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The answer
Checked October 21, 2026: TILA rescission applies to a consumer credit transaction in which the lender takes or keeps a security interest in your principal dwelling; you may cancel until midnight of the third business day after the last of signing, receiving the Truth in Lending disclosures and receiving two copies of the rescission notice.[1][2] If the notice or material disclosures were never delivered, the right can run for three years.[2] Many solar loans are unsecured or secured only by a UCC fixture filing on the panels. Regulation Z's definition of "security interest" excludes "incidental interests such as interests in proceeds, accessions, additions, fixtures,"[3] and in our reading that means rescission usually does not reach a solar loan. The regulation does not say whether a fixture filing that is the only collateral counts as "incidental," so treat this as our reading, not settled law. It can when the loan is secured by a mortgage or deed of trust on the home. Whether yours qualifies is a question for an attorney who has read your loan documents.
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What the TILA right of rescission is
Section 125 of the Truth in Lending Act, 15 U.S.C. 1635, lets a borrower cancel a consumer credit transaction "in which a security interest ... is or will be retained or acquired in any property which is used as the principal dwelling" of the borrower.[1] Regulation Z, 12 CFR 1026.23, carries the rule out: each consumer whose ownership interest is subject to the security interest may rescind, the lender must deliver two copies of a separate rescission notice, and the consumer has until midnight of the third business day after the latest of consummation, delivery of the notice, or delivery of all material disclosures.[2] Saturdays count as business days for this rule; Sundays and federal holidays do not.[4]
The rule exists for refinances, home equity loans and other credit that puts your house on the line. It does not apply to the loan you used to buy the house ("residential mortgage transactions") or to a same-lender refinance of an existing home loan, except as to new money.[1][2]
Does rescission reach a solar loan?
Usually not, sometimes yes. The test is how the loan is secured, not what it paid for.
| How the loan is secured | Rescission right? | Why |
|---|---|---|
| Unsecured installment loan (no lien of any kind) | No | No security interest in the dwelling[1][2] |
| UCC-1 or fixture filing on the panels only | Generally no, in our assessment | Regulation Z defines "security interest" as an interest in property that secures the loan and says it "does not include incidental interests such as interests in proceeds, accessions, additions, fixtures"[3]; in our reading a filing against the panels as fixtures is an interest in the panels rather than the house. The regulation does not address a fixture filing that is the only collateral, and courts can read a specific filing differently; ask an attorney. |
| Mortgage, deed of trust or home equity line on the home | Yes, unless exempt | A consensual lien on the principal dwelling is exactly what the rule covers[1][2] |
| Home improvement loan where the contractor also takes a lien | Possibly | Depends on whether the lien is a security interest in the dwelling under Regulation Z; Regulation Z excludes an interest that arises solely by operation of law, such as a mechanic's lien, from the disclosure definition but counts it as a security interest for rescission[3] |
| PACE or property-assessed financing | Different rules | PACE financing is repaid through the property tax bill, and the CFPB's PACE rule (effective March 1, 2026) brought it under Regulation Z; how rescission applies to a specific PACE assessment is a question for an attorney |
Your loan agreement will say what, if anything, secures it. Look for the words "security interest," "mortgage," "deed of trust," "UCC" or "fixture filing," and for the Truth in Lending disclosure box. If you received two copies of a "Notice of Right to Cancel" at signing, the lender itself treated the loan as rescindable.[2]
The 3-business-day clock, and the 3-year clock
For a loan the rule covers, you have until midnight of the third business day after the last of three events: you signed, you received the Truth in Lending disclosures, and you received two copies of the rescission notice.[2][4] If the lender never delivered the notice or the material disclosures, or they were materially wrong, the right does not start running; it expires three years after consummation, or when you sell or transfer the home, whichever comes first.[1][2]
In 2015 the Supreme Court held in Jesinoski v. Countrywide that a borrower exercises the right by sending written notice within the three years; the borrower does not have to file a lawsuit inside that window.[5] The lender can still dispute whether the right existed, which is usually where the fight goes.
See if our partner Solar Exit Group can help. No cost to submit. Paid partner, disclosed.
What rescission does if it applies
- The security interest becomes void and you owe no finance charge.[1][2]
- Within 20 calendar days of receiving your notice the lender must return any money or property you paid and take the steps needed to release the lien.[1][2]
- You then tender back what you received. For a solar loan that means the loan proceeds, which went to the installer; a court can modify the order of these steps.[2] This is the practical problem with rescinding a solar loan: the panels are on the roof and the cash is gone, so rescission usually ends in a negotiated unwind, not a clean return.
- It is not a refund of the system. Claims about the installer's work are separate; see the Holder Rule below.
How to exercise TILA rescission
- Confirm the loan is secured by your home. Read the loan agreement and any recorded lien. If it is unsecured or fixture-only, stop here and use the routes under "If rescission does not apply."
- Count the days. If you are inside the three business days, send the notice now. If the lender skipped the notice or the disclosures, the three-year window may be open.[2]
- Send written notice to the lender's address on the rescission notice or the loan agreement, by a method you can prove, stating that you rescind the transaction under 15 U.S.C. 1635 and 12 CFR 1026.23. Keep a copy and the proof of delivery.[1][2]
- Keep paying while the lender responds. A lender that disputes the rescission will treat missed payments as a default.
