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How to spot the warning signs of a risky solar contract

• Don't trust high-pressure solar sales. Be skeptical of promises like "no electric bill" or "this deal ends today," and always get at least three quotes before signing.

• Never sign a contract you can't keep. If everything is done on an iPad, insist on receiving a complete copy of the signed contract by email or in print before the salesperson leaves.

• Do your homework first. Research the installer's reviews, licensing, and complaint history, and consider having ChatGPT review the contract for potential red flags before you commit.

Installing solar panels can be a smart long-term investment, but experts say homeowners should be careful before signing anything especially if the offer comes from a door-to-door salesperson.

The warning comes after financial personality Dave Ramsey discussed a caller's experience with a solar company that allegedly promised to eliminate his electric bill in exchange for monthly payments on a solar system. The homeowner later said the deal wasn't what he believed he had agreed to and wanted to know whether he could get out of the contract.

While every situation is different, consumer advocates say the story highlights several red flags that we should watch for before signing a home improvement contract.

Be skeptical of 'too good to be true' promises

One of the biggest warning signs is a salesperson making sweeping promises, such as:

• "You'll never pay another electric bill."

• "The system pays for itself."

• "You can cancel anytime."

• "This offer expires today."

Solar panels can definitely reduce your electricity costs, but savings depend on factors such as your home's energy use, local utility rates, available incentives, and the terms of your financing agreement. Always keep in mind that no salesperson can honestly guarantee identical savings for every homeowner.

If someone promises dramatic savings without reviewing your energy usage or utility bills, treat it as a red flag.

Never sign a contract you can't review later

According to Ramsey, one of the biggest warning signs in the caller's situation was that the entire transaction took place on a salesperson's iPad.

The homeowner said he reviewed the agreement electronically and signed it on the device, but afterward was told the company didn't provide a paper copy of the signed contract.

That's a major red flag.

Before signing any contract electronically, make sure you receive a complete copy either printed or emailed to you. Make sure this happens before the salesperson leaves your property.

Once you have the contract in your hands, be sure to review every page carefully, paying close attention to the total project cost, interest rate and financing terms, monthly payment amount, equipment warranties, and the transfer rules if you sell your home.

If you can't easily access the final signed contract, don't move forward.

Pro tip: Take the contract and copy and paste it into ChatGPT and ask if anything about it looks abnormal or out of the ordinary. ChatGPT will quickly inform of you any potential red flags or questions you need to ask the company before moving forward.

Get multiple quotes

One of the easiest ways to avoid overpaying is to compare offers.

Experts generally recommend getting at least three quotes from different installers. That gives you a better sense of pricing, financing options, equipment quality, and estimated energy production.

A salesperson who discourages comparison shopping or pressures you to sign immediately should raise concerns.

Research the company first

Before signing anything, spend a few minutes researching the installer.

Specifically, check out recent customer reviews on Google, Better Business Bureau complaints, state licensing information, and how long the company has been in business.

Spending a few minutes doing a little research can uncover warning signs before they become expensive problems.

If you think you've been misled

If you believe a solar company misrepresented the terms of your agreement, act quickly.

Start by gathering copies of your contract, emails, advertisements, and any text messages you received.

You can file a complaint with your state attorney general's office, your state's consumer protection agency, or the Federal Trade Commission. If significant money is involved, consulting an attorney who handles consumer protection or contract disputes may also be worthwhile.