What we verified in “Solar panels and PACE loans: risks and scams”

Statements and where we checked them

The statements with rules, figures or dates, with the exact place in the source and the date we checked them.

1. The FTC warns (August 7, 2024) that 'free' or 'no cost' solar panel offers are scams; that scammers say they are from your utility or the government, but they are not; that these scams start with an unexpected call, social media message or in-person visit; that anyone who pressures you into a contract or demands up-front or immediate payment is a scammer; not to respond to unexpected requests for your name, address or other personal information; and to report scams at ReportFraud.ftc.gov.

   Sources 1 · How to avoid getting burned by solar or clean energy scams (Aug. 7, 2024): 'Know that “free” or “no cost” solar panel offers are scams'; 'While they might say they’re from your utility company or the government, they’re not'; 'start with an unexpected phone call, message on social, or even an in-person visit'; 'Anyone who pressures you into a contract or demands up-front or immediate payment is a scammer'; 'Don’t respond to unexpected requests online or on social media for your name, address, or other personal information'; 'ReportFraud.ftc.gov' · Checked October 31, 2026

2. According to the FTC, when you buy a solar system you pay the entire cost when it is installed; if you lease, a company installs the system on your house and you sign a contract to use it; with a power purchase agreement (PPA), you buy the power the system produces at a price the provider sets; either way you do not own the system, and tax credits and incentives go to the owner; these contracts are long-term, some lasting 20 years; the contract may let your monthly payment increase over time; ending early can be difficult and expensive, with early termination fees; and the contract may affect your options when you sell your house.

   Sources 2 · Solar Power for Your Home: 'When you buy, rather than lease, a solar power system, you pay the entire cost of the system when it’s installed'; 'If you lease a solar system, a company installs the system on your house, and you sign a contract to use it'; 'you sign a contract to buy power the system produces'; 'at a price the PPA provider sets'; 'When you lease a system or have a PPA, you don’t own the system'; 'Those go to the system’s owner'; 'some last 20 years'; 'Your contract may say your monthly lease payments can increase over time'; 'it may be difficult and expensive for you to end a lease agreement before the end of the term'; 'early termination fees'; 'The contract might affect your options when you sell your house' · Checked October 31, 2026

3. According to the FTC, before you lease a system or sign a PPA you should get detailed bids from several companies; ask whether the company has the licenses, certificates or bonding your state, county and city require; be wary of anyone who pressures you for a quick decision or asks you to pay in cash; and, if you have a problem, try to resolve it with the company first and then report it to the FTC or your state attorney general.

   Sources 2 · Solar Power for Your Home: 'Before you lease a system or sign a PPA, get detailed bids from several companies'; 'Ask if the company has the licenses, certificates, or bonding required by your state, county, and city'; 'pressures you for a quick decision'; 'asks you to pay in cash'; 'try to resolve it with the company first'; 'ReportFraud.ftc.gov or your state attorney general' · Checked October 31, 2026

4. According to the FTC, with PACE financing your county or state does not lend you the money; a property tax lien is placed on your home; you must pay your property tax bill on time to avoid default and foreclosure; and the lien can take priority over your mortgage.

   Sources 2 · Solar Power for Your Home, PACE financing: 'When you get PACE financing, your county or state doesn’t lend you the money'; 'property tax lien is placed on your home'; 'must pay your property tax bill ... on time'; 'to avoid default and foreclosure'; 'priority over your home mortgage' · Checked October 31, 2026

5. According to the IRS, the Residential Clean Energy Credit was 30% of the cost of new qualified clean energy property installed in your home from 2022 through December 31, 2025; the credit is not available for property placed in service after December 31, 2025; and it was nonrefundable, so it could not exceed the tax you owed.

   Sources 3 · Residential Clean Energy Credit, 'How it works': 'equals 30% of the costs of new, qualified clean energy property for your home installed anytime from 2022 through December 31, 2025'; 'The credit is not available for any property placed in service after December 31, 2025'; 'The credit is nonrefundable' · Checked October 31, 2026

6. Under Regulation Z (12 CFR §1026.43), a PACE transaction is financing for home improvements that results in a tax assessment on your property; the creditor may not make the loan without a reasonable and good faith determination that you can repay it; if you pay your taxes through escrow, it must consider how much your escrow payments will rise; a PACE loan is not a qualified mortgage; and a PACE company substantially involved in the credit decision must also follow these rules and can be liable.

