Over the last decade, millions of homeowners have been sold residential solar systems with the promise of lower electric bills, greater energy independence, valuable tax incentives, and increased home value. For many homeowners, solar has delivered exactly what they expected. For others, the reality has been very different.
Homeowners across the country are discovering that the solar agreement they signed may last 20, 25, or even more years, and getting out of a solar contract can be far more complicated than getting into one.
Some homeowners say they were told their solar panels would eliminate their electric bill, that tax credits would substantially pay down the system, or that selling their home with solar would be simple. Others later discover financing charges, escalating payments, system-performance problems, transfer requirements, unexpected payoff balances, UCC filings, liens, or other contractual obligations affecting their property.
- Am I eligible for solar contract cancellation?
- How do I terminate a solar lease?
- Can I get out of a solar PPA?
- How do I remove a solar lien from my home?
- What happens to my solar contract when I sell my house?
- What can I do if my solar company misrepresented the agreement?
At Dynamic Resource Group (DRG), we help homeowners understand their solar agreements, identify potential problems in the transaction, and evaluate available solar contract resolution and cancellation options.
Why Are Solar Contracts So Difficult to Cancel?
One of the biggest problems with residential solar is the length and complexity of the financial commitment. Solar systems may involve several separate agreements, including:
- A solar installation contract
- A solar financing agreement
- A solar panel loan
- A solar lease
- A Power Purchase Agreement (PPA)
- Battery financing
- Equipment warranties
- Performance guarantees
- Utility interconnection agreements
A homeowner may think they signed one solar contract when, legally, they may have agreed to several different obligations. Solar-specific loans can run for 8 to 25 years, while solar leases and PPAs frequently create commitments lasting 20 years or longer.
Solar Contract Pitfall #1: “Your Electric Bill Will Disappear”
One of the most common complaints involving residential solar is the difference between the savings homeowners expected and what actually happened. Installing solar generally does not mean the homeowner stops having a relationship with the utility company.
Depending on electricity consumption, utility rates, net-metering rules, system production, battery storage, weather, shading, and other factors, homeowners may still receive an electric bill in addition to their solar payment.
That can mean a solar payment + an electric bill.
Solar Contract Pitfall #2: 20- and 25-Year Solar Financing
A long financing term can make the initial monthly payment look affordable, but homeowners should look beyond the payment and ask how much they will actually pay over the entire contract.
Long financing periods can create additional complications when a homeowner sells the property, refinances, gets divorced, inherits a property, experiences financial hardship, needs a new roof, wants the equipment removed, or discovers the system is not producing as expected.
Solar Contract Pitfall #3: Dealer Fees and Financing Markups
Some solar financing arrangements include significant dealer fees or financing markups. Homeowners should compare the system's stated cash price with the amount originally financed. A substantial difference deserves further examination.
Solar Contract Pitfall #4: Solar Tax Credit Representations
A tax credit is not the same as a guaranteed cash rebate. Eligibility and the ability to use a tax credit depend on the homeowner's individual tax circumstances and applicable tax law.
Homeowners who believe a salesperson promised a specific tax refund or represented the solar tax credit as guaranteed should preserve emails, texts, proposals, advertisements, and other sales materials.
Solar Contract Pitfall #5: Liens, UCC Filings, and Selling Your Home
Different solar financing arrangements can create different property-related obligations. Depending on the agreement, there may be a security interest in the solar equipment, a UCC-1 filing, a payoff requirement, a transfer requirement, a PACE assessment, or another contractual restriction affecting a sale or refinance.
A UCC filing is not necessarily the same thing as a traditional mortgage lien against the entire home, but it may still need to be addressed during a sale or refinance.
Solar Contract Pitfall #6: “Just Transfer It to the New Homeowner”
Transfers may require the incoming homeowner to qualify for or assume the remaining obligation. If a buyer refuses, the seller may face a payoff or another requirement before closing.
Solar Contract Pitfall #7: Solar Lease and PPA Escalators
Some solar leases and PPAs contain annual price escalators. Even a seemingly small annual increase can become meaningful when compounded over 20 or 25 years.
Review terms such as annual escalator, rate increase, PPA rate, price per kilowatt-hour, annual adjustment, fixed payment, buyout, early termination, and transfer.
Solar Contract Pitfall #8: System Performance Problems
Common complaints include lower-than-expected production, inverter problems, battery failures, roof leaks, installation issues, system downtime, activation delays, warranty-service problems, monitoring issues, and unexpected electric bills.
Solar Contract Pitfall #9: Electronic Signatures and High-Pressure Sales
Before attempting to dispute or cancel a solar agreement, determine what documents were signed, when copies were provided, whether electronic signatures were used, what verbal promises were made, and whether the written contract contradicted the sales presentation.
Preserve everything. Text messages and emails from the salesperson can become important when evaluating a solar contract dispute.
Can You Cancel a Solar Contract Within Three Days?
Certain transactions may provide a short cancellation or right-of-rescission period. The availability and length of that period depend on the transaction and applicable law. If you recently signed a solar contract and want out, review the cancellation notice in your contract immediately and do not delay.
What If the Cancellation Period Has Already Expired?
There is no universal rule allowing every homeowner to simply cancel a solar agreement after the standard cancellation period expires. However, the expiration of the initial period does not necessarily mean there is nothing left to investigate.
