Texas Solar Panel Laws: Your Rights & How to Exit a Solar Contract

Texas homeowners who sign solar contracts generally have at least 3 federal business days to cancel under the FTC Cooling-Off Rule if the sale occurred at their home or away from the seller's permanent location. Beyond that window, Texas's Deceptive Trade Practices Act (DTPA) may provide additional grounds for cancellation if misrepresentations were made during the sales process. Texas's deregulated energy market creates unique considerations for solar agreements. We always recommend consulting a qualified Texas attorney before taking action.

Right to Cancel / Cooling-Off Period in Texas

If you recently signed a solar contract in Texas, your most immediate protection is the cooling-off period, a window during which you may cancel the contract without penalty. Understanding the specific rules and deadlines that apply in Texas is critical, as the timeline is generally strict.

Texas Right to Cancel: 5 Business Days (Occupations Code §1806.156)

Since September 1, 2025, Texas law has given buyers and lessees of residential solar energy systems five business days to cancel. Longer than the federal rule described below. Under Texas Occupations Code §1806.156, enacted by the Residential Solar Retailer Regulatory Act (SB 1036, 89th Legislature), a solar retailer must allow you to cancel “without penalty or further obligation” by giving written notice on or before the fifth business day after the date the agreement was executed.

Two details in this statute matter a great deal in practice:

• Your contract must state your deadline. The retailer is required to include the last calendar date of the cancellation period, together with a mailing address or e-mail address for sending your notice of cancellation.
• If that address is missing, your options widen. Where the agreement does not contain the required cancellation address, the statute generally permits cancellation during the cancellation period “by providing written notice of cancellation to the solar retailer by any reasonable method.”

In our assessment, this makes a careful read of your contract the first step for any Texas homeowner weighing cancellation. A missing or incorrect cancellation disclosure is a meaningful fact, and one many homeowners overlook.

Separately, as of September 1, 2026, residential solar retailers and solar salespersons must be registered with the Texas Department of Licensing and Regulation (TDLR) to sell or lease residential solar in Texas, and the statute’s prohibited-acts provisions became subject to TDLR administrative enforcement.

On timing: agreements executed before September 1, 2025 generally fall outside §1806.156. For those contracts, the federal Cooling-Off Rule and Chapter 601 discussed below are typically the operative provisions. Deadlines are strict and fact-specific; this is general information, not legal advice.

Federal FTC Cooling-Off Rule (3 Business Days)

The Federal Trade Commission's Cooling-Off Rule (16 CFR Part 429) generally provides Texas homeowners with 3 business days to cancel a sale that occurred at your home, workplace, or anywhere other than the seller's permanent place of business. Since many solar sales in Texas begin with door-to-door solicitation, a common practice throughout the Dallas-Fort Worth, Houston, San Antonio, and Austin metro areas, this rule typically applies to a significant number of residential solar transactions. Where both the federal rule and the Texas five-business-day right apply, the longer state window is generally the practical deadline to work from.

Under this rule, the solar company is generally required to:

• Provide you with two copies of a cancellation form at the time of sale
• Inform you of your right to cancel within 3 business days
• Process your cancellation and refund any payments within 10 business days of receiving your notice

Texas Home Solicitation Cancellation Rights (Bus. & Com. Code Ch. 601)

Texas Business & Commerce Code, Chapter 601 (Cancellation of Certain Consumer Transactions, formerly Article 5069-13.01) provides additional protections for home solicitation transactions. The right to cancel is set out at §601.051, and generally runs until midnight of the third business day where the purchase price is $25 or more. Under this statute, if a solar sale was conducted at your residence through door-to-door solicitation, you generally have the right to cancel the transaction. The seller is typically required to provide a written notice of your cancellation rights in the same language as the sales presentation.

Texas Property Code Section 5.014. Right of Rescission

For solar transactions that involve liens on property (such as solar loans with UCC filings), Texas Property Code Section 5.014 may provide additional rescission rights. If the solar financing arrangement places a lien on your home, you may have a separate cancellation window under this provision. The specifics depend on the type of financing and how the transaction was structured.

Texas Consumer Protection Laws Relevant to Solar

Texas Deceptive Trade Practices Act (DTPA)

The Texas Deceptive Trade Practices-Consumer Protection Act (Texas Business & Commerce Code, Chapter 17, Subchapter E) is one of the most powerful consumer protection statutes in the United States, and it may apply to solar contract disputes. Under the DTPA, homeowners may have grounds for legal action if the solar company engaged in:

• False, misleading, or deceptive acts: such as overstating energy production estimates, misrepresenting monthly savings, or making false claims about the system's performance
• Unconscionable actions: taking advantage of a consumer's lack of knowledge to a grossly unfair degree, which may apply if the salesperson used high-pressure tactics or complex financial terms to confuse the homeowner
• Breach of express or implied warranty: if the solar company made specific promises about system output, equipment quality, or financial returns that weren't delivered

The DTPA may allow consumers to recover economic damages and, in some cases, up to three times the amount of damages (treble damages) if the conduct was committed knowingly or intentionally. Attorney's fees may also be recoverable under the DTPA.

Texas Occupations Code. Home Improvement Contracting

Solar installation may be considered a "home improvement" under Texas law, which means additional contractor licensing and conduct requirements may apply. While Texas does not have a statewide contractor licensing requirement, certain municipalities (including Houston, Dallas, and San Antonio) require electrical contractor licenses. If the installer lacked proper local licensing, this could potentially provide grounds for contract rescission.

