Deciding to go solar is an exciting move towards energy independence and sustainability. However, what if you change your mind and want to cancel your solar panel contract? Is it possible to do so without incurring expensive penalties?
Understanding Solar Panel Contracts
When you sign a contract with a solar company to install panels on your home, you are entering into a binding legal agreement. Most solar contracts contain provisions that allow the company to charge you significant fees for early termination. Here are some key facts about solar contracts:
- Length – Solar contracts typically range from 10-25 years for leases and power purchase agreements. Contracts to purchase systems outright may be shorter.
- Cancellation terms – Most contracts include language detailing penalties for early cancellation, such as paying off the remainder of the lease amount.
- Installation timeline – Contracts usually give the company a window of 3-9 months to complete installation.
Key takeaway: Solar companies use long contracts to protect their investment in the system. Carefully review cancellation policies before signing.
Strategies to Cancel Without Penalties
Is it possible to get out of a solar contract without excessive penalties? Here are some potential options:
Negotiate with the solar company
- Be upfront about your reasons for wanting to cancel. Financial hardship is viewed sympathetically.
- Ask if they can shift you to a shorter contract, waive fees, or create a buyout agreement.
- Offer to help them find a new homeowner to take over your contract.
Sell your home
- Most solar contracts have provisions allowing cancelation in the event you sell your home.
- There may still be fees for removing equipment or transferring the agreement to the buyer.
- Discuss options with your real estate agent if relocating is an option.
Claim breached contract
- Review the fine print thoroughly for any unsatisfied obligations on their end, like missing installation deadlines.
- Consult a lawyer regarding constructing a “breach of contract” case to exit without penalties.
- Be prepared to demonstrate how the company defaulted on contractual duties.
File a complaint
- Submit a formal complaint with the state public utilities commission detailing deceptive sales practices or unsatisfactory service.
- Consult with an attorney regarding potentially invalidating the agreement by proving fraud.
- Check the company’s BBB rating and online reviews for evidence of systemic issues.
Key takeaway: Exiting a solar deal without penalties is challenging but may be possible by negotiating, selling your home, proving breach of contract, or filing a formal complaint.
What to Know Before Canceling
Prior to attempting to terminate your solar panel contract, keep the following considerations in mind:
- Review your contract thoroughly to understand the exact cancellation terms. Penalties can total $10,000+ in some cases.
- Continue making payments and maintaining the system until the contract is officially terminated, or you risk additional fees.
- Understand that legal action may be required if the company will not negotiate an escape from the agreement.
- Be prepared to compensate the company for any installation costs incurred before the contract was canceled.
Key takeaway: Know your rights and risks before canceling to avoid complications down the road. Discuss options with an attorney.
Alternatives to Outright Cancellation
If you cannot fully terminate your solar commitment, here are some alternative steps to consider:
- Ask about changing to a lower cost agreement to reduce monthly payments.
- See if equipment can be moved to a new home rather than removed if relocating.
- Inquire about selling electricity back to the utility rather than having it subtracted from your bill.
- Use less electricity and maximize the system’s output to increase savings and offset costs.
Key takeaway: There may be ways to make a solar contract more affordable short of complete cancelation.
Canceling a solar panel contract is complex but feasible in certain situations. If your goal is termination without penalties, be prepared to negotiate firmly, bring legal arguments about contractual breaches, or file official complaints. If cancellation is impossible, look into modifying agreement terms or minimizing power usage. With patience and perseverance, freedom from an unwanted solar commitment may be within reach.