Solar contracts are typically 20-25 pages of dense legal language. Most homeowners sign without fully understanding what they've agreed to. This checklist helps you systematically review every critical section — whether you're about to sign, or you're reviewing an existing contract for exit options. Check off items as you go.
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Contract Basics
Start with the fundamentals. These determine the nature of your agreement and your basic obligations.
SECTION 1: CONTRACT TYPE & TERMS
1. Contract Type Identification High Risk
Is it a lease, PPA (power purchase agreement), loan, or outright purchase? Many homeowners were told they were "buying" solar but actually signed a 20-25 year lease or PPA. Check the title page and first paragraph carefully. The contract type determines your ownership rights and exit options.
2. Contract Length High Risk
What is the total term? Solar leases and PPAs typically run 20-25 years. Some auto-renew for additional 5-10 year periods unless you provide written notice 60-90 days before the term ends. Look for language about "initial term" and "renewal terms."
3. Monthly Payment Amount Medium Risk
What is your exact monthly payment? For PPAs, what is the per-kWh rate? Compare this to your current utility rate. Calculate the total cost over the full contract term to understand your true financial commitment.
4. Escalator Clause High Risk
Does the payment increase annually? Many solar leases and PPAs include a 1-3% annual escalator. A 2.9% annual increase means your payment nearly doubles over 25 years. Calculate your payment in year 10, 15, 20, and 25 to see the full impact. Compare this to projected utility rate increases in your area.
5. Total Cost of Contract High Risk
Calculate the total amount you'll pay over the full contract term (including escalators). For a $150/month lease with 2.9% annual escalation over 25 years, you'll pay approximately $66,000 total. Compare this to the cost of purchasing an equivalent system outright (typically $20,000-$35,000 after incentives).
SECTION 2: CANCELLATION & EXIT OPTIONS
6. Cancellation / Cooling-Off Rights High Risk
Does the contract include a cancellation notice? Federal law requires a 3-business-day cooling-off period for home solicitation sales. Check that you received a "Notice of Cancellation" form. If you didn't, this may extend your cancellation window significantly in some states.
7. Early Termination Fee High Risk
What is the penalty for early cancellation? Some contracts require you to pay the remaining balance of the entire contract (which could be $30,000+). Others have a declining buyout schedule. Look for "early termination," "buyout," "prepayment," or "default" sections.
8. Buyout Options Medium Risk
Can you purchase the system at fair market value or a set price at specific points during the contract? Many leases and PPAs offer purchase options at year 7, 10, or end of term. Note the pricing formula — "fair market value" can be ambiguous and sometimes higher than expected.
9. Transfer Provisions Medium Risk
Can you transfer the contract to a new homeowner if you sell? What are the requirements (credit check, approval process)? Some contracts make transfers extremely difficult. Others require the buyer to assume the full remaining term. Check if there's a transfer fee.
SECTION 3: PERFORMANCE & GUARANTEES
10. Production / Performance Guarantee Medium Risk
Does the contract guarantee a minimum energy production level? If so, what happens if the system underperforms? Some contracts include a "performance guarantee" with credits or refunds for underproduction. Others guarantee nothing. Compare the guaranteed production to what the sales rep verbally promised.
11. Savings Guarantees High Risk
Were you promised specific dollar savings? Is that promise in the contract? Verbal savings promises from sales reps are common but may not appear in the written agreement. If the contract doesn't guarantee specific savings, the verbal promise may be difficult to enforce without additional evidence (texts, emails, marketing materials).
12. Equipment Warranty Lower Risk
What warranties cover the panels, inverters, and installation? Who is responsible for repairs — you or the solar company? For leases/PPAs, the company typically handles maintenance. For loans/purchases, check the manufacturer warranty (panels: 25 years typical; inverters: 10-15 years; workmanship: varies widely).
SECTION 4: LIENS, FILINGS & PROPERTY RIGHTS
13. UCC Financing Statement (Lien) High Risk
Does the contract authorize a UCC-1 filing? This is a lien on the solar equipment (and effectively your property) that can complicate home sales and refinancing. Standard for leases and PPAs, but you should know about it.
Learn about UCC liens →
14. Roof Rights & Access Medium Risk
Does the contract give the solar company rights to access your roof for maintenance, monitoring, or equipment removal? What notice is required? Some contracts include broad easement language that may affect your ability to re-roof, add skylights, or make other modifications to your home.
15. Equipment Ownership High Risk
Who owns the solar equipment? In a lease or PPA, the solar company owns the panels on your roof for the entire contract term. In a loan, you own the equipment but the lender has a security interest until the loan is paid off. In a cash purchase, you own everything immediately. This distinction affects insurance, maintenance responsibilities, and tax credits.
