How do I get out of a solar panel contract?

First, two questions that decide everything

How long ago did you sign? Three business days or less puts you inside a no-fault cancellation right. Weeks or months means you need grounds or a negotiated exit. Years means some grounds have expired and others, like Truth in Lending rescission, may still be open.

What did you sign? A loan means you own the panels and owe a lender. A lease means the company owns the panels and you pay rent for 20 to 25 years. A power purchase agreement (PPA) means the company owns the panels and you buy the electricity they make. The exits below apply to all three, but what each costs and who you deal with differs; see loan vs. lease vs. PPA.

Exit 1: The cooling-off window

The FTC Cooling-Off Rule (16 CFR Part 429) gives you the right to cancel a sale of $25 or more made at your home, or anywhere other than the seller's permanent place of business, until midnight of the third business day after you signed. Saturday counts as a business day; Sunday and federal holidays do not. The seller must have given you two copies of a Notice of Cancellation form and told you about the right orally. You cancel by signing and sending the form, or any dated written notice, to the address on it. No reason, no fee, and the company must refund any payment within ten business days.

Three things people miss. Some states extend the window (California gives buyers 65 and older five business days, and some states give longer periods for home-improvement contracts). Many solar contracts write in their own 5-, 10- or even 30-day period that is more generous than the law. And if you were never given the Notice of Cancellation, several states say the window never started, which can revive the right months later; that is one of the grounds in the next section.

If the deal was financed with a loan secured by your home, a separate three-business-day right to rescind the loan exists under the Truth in Lending Act. Cancel both the installer contract and the loan, in writing, to each company.

Exit 2: Legal grounds to rescind

After the window, the law does not care that you regret the deal; it cares whether the deal was formed or performed lawfully. These are the grounds that produce rescissions and settlements. One is enough; two or three together are much stronger. Our guide to cancelling after installation covers each in depth.

• Misrepresentation in the sale. Savings that were promised and never came, a "zero bill" pitch, a tax credit presented as cash, a "free solar" or "government program" story. These violate every state's consumer-protection law. See what to do if your solar company lied to you.
• Missing or defective cancellation notice. No Notice of Cancellation form, no bold cancellation statement near your signature, no oral notice. Under many state statutes the cooling-off period does not begin until the seller complies.
• Truth in Lending defects. On a loan secured by your home, an understated finance charge (hidden dealer fees are the classic cause) or missing rescission notices can allow you to rescind for up to three years. See the Truth in Lending guide.
• Material breach. A production guarantee missed by a wide margin and never cured, wrong or never-commissioned equipment, roof damage, abandoned maintenance.
• Missing state disclosures or an unlicensed contractor. Several states (California with its Solar Energy System Disclosure Document, for example) require specific forms; others void or make unenforceable contracts signed by an unlicensed contractor.
• Forged or altered documents. A signature you did not make, pages you never saw, or terms changed after signing.

Rescission on these grounds typically means the contract and financing are cancelled, the lien released, the panels removed at the company's expense and some or all payments refunded. It is pursued by written demand first, then by an attorney, and most cases settle before any hearing. If you are wondering whether this route is realistic for you, that is exactly what our free assessment is for.

Exit 3: Buyout or payoff

Loan: you own the system, so getting out means paying the loan off. Most solar loans have no prepayment penalty; check yours. If the loan includes an undisclosed dealer fee, paying it off rewards the markup, which is why homeowners with a hidden-fee loan usually pursue Exit 2 or 5 first.

Lease or PPA: the contract will have a buyout clause. Many allow a buyout only after year five or six, priced one of three ways: the remaining payments (the most expensive), a scheduled buyout table, or fair market value as determined by the company's appraiser. Real figures run from a few thousand dollars on an old small system to $40,000 or more on a large recent one. The buyout number is negotiable, and it drops when you arrive with documented complaints. Our guide to buyouts and transfers has the detail.

Exit 4: Transfer when you sell

If you are selling the house, the usual route is to transfer the lease or PPA to the buyer. The buyer applies to the solar company, generally needs a credit score in the mid-600s or better, and signs an assumption agreement. The transfer itself is free or low-cost, but it has a cost in the sale: some buyers will not take on a 20-year payment, lenders may count it against the buyer's debt ratio, and a UCC-1 fixture filing on the equipment can slow title and the buyer's mortgage. Start the transfer or a payoff quote the day you list, and ask your agent to disclose the agreement early. Loans are typically paid off at closing from the proceeds, or formally assumed if the lender allows it.

Exit 5: A negotiated release

Between "I have ironclad grounds" and "I just want out" lies the most common real-world exit: a negotiated release. The company agrees to cancel the agreement, reduce the balance, or accept a discounted buyout, and you sign a release of claims. What makes a company negotiate is not frustration; it is documented risk. A written complaint that cites the specific misrepresentation, the missing notice, the production shortfall or the dealer fee, copied to the state attorney general and the CFPB, changes the conversation. So does an attorney's letter. Any negotiated exit should be in writing and should cover removal and roof restoration, credit reporting, lien termination and a mutual release.

What is not an exit

• Stopping payments. It triggers late fees, acceleration, credit reporting, collections, possible system shutoff and a lawsuit or arbitration, and it turns your claims into defenses. Read what happens if you stop paying your solar loan before you consider it.
• Removing the panels yourself. On a lease or PPA the equipment is not yours, and removal is treated as breach or conversion while the payments continue. On a loan the debt survives.
• Waiting for the installer to go under. The loan or lease is almost always owned by a separate finance company and survives the installer's bankruptcy. See what happens when your solar company goes out of business.
• Paying a large upfront fee to a "solar exit" service that guarantees a cancellation. Nobody can guarantee it, and a non-lawyer cannot pursue your legal claims.

Loan vs. lease vs. PPA: what changes

Your next three moves

1. Find the signing date and the Notice of Cancellation. If you are inside the window, cancel in writing today. If the notice was never given, write that down; it may be your strongest ground.
2. Pull the proposal, the texts and twelve months of bills. The gap between what was promised and what happened is the evidence for Exits 2 and 5.
3. Get the contract read by someone who reads them daily. Our free Solar Position Assessment checks the dates, the notice, the loan disclosures and the sales claims, tells you which exits are realistically open, and connects you with an independent consumer attorney when the file calls for one.

Questions people also ask

Related reading

After the window closes

Can you cancel a solar contract after installation?

The six grounds that work after the cooling-off period, what each requires, and what a successful case produces.

Leases, PPAs and loans

Solar lease, PPA or loan: what it costs to get out

Buyout pricing, transfers when you sell, UCC-1 liens and what happens if you stop paying.

Misrepresentation

My solar company lied to me. What can I do?

The statements that count, the proof you need, and the route from complaint to rescission.

Legal action

Can I sue my solar company?

Grounds, deadlines, arbitration clauses and what a successful case actually produces.