2026 Solar Fraud Report: Consumer Protection in America
The definitive 2026 Solar Fraud Report: 7 major installer bankruptcies, $35B+ in disputed loans, 5 active AG lawsuits, and what every homeowner needs to know about solar fraud in 2026.
2026 Solar Fraud Report: The State of Solar Consumer Protection in America
The Solar Panel Scam Center's annual report on solar fraud, installer bankruptcies, lender disputes, and consumer protection enforcement.
The 2026 solar fraud landscape is defined by seven major installer bankruptcies affecting 1.3 million homeowners, $35 billion in disputed loan exposure, five active state attorney general investigations into solar lenders, and a dealer-fee financing model that systematically inflates loan principals by 20–30% without clear disclosure — creating the largest consumer protection crisis in residential solar history as enforcement agencies struggle to keep pace with the scale of the fraud.
The American residential solar industry is in the midst of a consumer protection crisis. Between January 2024 and May 2026, seven major solar installers filed for bankruptcy, five state attorneys general launched active investigations into solar lenders, and an estimated $35 billion in disputed loans remain outstanding. This report aggregates public data on the scope, patterns, and legal responses to solar fraud in America.
Executive Summary
| Metric | 2024 | 2025 | 2026 (YTD) | Trend |
|---|---|---|---|---|
| Major installer bankruptcies | 4 | 2 | 1 | Continuing |
| Estimated affected homeowners | 650,000+ | 450,000+ | 200,000+ | Growing |
| Disputed loan exposure | $12B+ | $18B+ | $5B+ | Growing |
| State AG enforcement actions | 3 | 5 | 2 | Accelerating |
| FTC Holder Rule claims filed | Unknown | Growing | Growing | Increasing |
| PACE program restrictions | 2 states | 3 states | 0 | Stabilizing |
What Is Driving the Solar Bankruptcy Wave?
Timeline of Major Failures
Oct 2022 — Pink Energy (Chapter 7)
Jan 2024 — ADT Solar winds down operations
May 2024 — Sunlight Financial (Chapter 11)
Jun 2024 — Titan Solar Power (Chapter 7)
Aug 2024 — SunPower (Chapter 11)
Sep 2024 — Lumio (Chapter 11)
Jun 2025 — Sunnova (Chapter 11)
Apr 2026 — Freedom Forever (Chapter 11)
The Common Pattern
Every major bankruptcy followed the same structural pattern:
- Dealer-fee financing model — Installers inflated loan amounts by 20-30% through undisclosed dealer fees paid to themselves
- Aggressive door-to-door sales — Commission-only sales forces using high-pressure tactics
- Volume-over-quality installation — Rapid expansion prioritized deal count over workmanship
- Lender dependence — Heavy reliance on GoodLeap, Dividend Finance, Mosaic, and Sunlight Financial for loan origination
- Warranty orphanage — When the installer failed, warranty obligations evaporated
Customer Impact by Bankruptcy
| Installer | Affected Customers | Average Loan | Known Complaints |
|---|---|---|---|
| SunPower | 500,000+ | $30,000-$50,000 | Warranty transfer disputes |
| Sunnova | 400,000+ | $25,000-$45,000 | Service degradation, stock delisting |
| Freedom Forever | 150,000+ | $28,000-$42,000 | AG investigations, CSLB probation |
| Titan Solar | 100,000+ | $25,000-$38,000 | No entity remaining for claims |
| ADT Solar | 100,000+ | $22,000-$35,000 | Orphaned warranties, no service |
| Lumio | 50,000+ | $25,000-$40,000 | Pyramid scheme allegations |
| Pink Energy | 30,000+ | $22,000-$32,000 | Defective Generac equipment |
Which Lenders Are Facing Enforcement Actions?
