7 Signs Your Solar Contract Is Unfair

Solar energy promises savings and sustainability, but not all solar contracts deliver on these promises. Many homeowners discover too late that they've signed an agreement that benefits the solar company far more than themselves. Here are seven red flags that indicate your solar contract may be unfair.

1. Aggressive Annual Escalators

If your contract includes annual rate increases of 2.9% or higher, you could end up paying more for solar than traditional utility rates within just a few years. Some contracts lock you into escalators that compound dramatically over a 20-25 year term.

2. Misleading Savings Projections

Were you shown projections that promised dramatic savings? Many solar salespeople use unrealistic utility rate increase assumptions (5-7% annually) to make solar look like a better deal than it actually is.

3. Hidden Transfer Fees

Planning to sell your home? Some contracts include thousands of dollars in transfer fees, or require the new buyer to qualify for and assume the solar agreement—which can kill a home sale.

4. Excessive Buyout Amounts

If your contract requires you to pay the full remaining value of the system to exit early, that's a major red flag. Some buyout clauses can exceed $30,000 or more.

5. No Performance Guarantees

Quality solar contracts include production guarantees. If your contract doesn't guarantee a minimum energy output, you could be stuck paying for a system that underperforms.

6. Automatic Renewal Clauses

Some contracts automatically renew for additional terms unless you provide notice within a narrow window. This can extend your obligation for years without your active consent.

7. Pressure Tactics During Signing

If you were pressured to sign quickly, told the deal would expire soon, or not given adequate time to review the contract, these are signs of predatory sales practices that may give you grounds to exit.