PACE Loans and “Free” Solar or Roof Offers

What “free solar” and “free roof” claims can mean

The Federal Trade Commission (FTC) warns about sellers who promise free rooftop solar paid for by the government. Its solar scam advice says to check the company and read the deal. A real local aid plan may cover some or all costs for people who qualify. But an ad alone is not proof.

How PACE payments affect your home

Residential PACE may pay for approved energy or home upgrades. Some local plans allow solar, heating, storm safety work, or roof work tied to an approved project. The exact work depends on the local plan. PACE is not offered in every place, and there is no single national sign-up form.

To check if you can apply, call the local PACE office or tax office. Ask for the rules for your address. A plan may check home ownership, unpaid taxes, mortgage status, home value, and the kind of work.

There is no single income limit, price cap, deadline, or fee for all PACE plans. Get the local rules in writing.

Most PACE deals work like this: a program pays for approved work, and a special charge is added to your property taxes. You repay the cost, interest, and fees over time. The CFPB PACE warning gives examples of five-, 10-, and 20-year terms. Your plan may differ.

Your property-tax bill can rise

Ask for the added tax amount for each year, not just a monthly guess. If your mortgage firm pays taxes from an escrow account, it may raise your monthly mortgage payment. It may also seek an extra amount to cover an escrow shortfall. If you pay taxes on your own, plan for the larger bill when it comes due.

For example, an added $2,400 a year is about $200 a month when spread over 12 months. This is only a math example, not a quote or typical PACE price. Your actual amount can change with the financing terms and tax schedule.

A tax assessment can place your home at risk

A PACE charge may have a lien on the home. A lien is a legal claim tied to a debt. In some places, it can rank ahead of your mortgage. Your home equity may be at risk, even if the new panels work well.

For a clear look at other types of home repair liens, read our loan liens and repayment guide.

Selling or refinancing may be hard

Do not trust a promise that the next owner must take over PACE. A buyer may refuse. A buyer’s lender may also refuse. Some sales or refinance deals may need the PACE balance paid off at closing.

Ask for the payoff amount and any early payoff rules in writing.

Fannie Mae PACE policy says it will not buy most mortgages with a PACE charge that ranks ahead of the first mortgage. It has narrow exceptions, so it is wrong to say every PACE balance must always be paid off. Check the exact property, lender, and loan. Freddie Mac mortgage guidance is also useful when you ask a lender about energy work and refinancing.

What the federal PACE rule says in 2026

The Consumer Financial Protection Bureau (CFPB) issued a final residential PACE rule in December 2024. Its stated effective date was March 1, 2026. As of this review, the CFPB still lists that final PACE rule and its PACE compliance resources. We did not find an official change that cancels that effective date.

For covered PACE deals, the rule adds home-loan-style cost forms and checks of a person’s ability to repay. It brings key Truth in Lending Act rules to this form of credit. Ask for the loan estimate, closing papers, annual percentage rate (APR), fees, payment schedule, and right-to-cancel papers that apply to your deal.

These rules do not mean PACE is a good fit for every home. They do not turn financing into a grant. State and local rules may also apply.

If your offer does not include clear papers, stop and ask the lender or PACE office why. Do not take a salesperson’s word about your legal rights.

Compare the whole price, not just today’s payment

Do not compare a low monthly loan offer with a cash price alone. The CFPB’s solar financing review found some solar loans with fees that raised the loan amount by 30% or more over the cash cost. Some deals also planned for a large payment from a tax credit. If that payment did not arrive, later bills could rise.

Ask for two totals: the full cash price and the total you will pay with financing. Check the APR, term, all fees, late costs, and any big payment due later. Compare with a bank or credit union offer. Our safer home repair loans guide covers other ways to borrow.

The federal homeowner solar credit ended for new 2026 work

The Internal Revenue Service (IRS) says the Residential Clean Energy Credit is not available for property placed in service after December 31, 2025. The tax law also ends the credit for new spending after that date. See the IRS solar credit rules and IRS credit end dates.

