2026 Solar Fraud Report: 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 six major installer bankruptcies affecting over 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, six major solar installers filed for bankruptcy or wound down, 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.

For homeowner action steps, pair this report with the solar financing scams guide, the state-by-state solar fraud guide, and the underlying solar fraud data library that organizes recurring complaint patterns.

Executive Summary

What Is Driving the Solar Bankruptcy Wave?

Timeline of Major Failures

Oct 2022 — Pink Energy (Chapter 7)
Oct 2023 — Sunlight Financial (Chapter 11; a point-of-sale lender, not
           an installer — emerged Dec 2023 under new ownership)
Jan 2024 — ADT Solar winds down operations
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:

1. Dealer-fee financing model — Installers inflated loan amounts by 20-30% through undisclosed dealer fees paid to themselves
2. Aggressive door-to-door sales — Commission-only sales forces using high-pressure tactics
3. Volume-over-quality installation — Rapid expansion prioritized deal count over workmanship
4. Lender dependence — Heavy reliance on GoodLeap, Dividend Finance, Mosaic, and Sunlight Financial for loan origination
5. Warranty orphanage — When the installer failed, warranty obligations evaporated

Use the solar scam pattern database to compare these bankruptcy signals against the pressure scripts, financing gaps, and warranty failures appearing in individual homeowner complaints.

Customer Impact by Bankruptcy

Which Lenders Are Facing Enforcement Actions?

Active State AG Lawsuits

The Minnesota Case Is the One to Watch

Minnesota Attorney General Keith Ellison sued four solar lenders on March 8, 2024, alleging concealed dealer fees that inflated borrowing costs by 15–30% — some as high as 36% — across more than 5,000 Minnesota loans and roughly $35 million in fees between 2017 and 2023.

The most damaging allegation is not the fee itself but the concealment mechanism: the complaint alleges the lenders contractually prohibited installers from disclosing the dealer fee to homeowners. If that holds up, it reframes the dealer fee from a pricing practice into an engineered disclosure failure.

Procedurally, the case was removed to federal court, remanded back to Hennepin County District Court on January 16, 2025, and remains pending. No settlement or final judgment has been entered.

Why this matters more than the bankruptcy list: Sunlight Financial was named as a defendant in March 2024 — three months after it emerged from Chapter 11. Reorganization did not clear it from consumer-protection exposure for pre-bankruptcy conduct. A homeowner who assumes "that company is gone, so nothing can be done" is working from a false premise.

A note on a claim circulating elsewhere: some solar-fraud sites list Sunlight Financial as a defendant in the March 2026 New York Attorney General action. The New York AG's own announcement names Attyx LLC and Attyx New York LLC, their two co-CEOs, Solar Mosaic LLC, and WebBank. Sunlight Financial is not among them. Verify defendant lists against the filing agency before relying on them.

Who Actually Holds Your Loan?

For loans arranged through the Sunlight Financial platform, Cross River Bank is generally the originating bank of record, not Sunlight itself. In January 2024, Sunlight and Cross River announced the sale of an approximately $300 million solar loan asset pool, and Solar Mosaic filed for Chapter 11 in June 2025 with a portfolio reported at roughly $8 billion.

The practical consequence: the entity collecting your payment today may not be the entity that originated the loan. Because the FTC Holder Rule follows the holder of the contract, identifying the current holder is a necessary first step. Pull your loan documents, your most recent statement, and any assignment or transfer notice before assuming who the counterparty is.

FTC Enforcement

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:

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:

1. A solar system costs the installer $18,000
2. The installer sells it to you for $30,000
3. But the loan is written for $36,000 — the extra $6,000 is a "dealer fee" paid to the installer by the lender
4. You pay interest on the dealer fee for 20-25 years
5. 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)

1. California — 35% of all complaints (largest solar market)
2. Texas — 22% (fastest-growing market + DTPA enforcement)
3. Florida — 18% (door-to-door sales + PACE + hurricane issues)
4. Arizona — 8% (dealer fees + unlicensed contractors)
5. South Carolina — 5% (contractor fraud + PACE)
6. New York/New Jersey — 4% (community solar scams)
7. All other states — 8%

Complaint Types by Volume

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:

1. Do not stop paying your loan — This will damage your credit and may accelerate the loan
2. Gather your documents — Financing agreement, installation contract, TILA disclosure, monthly statements
3. File complaints — With your state AG, the CFPB, and the FTC
4. Consult an attorney — State UDAP laws often include fee-shifting, meaning the losing company pays your legal fees
5. 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

If you need a cleaner evidence packet, use the solar case documents checklist before sending complaints to an attorney, lender, state AG, or contractor board.

Sources and Official References

• CFPB solar financing issue spotlight - federal analysis of residential solar financing, dealer fees, and consumer risks.
• FTC Holder Rule - federal rule allowing many consumer-credit borrowers to assert seller claims and defenses against the holder.
• FTC clean energy scam alert - consumer warning on solar and clean-energy deception.
• U.S. Treasury consumer advisory on solar - federal advisory on misleading solar financing and sales claims.
• SEIA Solar Market Insight - market context for U.S. residential solar growth and volatility.

FAQ

How many solar companies went bankrupt in 2024-2026?

Six major residential solar installers filed for bankruptcy or wound down operations between 2024 and 2026: ADT Solar (2024), Titan Solar Power (2024), SunPower (2024), Lumio (2024), Sunnova (2025), and Freedom Forever (2026).

Two related failures sit outside that count. Pink Energy collapsed earlier, in October 2022.

Sunlight Financial is a different case entirely, and the distinction matters. It is a point-of-sale lender, not an installer. It filed Chapter 11 in October 2023 and emerged in December 2023 under a consortium that included its secured lender, Cross River Bank — it reorganized rather than liquidating, and Sunlight Financial LLC still operates today, now marketing home-improvement financing for roofing, HVAC, and windows rather than leading with solar.

Counting Sunlight as a failed installer actually understates it. A surviving lender is a more consequential party for homeowners than a liquidated installer, because it still exists, still has a balance sheet, and was named as a defendant in the Minnesota Attorney General's lending case in March 2024 — after emerging from bankruptcy. See which lenders are facing enforcement actions above.

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: June 20, 2026.