Federal Truth in Lending Act (TILA)

If your solar agreement involves financing (a solar loan), the federal Truth in Lending Act may provide additional protections. TILA requires clear disclosure of all loan terms, including interest rates, total cost, and monthly payments. If the solar company or its financing partner failed to provide accurate TILA disclosures, you may have the right to rescind the entire transaction within 3 years of closing.

Solar-Specific Regulations in Texas

Net Metering in Texas

Texas does not have a statewide mandatory net metering policy. Instead, the state's deregulated electricity market means that net metering availability and rates depend on your Retail Electric Provider (REP). Some REPs offer buyback programs for excess solar energy, but the rates and terms vary significantly. This is an important consideration because many solar sales pitches in Texas may include savings projections that assume favorable net metering rates. If those rates aren't available from your REP, the projected savings may not materialize.

Key points about Texas solar buyback programs:

• No guaranteed buyback rate: unlike states with mandatory net metering, Texas REPs set their own buyback rates, which can change
• Some REPs offer 1:1 credit: but many offer wholesale or avoided-cost rates that are significantly lower than retail
• Rate changes: your REP can modify or eliminate their solar buyback program, potentially reducing the economic benefits of your solar system
• ERCOT grid connection: most of Texas operates on the ERCOT grid, and interconnection standards are governed by PUCT rules

Public Utility Commission of Texas (PUCT) Rules

The Public Utility Commission of Texas (PUCT) oversees the state's deregulated electricity market and has established rules relevant to solar installations:

• PUCT Substantive Rule 25.211: governs interconnection of distributed generation (including residential solar) to the electric grid in ERCOT territories
• PUCT Substantive Rule 25.217: addresses distributed renewable generation, including requirements for metering and billing arrangements
• Interconnection standards: your solar system must meet PUCT interconnection requirements. If the installer failed to properly complete the interconnection process, this could affect your contract

Texas Property Tax Exemption

Under Texas Tax Code Section 11.27, solar energy devices are generally exempt from property tax. However, this exemption applies to the solar equipment's added value. It does not reduce your existing property tax. Some solar salespeople may misrepresent this benefit. If you were told solar panels would reduce your property taxes (rather than simply not increase them), this could potentially constitute a misrepresentation under the DTPA.

HOA Restrictions in Texas

Texas Property Code Section 202.010 generally prohibits homeowners' associations (HOAs) from banning solar panels outright. However, HOAs may impose reasonable restrictions on the placement of solar devices. If your HOA is preventing installation or if the solar company failed to account for HOA requirements, this may affect your contract obligations.

Common Solar Contract Issues in Texas

Based on publicly reported complaints to the Texas Attorney General's office and the Better Business Bureau, these are the most frequently reported solar contract issues in Texas:

How to Exit a Solar Contract in Texas. Step by Step

If you're a Texas homeowner looking to exit your solar contract, the appropriate approach depends on your specific situation. Below is a general framework. We always recommend consulting a qualified Texas attorney before taking action.

Step 1: Gather Your Documents

Before taking any action, collect the following:

• Your original solar contract (lease, PPA, or loan agreement)
• Any marketing materials, brochures, or written estimates you received
• Records of any verbal promises made during the sales presentation (write them down from memory if needed)
• Your electricity bills from before and after solar installation
• Any correspondence with the solar company
• Your solar system's actual energy production data (available through your inverter's monitoring portal)

Step 2: Determine Your Cancellation Window

• Within 5 business days of signing (most Texas residential solar agreements): Send a cancellation notice via certified mail immediately. Reference Texas Occupations Code §1806.156, plus the FTC Cooling-Off Rule and Business & Commerce Code Chapter 601 where they apply
• Past the cooling-off period but before installation: Check your contract for a pre-installation cancellation clause. Pre-installation cancellation guide →
• After installation: Proceed to Steps 3-5 below

Step 3: Review Your Contract for Exit Provisions

Carefully review your contract (or have an attorney review it) for:

• Termination clause: Most solar contracts include a provision for early termination, often with a buyout fee
• Performance guarantees: If the system is underperforming the guaranteed minimum, you may have contractual grounds for relief
• Transfer provisions: If you're selling your home, the contract may allow you to transfer the lease/PPA to the new owner
• Default provisions: Understand what constitutes a default and the consequences before taking any action

Step 4: Evaluate DTPA Claims

If you believe the solar company made misrepresentations during the sales process, consult a Texas attorney about a potential DTPA claim. Common bases for DTPA claims in solar cases include:

• Overstated energy production or savings projections
• Failure to disclose the annual escalator clause or its long-term impact
• Misrepresentations about net metering or buyback rates
• Failure to disclose UCC-1 lien filings
• False claims about property tax benefits
• Misrepresentation of the total cost over the contract term

Step 5: Send a Formal Demand

If you have a DTPA claim, your attorney will typically send a formal demand letter to the solar company. Under Texas law, this demand must generally be sent at least 60 days before filing suit. The demand letter often initiates a settlement negotiation that may result in contract cancellation, buyout reduction, or other relief.

Step 6: Consider Professional Exit Services

If you need assistance navigating the exit process, professional solar contract exit services may be an option. These companies typically review your contract and help identify potential exit strategies. Compare solar cancellation companies →

Texas Consumer Protection Agencies & Resources

If you're experiencing issues with a solar company in Texas, these agencies may be able to help:

Frequently Asked Questions About Texas Solar Panel Laws