Active State AG Lawsuits
| State | Defendant(s) | Filed | Status | Key Allegations |
|---|---|---|---|---|
| Minnesota | GoodLeap, Mosaic, Dividend, Sunlight | 2024 | Active | Dealer-fee non-disclosure, deceptive lending |
| Texas | Freedom Forever | 2025 | CID issued | Deceptive trade practices |
| Connecticut | Spruce Power | 2026 | Stipulated judgment | Lease servicing violations |
| Connecticut | SunStrong | 2026 | CID issued | Post-SunPower lease practices |
| Connecticut | Bright Planet Solar | 2026 | Active | Forged signatures, 2.9% escalator |
FTC Enforcement
| Defendant | Year | Outcome |
|---|---|---|
| Ygrene (PACE) | 2022 | Settlement — deceptive marketing practices |
| GreenSky | 2021 | CFPB consent order — loan origination violations |
What Legal Tools Do Homeowners Have?
The FTC Holder Rule (16 CFR § 433)
The single most important legal tool for solar fraud victims. The Holder Rule requires that consumer credit contracts include a notice stating:
"ANY HOLDER OF THIS CONSUMER CREDIT CONTRACT IS SUBJECT TO ALL CLAIMS AND DEFENSES WHICH THE DEBTOR COULD ASSERT AGAINST THE SELLER OF GOODS OR SERVICES OBTAINED PURSUANT HERETO OR WITH THE PROCEEDS HEREOF."
What this means in practice: If your installer misrepresented the system, installed defective equipment, or failed to deliver promised savings, you can assert those claims against the lender — even if the installer is bankrupt.
Limitation: Recovery is capped at the amount you've paid under the contract. The Holder Rule does NOT apply to PACE assessments.
State UDAP Statutes
The strongest state consumer protection laws include attorney-fee-shifting provisions:
| State | Statute | Fee-Shifting | Treble Damages |
|---|---|---|---|
| Texas | DTPA | Yes | Yes (knowing violation) |
| Florida | FDUTPA | Yes | No |
| California | CLRA | Yes | Yes |
| South Carolina | SCUTPA | Yes | Yes |
| Minnesota | CFA | Yes | Yes |
| Massachusetts | Ch. 93A | Yes | Yes (willful) |
| New Jersey | CFA | Yes | Yes |
| Connecticut | CUTPA | Yes | Yes |
TILA (Truth in Lending Act)
TILA requires accurate disclosure of:
- Annual Percentage Rate (APR)
- Finance charge (total dollar cost of credit)
- Amount financed
- Total of payments
If dealer fees were folded into the loan without proper disclosure, TILA claims may provide rescission rights or statutory damages.
Part 4: The Dealer Fee Problem
Dealer fees are the hidden engine of the solar fraud crisis. Here's how they work:
- A solar system costs the installer $18,000
- The installer sells it to you for $30,000
- But the loan is written for $36,000 — the extra $6,000 is a "dealer fee" paid to the installer by the lender
- You pay interest on the dealer fee for 20-25 years
- The dealer fee is never separately disclosed on the TILA form
Industry estimate: Dealer fees add 20-30% to the average solar loan principal. Over a 25-year loan at 4.99%, a $6,000 dealer fee costs the borrower approximately $10,500 in total payments.
Part 5: PACE — The Separate Crisis
Property Assessed Clean Energy (PACE) financing represents a parallel consumer protection crisis:
- Not classified as a loan — TILA does not apply
- Attached to property — Runs with the land, not the person
- Tax-default foreclosure — Faster than judicial foreclosure
- Blocks sales and refinancing — FHA/VA/Fannie/Freddie reject homes with PACE
- FTC Holder Rule does not apply — PACE is not consumer credit
As of 2026, residential PACE remains available only in California, Florida, and Missouri — down from a peak of 5+ states due to consumer protection concerns.