Potential issues may include material misrepresentations, misleading savings claims, tax-incentive representations, improper sales practices, disclosure issues, signature disputes, unauthorized transactions, licensing issues, installation problems, financing disclosure issues, fraud concerns, nonperformance, warranty issues, and applicable consumer-protection laws.
What Are Your Options If You Are Stuck in a Solar Contract?
Option 1: Cancel During the Rescission Period
If the deadline has not passed, follow the contract's cancellation instructions immediately and keep proof that the cancellation was sent.
Option 2: Negotiate a Solar Contract Buyout
Some leases and PPAs contain contractual buyout options. Request the buyout terms in writing before making a decision.
Option 3: Pay Off a Solar Loan
Before paying anything, request a written payoff statement and verify what happens to any associated security interest or UCC filing after payment.
Option 4: Transfer the Solar Agreement
Review buyer qualification requirements, transfer fees, required documentation, processing time, credit requirements, and seller liability after transfer.
Option 5: Dispute the Solar Agreement
If you believe the transaction involved misrepresentation, unauthorized signatures, deceptive financing terms, material nonperformance, or other misconduct, document what was promised, what happened, who made the representation, and what the written contract says.
Option 6: File Consumer Complaints
Depending on the issue, consumers may be able to submit complaints to the Consumer Financial Protection Bureau, Federal Trade Commission, state Attorney General, contractor licensing authority, consumer-protection agency, or an applicable utility or energy regulator.
Option 7: Have the Entire Solar Transaction Reviewed
A comprehensive review may require the purchase agreement, loan documents, lease or PPA, financing disclosures, sales proposal, utility and production estimates, disclosure forms, signature records, emails, texts, permits, inspections, interconnection documents, UCC filings, property records, and warranty documents.
What About Removing a Solar Lien or UCC Filing?
First determine exactly what has been recorded, who filed it, what debt or equipment it secures, whether the filing is still active, and what contractual conditions are required for termination or release.
Do Not Stop Paying Just Because You Want to Cancel
Wanting to cancel a solar contract does not automatically suspend payment obligations. Stopping payments without understanding the consequences can potentially lead to late fees, credit damage, collection activity, default, enforcement of security interests, and other financial or legal problems.
Warning Signs Your Solar Contract Deserves a Closer Look
- “Solar is completely free.”
- “You will never have another electric bill.”
- “The government is paying for your system.”
- “The tax credit is guaranteed.”
- “You can cancel anytime.”
- “Selling your house won't be affected.”
- “The next homeowner automatically takes over the panels.”
- “There is no lien or financing obligation.”
- “Your solar payment can never increase.”
What Documents Do You Need for a Solar Contract Cancellation Review?
- Original solar contract
- Solar loan agreement
- Solar lease or PPA
- Most recent solar statement
- Utility bills before and after installation
- Solar production reports
- Sales proposal
- Tax-credit representations
- Emails and text messages
- Warranty information
- Notice of any UCC filing or lien
- Home-sale or refinancing documents if solar is interfering with a transaction
Can Dynamic Resource Group Help With Your Solar Contract?
Dynamic Resource Group helps homeowners evaluate problematic solar agreements and understand potential contract-resolution options.
Every solar contract is different. The fact that one homeowner may have grounds to challenge, negotiate, transfer, buy out, or otherwise resolve an agreement does not mean another homeowner will have the same options.
Request a Solar Contract Review
The first step is understanding exactly what you signed and what options may be available based on your individual situation.
Solar Contract Cancellation Frequently Asked Questions
Can I get out of a 25-year solar contract?
Possibly, but there is no universal cancellation right simply because a contract is long. Available options depend on the agreement, financing structure, timing, applicable law, and circumstances surrounding the sale.
Can I cancel my solar loan?
Solar loan cancellation depends on the loan documents and circumstances surrounding the transaction. Some situations may warrant further review for financing, disclosure, authorization, or misrepresentation issues.
Can I cancel a solar lease?
Review the lease for early-termination, transfer, buyout, and purchase provisions. Different providers have different terms.
Can I cancel a solar PPA?
A Power Purchase Agreement may contain transfer, purchase, or early-termination provisions. Review the complete agreement before taking action.
Can solar panels put a lien on my house?
Solar financing can involve several different security interests or property-related filings. Determine exactly what has been recorded rather than assuming every solar filing is a conventional mortgage lien.
Can solar panels prevent me from selling my house?
Solar does not necessarily prevent a sale, but an outstanding loan, lease, PPA, UCC filing, transfer requirement, or payoff obligation can complicate the transaction.
What if the solar salesperson lied to me?
Document precisely what was represented, preserve emails and text messages, and compare those statements with the written agreement. Material misrepresentations may warrant professional review.
What if my solar company went out of business?
The installer disappearing does not necessarily eliminate a separate financing obligation. Identify the installer, lender, current servicer, equipment manufacturer, and warranty provider to determine who remains responsible for each part of the transaction.
Disclaimer: Dynamic Resource Group is not a law firm and does not provide legal advice unless services are specifically being provided through appropriately licensed legal counsel. Information on this page is provided for general educational purposes. Contract rights and remedies vary based on individual circumstances, contract language, financing structure, and applicable federal and state law. No particular outcome or cancellation result is guaranteed.