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).

45 thoughts on “Cancelling a solar lease contract

  1. Arthur Johnson

    I have a solar lease option and agreement that I signed off on in May 2020. I am sort of regretting it, since I have had more companies make better offers with more acres and at a better premium. Since they are in the early process, do I have any way of possibly stopping the deal, even if it cost a few dollars? Any suggestions would be greatly appreciated. I live in Virginia.

    Reply
  2. David Gonzalez

    I just had a new roof installed
    Squirrels made a nest under my solar panels damaging my roof
    I had to pay $500 to get the panels removed which was money I don’t have
    Because of the damage to the roof, I had leaks in my ceiling which I know have to fix as well as new insulation.
    When I signed the contract with Vivint Solar, they said that if my panels ever needed to be removed, it would only cost $250
    I have complained to Vivint that I am not seeing the money savings promised. They claim my system is operating fine and that I should consider adding more panels
    The even had a sales person call me and he became nasty when I stated that I would never add any more panels and regret getting the panels I have.
    I feel that I was lied to and they misinformed because of shady sales promises
    Is there any legal action that I can take
    I don’t want these solar panels put back on my new roof
    I can’t afford to get them taken off if leaks occur in my house again

    Reply
  3. Kimberley Fisher

    Has anyone on here thought to sue the company for consumer fraud? Issue you will have if these promises are not in writing and you signed a contract with buyout cost and increase in lease rates you are kinda screwed. Court May at least allow for a smaller buyout cost but you’re still gonna pay an attorney. Wish someone had written statements so you all could sue. I just walked away from putting an offer on a really nice house bc of the solar panel lease. Feel bad for the sellers. They are a young couple with a baby. Lease is $192 per month and their reg electric can’t be more than $60- house is tiny.

    Best of luck to all of you and thank you for sharing. I’m not going to second guess my opinion after reading all your horror stories.

    Reply

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