Solar Contract Red Flags for Texas Homeowners

None of the items below proves anything about a company. Each is a place where a homeowner often does not have the information needed to judge the deal, and where a good installer will have a clear answer.

1. "Free solar" or "no cost to you"

Zero upfront cost usually means a lease or a power purchase agreement (PPA). You make payments for 20 to 25 years and the provider owns the equipment.

Ask: Is this a purchase, a loan, a lease or a PPA? Who owns the system? What is the total of all payments over the term?

2. An annual escalator

Many leases and PPAs raise the payment every year, commonly by a few percent. Compounded over 25 years, a 2.9% escalator roughly doubles the starting payment. The pitch is that utility rates will rise faster; they may or may not.

Ask: What is the escalator? What is the payment in the final year? What happens if my electricity rate does not rise as assumed?

3. A financed price higher than the cash price

Low-interest solar loans are often paired with a higher system price. The difference is commonly a fee paid to the lender to buy down the rate, and it can be a meaningful share of the loan.

Ask: What is the cash price for this exact system? Is there a dealer or lender fee in the financed price, and how much is it in dollars?

4. A tax credit that no longer applies

The federal residential solar credit does not apply to systems placed in service after December 31, 2025. Some sales material has not caught up.

Ask: Does this price or payback assume any tax credit? Which one, and who claims it?

5. Production numbers you cannot check

Savings depend on how much the system produces. An estimate well above what similar systems produce in your area should come with an explanation: a very good roof, or optimistic assumptions.

Ask: What software and shade measurement produced this estimate? What losses did you assume? Is production guaranteed, and what happens if it falls short?

6. Savings that assume full credit for exported power

Texas has no statewide net metering. In the deregulated market, what you are paid for exported solar depends on the retail electricity plan you choose, and many plans pay less than the retail rate or cap the credit. Municipal utilities and cooperatives set their own terms.

Ask: What export credit did the savings estimate assume? Which retail plan is that, and can I see its terms?

7. A system sized well above your usage

An array that produces far more than you use only pays if the excess is credited well. Otherwise you are buying capacity that earns little.

Ask: What annual usage did you size this for? Why is the system larger than that?

8. Vague equipment, warranty or cancellation terms

A complete proposal names the panel and inverter models, states the workmanship warranty and who performs warranty labor, and explains cancellation, transfer on sale of the home, and any lien or UCC filing connected to financing.

Ask: Which exact models? Who do I call for service in year eight? What happens to the agreement if I sell the house? Will anything be filed against my property?

Pressure is a signal too

A price that is "only good today" is a sales technique, not a market condition. A sound proposal will still be sound after you have compared it with two others and slept on it.

A simple process

1. Find your annual kWh usage.
2. Estimate what you need with the Solar Size Calculator before any salesperson visits.
3. Get at least three itemized proposals.
4. Run each through the Solar Quote Checker and bring its question list to the installer.
5. Read the full contract, including cancellation and transfer terms, before signing. For a large commitment, a short review by an attorney is inexpensive insurance.

Common questions