult an attorney about escrow arrangements or formal dispute procedures before withholding payment.
Attorney Services & Contact
Solar Fraud Representation
I represent homeowners who were deceived by solar salespeople into purchasing underperforming or overpriced systems. Cases involving clear misrepresentation and documented underperformance are strong candidates for rescission or damages.
Email owner@terms.law or use Calendly for a paid strategy session.