July 25, 2024


Law For A Better Future

How To Get Out Of Solar Panel Contract

How To Get Out Of Solar Panel Contract

How To Get Out Of Solar Panel Contract Considering a Solar Lease Contract or PPA? Here’s What You Should Know Are you contemplating a solar Power Purchase Agreement (PPA) or a solar lease contract and wondering about your options if you wish to exit these agreements? Solar companies often bind these agreements to your property, making them difficult to terminate prematurely, usually spanning 15 to 20 years. This article explores your financing alternatives and helps you understand your rights before signing such contracts.

Know Your Solar Rights Before Committing

How To Get Out Of Solar Panel Contract
How To Get Out Of Solar Panel Contract

While installing a solar system in your home is a wise decision for clean and renewable energy, choosing the right company is crucial. Here are some key rights and considerations:

  • The solar provider must provide you with The California Solar Consumer Protection Guide and give you time to read it before signing the contract. Failure to do so can be reported to the Contractors State License Board (CSLB).
  • You have the right to receive a full copy of the solar contract and financing agreement in your preferred language.
  • The solar company must furnish you with a complete Solar Energy System Disclosure Document, which outlines the total cost of the solar energy system.
  • You have a 3-day Cancellation Period after signing a solar contract, allowing you to change your mind and cancel the contract within three business days.

If you’ve recently signed a contract, canceling it should be straightforward if you act within the 3-day window.

Understanding Solar Power Purchase Agreements (PPAs) and Solar Leases

How To Get Out Of Solar Panel Contract
How To Get Out Of Solar Panel Contract

Solar Power Purchase Agreement (PPA):

  • Financial Implications: PPAs involve long-term agreements, often spanning a decade or more, where you purchase electricity generated by the solar panels at a predetermined rate.
  • Cost Stability: While PPAs may offer a fixed electricity rate, this rate is set by the solar company and may not guarantee long-term savings. If the system doesn’t generate enough power, you may still pay an electric bill.
  • Responsibility: Solar companies typically handle maintenance and repairs, but this convenience comes at a cost. You rely on their responsiveness and may have limited control over maintenance schedules and service quality.
  • Ownership: With a PPA, you don’t own the solar panel system, limiting your ability to make modifications or upgrades.

Solar Lease:

  • Upfront Costs: Leasing solar panels may appear appealing due to lower upfront costs, but you’ll make regular lease payments to the solar company instead of investing in an owned system.
  • Maintenance and Repairs: Similar to PPAs, the solar company typically manages maintenance, repairs, and insurance. This can limit your control over the system and your dependence on their service quality.
  • Ownership: Leasing means you won’t have ownership of the panels, preventing you from benefiting from potential long-term financial gains or customizing the system to your changing needs.
  • Flexibility: While leasing may offer short-term flexibility, lease agreements often span several years, and modifying or terminating them might come with limitations and additional costs.

Owning your own solar panel system offers distinct advantages, including long-term financial benefits, complete ownership and control, potential property value increases, and significant savings on electricity bills.

Exiting a Solar Lease Contract:

How To Get Out Of Solar Panel Contract
How To Get Out Of Solar Panel Contract

Exiting a solar lease is usually costly and challenging, as these contracts are designed to be long-term commitments. Your options typically include:

  1. Solar Lease Buyout: Paying the remaining balance of your lease to either remove the solar panels or use the system independently. Buyout options and prices are usually specified in the contract.
  2. Purchase the Solar PV System: Buy the entire solar PV system at market price, often determined through an appraisal, but this may cost more than completing your lease.
  3. Transfer Your Solar Lease Agreement: Transferring your lease to a new homeowner may be an option, but not all buyers may want to assume the lease.

Solar leases are designed to be difficult to exit, especially in the early years of the contract, making it challenging and costly to terminate them.

Read More : What Grows Bigger The More You Contract It

Exiting a Solar Lease After Installation:

How To Get Out Of Solar Panel Contract
How To Get Out Of Solar Panel Contract

Once the solar panels are installed, exiting a lease becomes more complicated. Most solar lease contracts are challenging to cancel without legal action, and it’s essential to consult your contract for specifics. Engaging a professional is strongly advised if you wish to remove solar panels safely.

Read More : How To Get Out Of A Contract With Car Mart

In summary

Before committing to a solar PPA or lease, thoroughly review your options, rights, and the terms of the agreement. Avoidance is often the best strategy to prevent issues down the road. Consulting with a reputable solar contractor can help you make an informed decision about your solar energy journey.