SECTION 5: INSURANCE & LIABILITY
16. Insurance Requirements Medium Risk
Are you required to carry specific insurance coverage for the solar equipment? Many contracts require homeowners to maintain minimum insurance levels and name the solar company as an additional insured. Failure to maintain insurance may be considered a breach. Check with your homeowner's insurance to confirm coverage.
17. Damage Liability Medium Risk
Who is responsible if the panels damage your roof? What about storm damage, fire, or other acts of nature? Some contracts make the homeowner liable for damage to the solar company's equipment, even in situations beyond your control. Look for indemnification clauses.
SECTION 6: TAX CREDITS & INCENTIVES
18. Federal Tax Credit (ITC) High Risk
Who receives the federal solar Investment Tax Credit? If you have a lease or PPA, the solar company gets the 30% ITC — not you. Only system owners (purchase or loan) can claim the tax credit. If the sales rep told you that you'd receive the tax credit under a lease/PPA, this may constitute misrepresentation.
19. State/Local Incentives Lower Risk
Does the contract address state or local rebates, SRECs (Solar Renewable Energy Credits), or net metering credits? Who receives these benefits? In some contracts, the solar company retains all SRECs even though the energy is generated on your property.
SECTION 7: LEGAL & DISPUTE RESOLUTION
20. Arbitration Clause High Risk
Does the contract require mandatory binding arbitration? This means you waive your right to sue in court or participate in a class action lawsuit. Many solar contracts include arbitration clauses that heavily favor the company. Look for "dispute resolution," "arbitration," or "waiver of jury trial" sections.
21. Governing Law & Venue Medium Risk
Which state's law governs the contract? Where must disputes be filed? Some contracts specify a state far from where you live, making it expensive and inconvenient to pursue legal action.
22. Default Provisions High Risk
What happens if you default (miss payments, lose insurance, etc.)? Can the company accelerate the entire remaining balance? Can they remove the equipment at your cost? Can they damage your credit? Understand the consequences before they happen.
SECTION 8: INSTALLATION & PERMITS
23. Permit & HOA Approval Medium Risk
Who is responsible for obtaining permits and HOA approvals? What happens if permits are denied or the HOA rejects the installation? The contract should address this — if it doesn't, you may still be bound to the agreement even if installation can't proceed.
24. Installation Timeline Lower Risk
Is there a guaranteed installation date or completion window? What happens if installation is delayed for months (which is common)? Some contracts start your payment obligation from the signing date, not the installation date — meaning you could be paying before the system is even producing energy.
25. System Specifications Medium Risk
Does the contract specify the exact equipment (panel brand, model, number of panels, inverter type, system size in kW)? Vague specifications allow the company to substitute lower-quality components. Compare the written specs to what the sales rep described.
Found red flags in your contract? Get a free professional contract review to understand your options.
How to Use This Checklist
This checklist is designed to be used in two ways:
Before You Sign
If you're considering a solar contract, go through each item before signing. Take the contract home — never sign on the spot during a sales presentation. A reputable company will give you time to review. If they pressure you to sign immediately, that's a red flag in itself.
- Request a copy of the full contract (not just a summary or proposal)
- Read every page, not just the first and last
- Ask the sales rep to explain any terms you don't understand — in writing
- Compare verbal promises to what's actually in the written agreement
- Have an attorney review the contract if the total commitment exceeds $20,000
Reviewing an Existing Contract
If you've already signed, this checklist helps you identify potential issues that may support cancellation, negotiation, or legal action:
- Items marked "High Risk" that weren't disclosed to you may indicate misrepresentation
- Missing cancellation notices may extend your cooling-off rights
- Verbal promises not reflected in the written contract may be grounds for rescission
- Contract terms that violate your state's consumer protection laws may be unenforceable
Important: Finding issues in your contract doesn't automatically mean you can cancel. Contract law is complex and varies by state. This checklist helps you identify potential problems — a qualified solar panel attorney can evaluate whether those issues give you legal grounds for action. We do not advise homeowners to stop making payments or breach contractual obligations.
Red Flags That May Support Cancellation
Based on our research and the experiences reported by homeowners, these are the contract issues most commonly associated with successful cancellations:
- ⚠ No cancellation notice provided — may extend cooling-off period indefinitely in some states
- ⚠ Verbal savings promises not in contract — potential misrepresentation claim
- ⚠ Misrepresented contract type — told it was a purchase but it's a lease
- ⚠ Undisclosed escalator clause — payments increase without clear disclosure
- ⚠ Tax credit misrepresentation — told you'd get the ITC under a lease/PPA
- ⚠ System underperformance — significant gap between guaranteed and actual production
Frequently Asked Questions
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Disclaimer: This checklist is for informational purposes only and is not legal advice. Contract terms and their enforceability vary by state and by individual contract. 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. See our Ownership Disclosure and Advertiser Disclosure.