SOLAR EXIT GUIDE
Frustrated with your solar lease payments? Before you stop paying, understand the real consequences — and the safer alternatives that can protect your credit and your home.
Published April 13, 2026 · Not legal advice · Our methodology
When solar lease payments feel burdensome — especially if your savings haven't matched what was promised — the temptation to simply stop paying your solar lease can be strong. "What happens if I stop paying my solar panels?" is one of the most common questions homeowners ask, based on our research. However, the solar lease default consequences can be severe — from credit damage to lawsuits. This guide explains exactly what happens, whether a solar company can sue you for not paying, and the safer paths available to exit your contract.
In This Guide
When you stop making solar lease payments, the consequences don't happen all at once — but they do escalate quickly. Based on our research into common solar lease agreements, here's what typically happens:
Most solar lease contracts include provisions for late payment fees. These typically range from $25 to $50 per missed payment, though some contracts charge a percentage of the monthly amount. These fees accumulate and add to the total amount you owe.
Many solar lease agreements contain acceleration clauses that allow the company to demand the entire remaining balance of the lease — not just the missed payments — once you default. On a 20-year lease, this could mean tens of thousands of dollars become due immediately. This is one of the most consequential and often overlooked provisions in solar contracts.
If the solar company decides to repossess the equipment, the contract may require you to pay for the cost of removal. Solar panel removal and roof restoration typically costs $5,000 to $15,000 or more, depending on the system size and your roof type. The company may also charge for any damage to the equipment.
Important: We do not advise homeowners to stop making payments or breach contractual obligations. Even if you believe your contract is unfair or you were misled, continuing payments while pursuing legal remedies protects your credit and strengthens your legal position.
While timelines vary by company, here is a general overview of what you can typically expect after missing solar lease payments:
| Timeframe | What Typically Happens |
|---|---|
| 1-15 days late | Late payment notice sent; late fee applied to your account |
| 30 days late | Second notice; may be reported to credit bureaus as 30 days past due |
| 60 days late | More aggressive collection calls and letters; credit damage worsens |
| 90 days late | Account may be considered in default; acceleration clause may be triggered |
| 90-120 days | Account may be sent to a third-party collections agency |
| 120-180 days | Company may initiate legal proceedings or UCC lien enforcement |
| 6-12 months | Potential lawsuit filed; system removal may be scheduled |
Key Insight: The exact timeline depends heavily on the specific solar company. In our assessment, larger companies like Sunrun and Sunnova tend to have more aggressive and systematic collection processes, while smaller companies may take longer to escalate — or may be more willing to negotiate. If your solar lease gets sent to collections, the collections process typically follows a predictable pattern.
If you stopped paying your solar lease, one of the most significant consequences is the damage to your credit score. This can affect your ability to get loans, credit cards, rent an apartment, or even get certain jobs.
Caution: If your solar lease is sent to collections, the damage to your credit score can take years to repair. Before you stop paying, explore the early termination fee option — it may be less costly than a collections account on your record.
The credit impact of a solar lease default depends on your starting credit score and overall credit history, but here's what generally happens:
Late payments and collections accounts remain on your credit report for up to seven years from the date of the first delinquency. This means a solar lease default in 2026 could still be affecting your credit in 2033. The Consumer Financial Protection Bureau (CFPB) provides free tools to understand and dispute credit reporting errors.
Most solar leases and PPAs include a UCC-1 financing statement (also called a UCC fixture filing) that's recorded with your state or county. This isn't a traditional lien on your property, but it does have significant implications.
A UCC-1 filing is essentially a public notice that the solar company has a security interest in the solar equipment on your roof. It's designed to protect the company's ownership of the panels, which they technically still own under a lease agreement. Learn more about UCC liens on solar panels →
Guide: Solar panel UCC lien removal →
Yes, solar companies can and do sue homeowners who default on their lease agreements. If you're wondering "can solar company sue me for not paying?" — the answer is that it depends on several factors, but legal action is a real possibility.
If the solar company sues, they may seek:
Real Scenario: Based on our research, we've seen cases where homeowners who stopped paying a solar lease with $30,000+ remaining were sued for the full balance plus fees — totaling more than $40,000. The cost of fighting the lawsuit or paying a judgment can far exceed the remaining lease payments.
Struggling with your solar lease? Get a free contract review to explore your exit options — without risking your credit.
