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When Texas Attorney General Ken Paxton filed a lawsuit against a solar panel installation company in May 2026, it was not the first indication of problems in the solar energy industry. Nearly four years earlier, a coalition of nine AGs, led by Kentucky Attorney General Daniel Cameron, launched an initiative asking institutions providing financing for home solar projects to suspend payments due to system failures and underperformance. A letter sent to lenders by the coalition explained that one particular solar installation company had “misrepresented the availability of and/or consumers’ eligibility for state or federal tax credits.”
Yet the indications that consumers were being misled by those selling solar energy systems and solar leases, along with the media attention complaints against solar companies and third-party installers attracted, haven’t seemed to prevent the problems from continuing. As Paxton’s recent lawsuit reveals, consumers continue to fall prey to sales pitches that promise, but don’t deliver, big tax credits and significant savings on utility bills.
“Thousands were promised savings, lower bills, and easy financing only to end up with rising costs, hidden fees, and contracts that feel impossible to escape,” says Josie Garcia, Chief Operating Officer and Vice President of Client Services of Solar Equity Solutions. “It’s a costly and ongoing problem that hasn’t gone away despite years of complaints.”
Solar Equity Solutions is a leader in residential solar consumer advocacy and legal support, and provides homeowners with guidance and assistance in navigating complex, misleading, or burdensome solar contracts. Garcia leads operations and client experience with a strong focus on accountability, collaboration, and homeowner advocacy. Garcia 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.
“The lawsuit filed in Texas, which is not the first of its kind, shows consumers seeking to take advantage of renewable energy must be on the lookout for fraudulent and deceptive practices,” Garcia says. “Going solar in a way that truly delivers savings requires learning to identify the red flags in power purchase agreements and other long-term contracts.”
Beware of escalator clauses in solar power purchase agreements
Lowering your monthly energy bill by going off-grid is one of the biggest selling points of a solar system. And the standard power purchase agreement (PPA) that most solar salespeople offer allows consumers to achieve that goal — at least at first. But if solar PPA contracts include an escalator clause, it could actually lead to higher bills over time.
“Contracts that include an escalator clause raise monthly payments by a fixed percentage over the course of the contract,” Garcia explains. “The increase happens automatically, is typically 1% to 3% per year, and is often hidden in the fine print. Once a contract is signed, the annual increase is locked in and can’t be paused or reversed without legally challenging or canceling the contract.”
Because solar contracts are typically long-term, lasting as long as the average home mortgage, even a very small annual escalation can translate to heavy losses over time. If payments start at $130 per month, for example, but include a 2.9% annual increase, consumers can end up paying twice that amount per month as they near the end of a 25-year contract.
“Homeowners looking for a way to lower their monthly living expenses can be drawn in by a PPA, believing they’ll get the benefits of solar without the upfront capital costs that come with purchasing and installing a system,” Garcia says. “But an escalator clause will eventually erase the savings they were hoping to achieve.”
Avoid solar contracts with equipment liens if you plan to sell your house soon
Leasing solar panels rather than signing a PPA avoids the problems that come with escalator clauses. But consumers who choose that route need to carefully review lien language in contracts.
“Contracts commonly commit those leasing solar panels to conditions in which the solar company holds a solar UCC-1 lien against the home where the panels are installed,” Garcia warns. “The lien is designed to secure the unpaid balance on the lease agreement if the home is sold.”
Consumers can typically find lien language in contract sections labeled “Equipment Lien,” “UCC Filing,” or “Security Interest.” In most cases, solar liens remain effective unless the contract is canceled, the loan is paid off, or the consumer receives a UCC-3 termination statement from the lender.
“Solar liens often come as a surprise because they don’t surface until you attempt to sell your home,” Garcia says. “At that point, the complications of a UCC-1 lien can either stall or completely derail the sales process.”
In a season when consumers are seeing a steady increase in electricity prices, any product that promises to lower bills is hard to ignore. But before jumping into a monthly solar contract, consumers need to be aware that their solar contract terms — not the sales pitch — hold the truth about the electricity savings they can expect. Carefully reviewing contracts for details such as escalator clauses and solar liens can reveal red flags that salespeople aren’t telling the whole story.
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