- Get an attorney for the unwind. The tender-back step and any lender pushback are where counsel earns the fee; the statute lets a court award costs and a reasonable attorney's fee to a borrower who establishes a right of rescission (15 U.S.C. 1640(a)(3), referenced in section 1635(g)), which is why some consumer attorneys take these cases without an upfront fee.[1]
If rescission does not apply to your solar loan
- Signed at home in the last 3 business days? The FTC Cooling-Off Rule and most state home solicitation laws let you cancel the sale itself in writing, no security interest needed.[6] See cancel solar before installation.
- Installer misled you or never finished? The Holder Rule notice in most installer-arranged loans lets you raise those claims against the lender, up to what you have paid.[7] See the FTC Holder Rule and solar loans.
- State law. Some states give a separate cancellation right for solar sales; see our state guides.
- Payoff, refinance or sale. The routes that do not depend on a legal claim: how to get out of a solar loan, solar loan refinance, selling a house with a solar loan.
- Lender will not respond? File with the CFPB.[8]
We do not advise homeowners to stop making payments or breach contractual obligations. Rescission is exercised by written notice, not by withholding payments. Keep paying while you or your attorney send the notice and the lender responds; a lender that disputes your right to rescind can still report missed payments.
Disclosure: We may earn compensation when you contact companies through our site. This does not change our ratings. Our partner for solar loans (all lenders except Tesla) and Sunnova PPAs is Uso Holdings LLC d/b/a Solar Exit Group; see authorized partners. SolarPanelExit.com is not a lender, law firm or credit counselor and is not affiliated with any lender named on this page.
Frequently asked questions
Can I rescind a solar loan under TILA?
Only if the loan is secured by a security interest in your principal dwelling, such as a mortgage or deed of trust. Many solar loans are unsecured or secured by a UCC fixture filing on the panels, and Regulation Z excludes incidental interests such as fixtures from its definition of a security interest, so in our reading rescission usually does not apply; that reading is not settled law. An attorney who reads your loan documents can tell you which kind you have.
How long do I have to rescind under the Truth in Lending Act?
Until midnight of the third business day after the last of signing, receiving the Truth in Lending disclosures and receiving two copies of the rescission notice. If the lender never delivered the notice or the material disclosures, the right can last three years from consummation or until you sell the home, whichever comes first.
What is the 3-year TILA rescission rule?
If the lender failed to deliver the required rescission notice or material disclosures, the three-business-day period never starts and the right to rescind expires three years after the loan was made, or on sale or transfer of the home. Under Jesinoski v. Countrywide (2015), written notice within those three years is enough; you do not have to sue inside the window.
Is a UCC fixture filing a security interest in my home?
Not for the rescission rule, in our reading. Regulation Z defines a security interest as an interest in property that secures the loan and says it does not include incidental interests such as fixtures. In our reading a filing against the panels as fixtures is an interest in the panels, not the house, but the regulation does not address a fixture filing that is the only collateral. Courts can read a particular filing differently, so treat this as a starting point, not a conclusion.
What happens after I rescind a loan?
The security interest becomes void and you owe no finance charge. The lender has 20 calendar days to return what you paid and release the lien, and you then tender back what you received. For a solar loan the proceeds went to the installer, so the unwind usually has to be negotiated or ordered by a court.
Does rescinding the loan cancel the solar contract?
No. Rescission addresses the credit transaction. The installation contract, the panels on the roof and any claim about the installer's work are separate. If the installer misled you, the FTC Holder Rule may let you raise those claims against the lender, and the FTC Cooling-Off Rule covers a sale signed at home in the last three business days.
Still paying a solar loan (not Tesla) or a Sunnova PPA? See if our partner Solar Exit Group can help. No cost to submit. Paid partner; it does not change our ratings.
Sources
Checked October 21, 2026. Lender policies, servicer details and contact information change; confirm on the linked primary source and in your own loan agreement before you act.
- Statute15 U.S.C. 1635, Right of rescission as to certain transactions (Cornell LII)
- Regulation12 CFR 1026.23, Right of rescission (Regulation Z, Cornell LII)
- Regulation12 CFR 1026.2, Definitions, including (a)(25) "security interest" (Regulation Z, Cornell LII)
- RegulatorCFPB, What is the right of rescission?
- Court opinionJesinoski v. Countrywide Home Loans, Inc., 574 U.S. 259 (2015) (Cornell LII)
- Regulation16 CFR 429.1, FTC Cooling-Off Rule (Cornell LII)
- Regulation16 CFR 433.2, FTC Holder Rule notice (Cornell LII)
- RegulatorCFPB, Submit a complaint
Disclaimer: This page is not legal advice. It is general information, not legal, tax or financial advice, and it does not create an attorney-client relationship. Results vary by individual situation. We do not advise homeowners to stop making payments or breach contractual obligations. Consult a qualified attorney licensed in your state before acting on your solar contract or loan. We may earn compensation when you contact companies through our site. This does not change our ratings. Solar Exit Group (Uso Holdings LLC) is a paid partner; see authorized partners. See our Ownership Disclosure, Advertiser Disclosure and Methodology.