cancel a solar lease

Cancelling a solar lease contract

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If you were to ask your neighbor who installed solar five years ago about how they financed the system, it’s likely that they’re leasing their solar panels from a large, national solar provider like Vivint or SunRun. It was only recently that solar ownership options – either buying the system with cash upfront or financing through a loan – became the more popular option for homeowners investing in new solar panel systems.

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At EnergySage, we sometimes get questions about how to cancel an old solar lease contract. Truthfully, it can be difficult to cancel a solar lease without some sort of legal action. However, there may be other options available to you depending on your specific circumstances.

Why do homeowners look to cancel solar lease contracts?

There are a lot of happy solar customers, and for good reason – properly installed and financed solar panel systems can generate electric bill savings for more than 20 years. In spite of this, there are a number of reasons why you may be trying to cancel your solar lease:

Economics

If you find the right financing option, installer, and equipment, your solar panel system should save you money. While solar lease options typically have less financial benefit to homeowners than owning a system, a good solar lease can still save you anywhere from 10 to 30 percent compared to what you’re paying your utility company for electricity.

The savings you see with a leased solar panel system vary depending on how much electricity your solar panels generate, the rate your leasing company charges, and whether or not your contract includes an annual escalator. While it’s rare that someone pays more money on their electricity bill after going solar, it’s possible to experience higher monthly costs if you’re paying your solar leasing company higher rates than what your utility company is charging for grid electricity. Even if the introductory leasing rate was lower than the utility offering, you may be paying a higher rate now if your annual lease escalator outpaced your utility’s rate increases.

Moving

Life happens, and even if you don’t plan on leaving your home during the 20 years of your solar lease contract, you may have to sell unexpectedly.

When you’re selling a home with a leased solar panel system on the roof, there are options outside of canceling the leasing arrangement: you may be able to transfer the lease to the new homeowner, buy-out the remainder of the lease and have the system removed, or purchase the solar panel system at market-value and leave it on your roof. You may have one, two, or all three of these options available depending on the leasing agreement you signed.

Generally, prospective home buyers consider rooftop solar panel systems an attractive feature, especially when it will save them money on their new utility bills. However, some prospective buyers may not want to inherit a lease they didn’t sign up for.

Service

Another reason you may want to cancel a solar lease is because of the service you’re receiving from your solar lease provider. Large solar companies like SunRun have both positive and negative reviews regarding their customer service. Many complaints about solar leasing companies revolve around service post-installation of the system, such as responding to maintenance calls, questions about bills, and more.  

How to cancel a solar lease post-installation

Most solar lease contracts are difficult to cancel without legal action. Lease agreements tend to last anywhere from 10 to 20 years and are ironclad in structure. In fact, Bloomberg published a story about a prospective homebuyer who experienced difficulties buying a home that had a leased SunRun solar panel system on it – the lease remained in effect even after the death of the person who owned the home and signed the leasing agreement, as the lease was tied to the title of the home.

However, even if you cannot cancel your solar lease, there are often other options available to explore. If you want to cancel your lease because you’re selling your property, you typically have the option to transfer your lease to the new homeowner. Otherwise, many solar leasing contracts specify buy-out options and prices directly in their contract (for example, you can buy the system for $15,000 at year five of your contract). If your contract doesn’t specify exact dates for buyouts, many solar leasing providers offer the opportunity to back out of a solar lease contract at any point by purchasing the solar panel system at the fair market value. This value will change depending on how long your system has been operating and market prices at the time. Importantly, if you buy a previously-leased solar panel system, you may not be eligible to claim the federal investment tax credit (ITC) given that it has already been claimed by the original owners of the system (the leasing company).

Can I purchase more solar panels if I have a leased system on my roof?

Many homeowners wonder if they can buy additional solar panels to add-on to their leased system. While it’s physically possible to add solar panels to an existing system, you can’t purchase additional solar panels to hook up to a system that’s owned by your leasing company. You may be able to work-around this rule if you can purchase an entirely new solar panel system (panels, inverter, etc.) and connect it to a separate electric meter on your property.

How to cancel a solar lease contract pre-installation

If you haven’t had your solar panel system installed yet, you may still have the option to cancel your lease contract. Leasing contracts from SunRun, Vivint, or other third-party owned providers offer a short time frame where you can cancel the contract without incurring any penalty. This time frame may be different from one leasing company to another, but you can expect it to be around 30 days after signing a contract.