While solar leases and power purchase agreements (PPAs) are often discussed interchangeably, there are meaningful differences in how default plays out:
| Factor | Solar Lease Default | Solar PPA Default |
|---|---|---|
| Payment structure | Fixed monthly payment | Pay per kWh of electricity produced |
| Acceleration clause | Full remaining balance may be due | Full remaining balance may be due |
| Equipment ownership | Company owns the panels | Company owns the panels |
| Utility impact | May still receive solar electricity even if not paying | Company may remotely disable the system in some cases |
| Buyout calculation | Typically based on remaining payments | May be based on fair market value or remaining payments |
The key distinction is that PPA payments are theoretically tied to energy production, while lease payments are fixed. However, the consequences of default — collections, credit damage, liens, and potential lawsuits — are generally similar for both. Understand solar leases vs. PPAs vs. loans →
A common question we hear is whether you can stop paying if your solar company has gone bankrupt or out of business. The answer is more nuanced than you might expect.
In most cases, when a solar company files for bankruptcy, your lease contract doesn't simply disappear. Instead, the contract is typically:
The new owner of your contract generally has the same rights to collect payments as the original company. What to do when your solar company goes bankrupt →
That said, a solar company's bankruptcy can sometimes create opportunities:
Important: Even if your solar company appears to be defunct and no one is collecting payments, we still recommend consulting an attorney before stopping payments. The contract may have been quietly transferred, and missed payments could still damage your credit. Solar company bankruptcies in 2026 →
If you're unhappy with your solar lease, there are several alternatives to defaulting that can protect your credit and financial standing:
Many solar companies are willing to negotiate, especially if the alternative is a costly collections process. Our guide to negotiating a solar buyout covers the strategies that tend to work best. You may be able to:
If you were misled during the sales process, you may have legal grounds to challenge the contract. Common grounds include:
If you're selling your home, you may be able to transfer the lease to the new homeowner. While this isn't always easy — the new owner typically needs to qualify and agree to assume the lease — it can be an effective exit strategy. How to transfer a solar lease →
Most solar leases have buyout provisions that allow you to purchase the system outright. The buyout amount varies but is typically based on the remaining payment schedule or fair market value of the equipment. Use our solar buyout calculator →
A qualified attorney can review your specific contract and situation to identify legal options you may not be aware of. Many consumer protection attorneys offer free consultations. Find a solar panel lawyer →
Some companies specialize in helping homeowners navigate the solar contract exit process. See our review of solar cancellation companies →
Ownership Disclosure: SolarPanelExit.com and TRU Solar Cancellation share common ownership. TRU Solar Cancellation offers a Solar Exit Document Package for a one-time $450 fee. TRU is not a law firm and does not provide legal advice. See our full ownership disclosure for details.
If you stop paying your solar lease, the solar company will typically send late payment notices, then escalate to collections activity. This can result in significant credit score damage, UCC lien enforcement against the equipment, potential lawsuits for the remaining balance, and in some cases the company may remove the system at your expense. The timeline and severity vary by company and state. Results vary by individual situation.
It is possible. Solar companies may pursue legal action to recover the remaining balance on your lease, which could include the full remaining contract value plus fees and interest. Whether they sue depends on the amount owed, the company's collection practices, and your state's laws. Some companies are more aggressive about litigation than others. Consult a solar panel lawyer →
Solar leases typically involve a UCC-1 financing statement (fixture filing) rather than a traditional property lien. However, this filing can still complicate the sale or refinancing of your home. If the solar company obtains a court judgment against you for unpaid lease payments, they may be able to place a judgment lien on your property depending on your state's laws. Learn about UCC liens →
A solar lease default can cause your credit score to drop significantly — potentially 100 points or more depending on your starting score and credit history. Late payments, collections accounts, and any resulting court judgments all appear on your credit report and can remain there for up to seven years.
Generally, yes. When a solar company goes bankrupt, your lease contract is typically sold to another company or financial institution as part of the bankruptcy proceedings. The new owner of your contract retains the right to collect payments. However, bankruptcy may create negotiation opportunities, and if no entity is collecting or servicing the lease, your situation may be more nuanced — consult an attorney.
Yes. Safer alternatives include negotiating a reduced buyout directly with the solar company, transferring the lease to a new homeowner if you sell your property, disputing the contract on legal grounds such as misrepresentation, consulting a consumer protection attorney about your options, or using a solar cancellation service to help navigate the exit process. These approaches protect your credit while working toward resolution.
Get a free contract review to explore your exit options — without risking your credit or financial standing.
Disclaimer: This article is for informational purposes only and is not legal advice. Solar lease and PPA contract terms vary. Results vary by individual situation. We do not advise homeowners to stop making payments or breach contractual obligations. SolarPanelExit.com and TRU Solar Cancellation share common ownership. Consult a qualified attorney before taking action regarding your solar contract. See our Ownership Disclosure, Advertiser Disclosure, and Methodology.