Part 6: Geographic Distribution of Complaints
States With the Highest Solar Fraud Complaint Volume (2024-2026)
- California — 35% of all complaints (largest solar market)
- Texas — 22% (fastest-growing market + DTPA enforcement)
- Florida — 18% (door-to-door sales + PACE + hurricane issues)
- Arizona — 8% (dealer fees + unlicensed contractors)
- South Carolina — 5% (contractor fraud + PACE)
- New York/New Jersey — 4% (community solar scams)
- All other states — 8%
Complaint Types by Volume
| Complaint Type | % of Total | Trend |
|---|---|---|
| System underperformance | 28% | Increasing |
| Undisclosed dealer fees | 22% | Stable |
| Installer bankruptcy/warranty orphan | 18% | Increasing |
| Door-to-door deception | 12% | Stable |
| PACE lien issues | 8% | Decreasing (fewer active programs) |
| Unauthorized financing | 7% | Stable |
| Other | 5% | — |
Part 7: 2026 Trends to Watch
1. AI-Generated Sales Materials
Sales reps are increasingly using AI tools to generate personalized "savings projections" and "proposals" that are not reviewed by engineers. These documents look professional but contain fabricated numbers.
2. Interstate Shell Operations
When a solar company faces enforcement in one state, owners increasingly dissolve the entity and reopen under a new name in a different state — exploiting gaps in interstate contractor licensing enforcement.
3. Cryptocurrency Payment Schemes
A small but growing number of fraudulent solar companies request deposits or "administration fees" in cryptocurrency, making payments irreversible and untraceable.
4. Social Media Targeting of Seniors
Scammers are using Facebook and Instagram ads to micro-target homeowners over 65 with "free government solar program" offers that require upfront fees.
5. Rising Arbitration Costs
As more homeowners file arbitration claims against lenders, JAMS and AAA filing fees are rising. Some agreements now require the consumer to pay a share of arbitration costs — potentially blocking access to justice.
Part 8: What Homeowners Can Do
If You Suspect Solar Fraud:
- Do not stop paying your loan — This will damage your credit and may accelerate the loan
- Gather your documents — Financing agreement, installation contract, TILA disclosure, monthly statements
- File complaints — With your state AG, the CFPB, and the FTC
- Consult an attorney — State UDAP laws often include fee-shifting, meaning the losing company pays your legal fees
- Check for pending class actions — Several solar lenders face class-action litigation
Document Checklist for Your Case:
- Financing agreement (loan or PPA document)
- Installation contract with the installer
- Truth in Lending disclosure (TILA box)
- Change orders or addendums
- Monthly lender statements
- Marketing materials or representations made by the sales rep
- Production/savings data from your monitoring system
- Photos of the installation
- Correspondence with the installer or lender
- Any bankruptcy notices received
FAQ
How many solar companies went bankrupt in 2024-2026?
Seven major residential solar installers filed for bankruptcy or wound down operations: Pink Energy (2022), ADT Solar (2024), Sunlight Financial (2024), Titan Solar Power (2024), SunPower (2024), Lumio (2024), Sunnova (2025), and Freedom Forever (2026). Together, these failures affected over 1.3 million homeowners.
Can I still sue a bankrupt solar company?
In Chapter 7 cases (Titan, Pink Energy), the company no longer exists as a legal entity, so there is typically nothing to sue. In Chapter 11 cases (SunPower, Sunnova, Freedom Forever), the company continues operating and may be subject to claims, but the FTC Holder Rule — suing the lender instead — is usually the stronger path.
What is the FTC Holder Rule and does it apply to my solar loan?
The FTC Holder Rule (16 CFR § 433) allows you to assert against the lender any claim or defense you could assert against the installer. It applies to most solar loans that include the required Holder Rule notice. It does NOT apply to PACE assessments, which are property tax assessments, not consumer credit.
Is there a class action against solar lenders?
Several class-action lawsuits are pending against major solar lenders, including GoodLeap and Dividend Finance. Class actions typically address systematic issues like undisclosed dealer fees. Individual arbitration or litigation may provide faster relief depending on your specific circumstances.
How do I know if my solar loan includes a dealer fee?
Look at your TILA disclosure. If the "Amount Financed" is significantly higher than the system cost you agreed to, you likely have an undisclosed dealer fee. Request an itemized breakdown from the lender in writing.
All Solar Fraud Resources
This report was compiled from public records including: bankruptcy court filings (PACER), state AG press releases and complaints, CFPB consumer complaint database, FTC enforcement actions, SEC filings, and verified media reports. Last updated: May 1, 2026.