In addition, most leasing contracts specify other unexpected circumstances under which cancellations are allowed. For example, if you sign your contract before a roofing evaluation only to find out you need to re-roof prior to going solar, your leasing agreement should allow you to terminate the contract due to the unforeseen additional expense.

Before signing any solar contract, leasing or otherwise, always read the fine print and be aware of your rights to cancel.

Shop around to find the best deal

So long as you find the right installer, equipment, and financing option, you shouldn’t experience buyers remorse after going solar. The best way to ensure you’re getting a good deal before signing a contract is to shop around. By signing up on the EnergySage Solar Marketplace, you can receive up to seven quotes from local installers to compare. These quotes will include pricing and savings estimates that you can compare with other options. If you’d prefer to start with a ballpark estimate of solar costs and savings on your property, try our Solar Calculator.

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About Kerry Thoubboron

Kerry has worked in solar for more than 5 years, starting out as an Energy Advisor helping customers compare their options and make well-informed solar decisions. She graduated from Boston University with a degree in Environmental Analysis and Policy. Outside of work, you can find Kerry snowboarding, watching The Office, or having passionate debates about which New England state is best (spoiler: it's Vermont).

83 thoughts on “Cancelling a solar lease contract

  1. AvatarGene

    Thank you all for your reviews it helps me make the decision rather are not I should go with vivint a sonrun company. I am thinking about purchasing a Richmond American Home New construction outside of the Sacramento area and Vivint Sunrun is the installer contractor for solar.
    But I’m having 2nd thoughts after looking at the reviews on Consumer Affairs site and the BBB And now this site Wow I am not impressed with what I have found.

    Reply
  2. AvatarJoao Brito

    I leased a system from Sunnova 6 years ago for 25 years, what was I thinking?
    First issue occurred when I asked for my production numbers, that got their attention and shortly thereafter sent technicians to correct the problem, being that they are responsible for a contractual amount of production. This past year, again, system not producing required amounts and verified that squirrels were feasting on the system wires. Sunnova fixed the problem after two visits between March and August 2020.
    Recently a roof leak, under the panels, began to damage my master ceiling.
    I’ve called Sunnova 8 times, sent 10 emails and requested a call back from someone with decision making capacity.
    All I’ve gotten so far, is a suggestion to look at a specific paragraph in the lease agreement for “roof warranty”, which protected me for 1 year upon installation.
    I can’t get a contractor to repair my roof because they don’t want to touch the panels, I’ve asked Sunnova how much they’ll charge to diagnose the problem, no answer and they’ve closed my case.
    I personally believe, that my issues with the roof, have something to do with the last services they performed to fix the squirrel problems, not once did I have a problem with my roof prior.
    Any suggestions how I should approach this.
    I even asked for the cost to cancel contract, they answered $44,000.00

    Reply
    1. AvatarSusan

      We just dealt with Sunnova. Nightmare. I thought I was taking crazy pills. I suggest we all get a lawyer and do a class action suit against Sunnova. Vivant had one. These solar companies are ruining NM.

      Reply
    2. AvatarAntonio Adorno

      OMG are you sure your not talking about Tesla, your story is so similar to all my issues with Tesla, I believe we should start a class action law suit against all these Solar monsters. No professionalism, no Care about the customer, who is paying them hundreds of dollars per month. No call backs, weeks go by before they respond to emails, Pigeons and doing some simple abatement of the panels is my issue, to say the least. No one at Tesla has a last name, how do you speak to people that have no last name, no one at Tesla has a title or job description, other than Energy Customer Support. I asked to speak to a manager or someone in authority, I was told “why your speaking with me” I called my local and regional news station to see if they can help and or at minimum put this issue on the news, to worn others to stay away.

      I also asked for a buy out price and I was told that they only do buyouts once a year and we missed that date, so we had to wait to the next time they excepted buy outs. Mean while my panels that I have had for only 5 years went completely dead for 4 months before they decided to come out and take care of the issue, mean while I was making my 175.00 monthly payment, no credit , no reimbursement, nothing.

      I know this doesn’t help you, but I swear I thought you where in my head and telling my story.

      Reply
  3. AvatarJames

    Solar city installed the panels incorrectly and causing roof leaks. They refuse responsibility. Now we are stuck. And we pay MORE utility bill with the panels. They are liars and cheats

    Reply
  4. AvatarAnitra

    I have 27 solar panels with Sunrun and just recently had to pay $250 to APS. On top of the fact that I have pigeons living under them… thus is ridiculous! I am VERY REGRETFUL for even getting solar panels! If this helps anyone, DO NOT GET SOLAR.. it’s a rip-off!

    Reply

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