A new 2026 pitch should not take 30% off the price as if you are sure to get that federal homeowner credit. Even under the old rules, plain roof shingles, rafters, and other basic roof parts did not count just because they held up solar panels. Some solar tiles that made power were treated in a different way.

People with eligible work from 2025 may still have tax filing questions. That is not the same as a credit for a new 2026 job. Ask a tax adviser about an old claim, not a door-to-door seller.

Solar for All: a court reversed the program’s cancellation

The Environmental Protection Agency (EPA) ended its federal Solar for All program in August 2025, as a January 2026 EPA watchdog report records. But the story changed. On September 18, 2026, a federal judge ruled that the EPA’s action was unlawful and set the cancellation aside. Read the September court order.

This ruling does not mean there is a new, open national form for free panels. As of October 9, 2026, we could not confirm that all funds had been released or that each local award holder was taking new household applications. The EPA could appeal.

Check with your state, tribe, utility, or original grant recipient about its current status. Do not pay a seller to get on a federal waitlist.

Before you sign: seven checks

Documents worth keeping

Save your tax bill, mortgage and escrow statement, 12 months of utility bills, all bids, roof photos, inspection notes, loan or PACE forms, permits, warranties, sales ads, texts, and emails. Keep copies of anything you sign. Never give a seller your bank password.

Where to look for real help instead

Solar or roof aid depends on your address, income, the work needed, and local funds. There is no open national program that pays for every roof or solar system. A real program should name its service area, rules, office, approved work, and how to apply.

Start with your utility or state energy office. Ask about current rebates, income-based solar, and community solar. Get any deadline, budget limit, and list of approved firms from the agency itself. Our low-income solar help guide covers these paths in more detail.

Ask about weatherization. The Department of Energy’s Weatherization Assistance Program offers energy-saving work through local agencies to households that qualify. It is a service, not a general solar or roof grant.

Under DOE rules, homes at or below 200% of the federal poverty guideline or getting Supplemental Security Income may qualify.

Some states use other income rules. The local office checks your proof. It may have a waitlist. Find your state provider through the DOE weatherization application page.

Check community solar. It may lower a bill with no panels on your roof. It will not repair a bad roof.

Ask about subscription charges, bill credits, exit fees, and moving. The DOE community solar guide explains how it works.

Ask for roof aid, not a solar loan. Your town, county, tribe, or local nonprofit may have repair help. The work might be a grant, loan, or service.

Use our local repair program finder to find the right office. Apply before starting work when the program requires it.

Get a second view. A housing counselor approved by the Department of Housing and Urban Development (HUD) may help with home cost and mortgage concerns. Call 1-800-569-4287 or use HUD housing counseling. For liens or legal rights, ask a legal aid office or lawyer.

If you already signed or feel misled

Act as soon as you can. Find the date you signed and any right-to-cancel forms. Check the seller’s full name, finance company, PACE office, and tax office. A roof contract may have a different set of rules from a credit deal.

The FTC Cooling-Off Rule gives a three-business-day right to cancel some sales made at home or at other covered sites. It does not cover all sales. Online deals, certain emergency work, and other deals may be left out.

State laws may give you other rights. Read the FTC cancellation guidance right away.

1. Send a written notice by the method and deadline in each valid cancellation form. Keep proof it was sent.
2. Tell both the seller and the finance or PACE firm. Do not assume one call stops every contract.
3. Save sales claims, messages, ads, recordings, quotes, and signed papers.
4. Call the tax collector or recorder to check whether an assessment or lien was filed.
5. Ask a lawyer or legal aid for prompt help if there is a tax sale, lien fight, or court notice.

For a credit or financing problem, file a CFPB consumer complaint or call 1-855-411-2372. For a false sales claim, use the FTC’s fraud report form. You can also contact your state attorney general or contractor board. For more warning signs, see home repair scams targeting seniors.