   Sources 4 · 12 CFR §1026.43(b)(15): 'PACE transaction means financing to cover the costs of home improvements that results in a tax assessment on the real property of the consumer'; (c)(1): 'A creditor shall not make a loan that is a covered transaction unless the creditor makes a reasonable and good faith determination'; (i)(1): 'any monthly payments that the creditor knows or has reason to know the consumer will have to pay into any escrow account as a result of the PACE transaction'; (i)(2): 'a PACE transaction is not a qualified mortgage'; (i)(3): 'apply to both the creditor and any PACE company that is substantially involved in making the credit decision' · Checked October 31, 2026

7. According to the CFPB, EGRRCPA section 307 directed it to write ability-to-repay rules for PACE financing and to apply the Truth in Lending Act's civil liability provisions; the final rule was issued December 17, 2024 and took effect March 1, 2026.

   Sources 5 · Residential Property Assessed Clean Energy Financing (Regulation Z): 'directs the Consumer Financial Protection Bureau (CFPB) to prescribe ability-to-repay rules for Property Assessed Clean Energy (PACE) financing and to apply the civil liability provisions of the Truth in Lending Act'; 'Date issued by the CFPB DEC 17, 2024'; 'Effective date MAR 01, 2026' · Checked October 31, 2026

8. Under Regulation Z (12 CFR §1026.37(p)), for a PACE transaction the Loan Estimate must say whether the estimated payment includes the 'PACE Payment' and other property taxes; state that the PACE loan will be part of your property tax payment; state that, if you already have a mortgage with an escrow account, the PACE loan will increase your escrow payment; tell you to contact your mortgage servicer for what you will owe and when; and give the PACE company's name, NMLS ID (or license), email and phone.

   Sources 6 · 12 CFR §1026.37(p)(2)(i): 'PACE Payment'; 'Property Taxes (not including PACE loan)'; (p)(2)(ii): 'a statement that the PACE transaction, described as a “PACE loan,” will be part of the property tax payment'; 'will increase the consumer's escrow payment'; 'contact the consumer's mortgage servicer'; (p)(3): 'name, NMLSR ID ..., email address, and telephone number of the PACE company' · Checked October 31, 2026

9. According to HUD Handbook 4000.1, PACE is collected like a special assessment tax, by the local government; it is generally secured like that assessment against the property; if the home is sold, including at foreclosure, the PACE obligation stays with the property and the new owner becomes responsible for the payments; properties that will remain encumbered with PACE are not eligible for FHA insurance; and if a home being bought has PACE, the sales contract must say the seller will pay it off at or before closing.

   Sources 7 · Handbook 4000.1 (last revised August 12, 2026), II.A, '(6) Property Assessed Clean Energy', p. 168–169: 'collected in the same manner as a special assessment tax'; 'secured in the same manner as a special assessment tax against the Property'; 'In the event of a sale, including a foreclosure sale ... the obligation will continue with the Property'; 'Properties which will remain encumbered with a PACE obligation are not eligible for FHA mortgage insurance'; II.A.1, '(iii) Property Assessed Clean Energy', p. 137: 'the sales contract must include a clause specifying that the PACE obligation will be satisfied by the seller at, or prior to, closing' · Checked October 31, 2026

10. Under the FTC Cooling-Off Rule (16 CFR §§429.0 and 429.1), for a door-to-door sale of $25 or more made at your home (or $130 or more at another location away from the seller's business), you may cancel before midnight of the third business day after the sale; the seller must give you written notice of your right to cancel with a cancellation form in duplicate and tell you orally; and the contract cannot make you waive that right.

    Sources 8 · 16 CFR §429.0(a): 'purchase price of $25 or more if the sale is made at the buyer's residence or a purchase price of $130 or more if the sale is made at locations other than the buyer's residence'; §429.1(a): 'may cancel this transaction at any time prior to midnight of the third business day after the date of this transaction'; (b): 'NOTICE OF CANCELLATION'; (d): 'any waiver of any of the rights'; (e): 'inform each buyer orally' · Checked October 31, 2026

11. According to DOE Notice 26-1, starting in program year 2026 the Weatherization Assistance Program (WAP) no longer permits renewable electricity-generation technologies not listed in Appendix A to 10 CFR part 440, and DOE is not considering new approvals.

    Sources 9 · WPN 26-1, §3.8: 'Beginning in PY 2026, any existing renewable electricity-generation technologies not listed in 10 C.F.R. § 440: Appendix A to Part 440 will no longer be permitted in Grantee programs'; 'DOE is not considering new approvals' · Checked October 31, 2026