How To Cancel Solar Contract After Installation?
Going solar and installing rooftop solar panels can provide great long-term financial and environmental benefits. However, situations may change where you need or want to exit your solar agreement even after the equipment has already been mounted and activated. So how feasible is it to cancel an installed residential solar system contract? The short answer is – it’s definitely possible but involves navigating complex legal and financial considerations.
In this comprehensive guide, we will explore the various processes, penalties, alternatives and key factors involved in terminating solar contracts post-installation to empower you to make informed decisions.
Specifically, we will cover:
- Important considerations before entering a solar contract
- Valid conditions that allow contract cancellation after installation
- Step-by-step process for formally exiting an active solar agreement
- Potential fees and downsides to be aware of
- Options for transferring your solar lease when moving homes
- Consequences of simply defaulting on payments
- Whether cancellation could impact reputation with solar companies
- Alternative solutions besides contract termination
- Key takeaways and concluding advice
So if you are looking to get out of an already-installed solar panel contract or just want to understand what it would entail, read on for insights.
What Should I Know Before Signing a Solar Contract?
Getting the right information beforehand is crucial to avoid the need to cancel a solar agreement later on. Here are key considerations when evaluating rooftop solar options:
Research Solar Companies Thoroughly
Take time to vet potential solar panel installation and services providers in your area. Check online customer reviews, verification sites like SolarReviews.com, and talk to previous clients. This helps avoid agreements with unscrupulous or unreliable companies.
Understand All Terms and Conditions
Carefully read the fine print in solar contracts before signing up. Pay particular attention to clauses related to termination policies, fees involved, reasons allowed for cancellation, and equipment ownership considerations. Know what you are committing to.
Consider Financing Versus Leasing Caveats
While $0 down solar leases may be attractive, financing a solar system purchase often works out cheaper long-term. Study the pros and cons of solar loans, PPAs, cash purchases and leased systems as they relate to your goals.
Know Your State’s Consumer Protection Laws
States have varying solar regulations, incentives and consumer rights statutes. Research the rules in your state so you can invoke them as needed to exercise contract cancellation or related options.
When Can I Cancel My Contract After Installation?
Seeking contract termination after solar installation is generally only permitted under certain conditions, usually outlined in the original signed agreement.
Cooling-Off Period
Most solar contracts allow cancellation without penalty within a short “cooling-off” window after signing, typically 5-15 days. Act fast if possible.
Proof of Unsatisfactory System Performance
If your solar panels are underperforming significantly compared to the contractor’s written power output production guarantees, this may constitute a breach of contract, allowing termination.
Relocating to a New Home
Moving homes where transferring an existing solar lease is not feasible can be reasonable grounds for contract cancellation, subject to terms.
Financial Hardships Make Payments Unaffordable
Loss of job or fixed incomes limiting ability to meet solar power purchase financing obligations allow customers to exit if adequately documented.
Breach of Contract by Solar Company
The solar services provider failing to meet contractual system maintenance, production or other stubbed obligations can nullify the agreement.
Company Bankruptcy
Going out of business halts a solar installer’s capacity to satisfy panel system contracts. Verifying financial stability of providers again pays off here.
What is the Process for Cancelling My Installed Solar System?
Follow these key steps when initiating the process to terminate your post-installation solar contract:
Review Termination Clauses in Original Contract
Dig out your original signed agreement and read all fine print details related to early cancellation very carefully before proceeding.
Notify Company Officially Citing Your Reasons
Reach out to your solar panel company in writing stating intent to execute the contract’s termination clause. Specify which authorized condition qualifies you and provide supporting documents. Get formal written acknowledgment of receipt.
Be Prepared to Provide Documentation
Have financial statements, system performance data, inspection reports or other files as relevant ready to back up your termination request depending on the situation. The more evidence the better.
Expect to Negotiate Termination Fees
Whether stated explicitly or not, some form of penalty charges for early cancellation should be expected, requiring discussion to agree on reasonable settlement.
Formalize Cancellation in Writing
Once negotiations conclude with a mutual termination agreement, get it in writing officially signed by all parties involved. Keep this on record for future reference and obligations.
While convoluted, alerting your solar provider, evidencing your qualified reasons, providing paperwork and formalizing the exit in writing CAN get you out of a signed contract.
What Fees or Penalties Will I Have to Pay?
Terminating any active solar power system agreement post-installation often involves taking a financial hit in the form of penalty fees including:
Pre-Set Contract Termination Fees
Check your original signed contract – most specify pre-determined early cancellation fees you agree to, typically substantial amounts.
Removal and Re-Installation Charges
If contractual terms require you to pay equipment dismantling & retrieval fees when cancelling, these costs can add up quickly. Re-installation on a new property also expensive.
Legal Fees if Arbitration Involved
If terminating the contract ends up involving lawyers negotiating on your behalf, you take on these professional services costs.
Impact on Credit Score if Obligations Unmet
Not satisfying all financial commitments related to contract cancellation can hurt your credit rating if the solar company reports these delinquencies.
So while breaking an installed solar agreement is possible, you trade convenience for often sizable termination costs – factor them into any exit decisions.
Can I Transfer My Solar Contract to The New Homeowner?
Instead of outright cancellation, you may be able to transfer an existing solar lease when moving, selling your home or otherwise vacating the property with the panels by:
Reviewing Transferability Terms in Contract
Solar lease contracts typically contain provisions for transferring agreements intact to new homeowners inheriting the systems. Understand any limitations.
Involving Realtor to Facilitate Transfer
Your real estate sale agent can help broker the solar pact assumption between you and home buyers, including proper documentation.
Being Transparent About Terms with Buyers
Disclose all details of solar panel system costs, maintenance, warranties etc to potential purchasers so inherited obligations are clear upfront, minimizing later issues.
Lowering Home Price to Compensate New Owner
If buyers seem hesitant about acquiring an existing solar lease, deduct the net present value of remaining payments from the asking sales price to sweeten the deal.
Transferring a solar agreement with the sale of a home can allow avoiding contract termination completely in some cases – just requires finding willing takers.
What Happens if I Simply Stop Making Payments?
You always reserve the right to stop satisfying the financial duties stipulated in your solar contract, but doing so has consequences:
Breach of Legal Contract
By signed agreement with set payment terms, formally defaulting makes you vulnerable to legal recourse.
Collections and Legal Action
The solar financing company can send the delinquent account to collections, impact credit rating, put a lien on your home or even sue you in court to recover monies owed.
Penalties and Fee Accumulation
Expect late fees, interest charges and other penalties on the compounding outstanding amounts the longer you withhold owed payments.
Negative Impact on Credit Rating
Missed solar loan payments get reported to credit bureaus, hurting your ability to get financing, mortgages and reasonable loans rates in the future.
Simply defaulting on a signed solar contract hurts you more than the company in most cases – avoidance only delays the inevitable financial pain.
Could Cancellation Damage My Reputation with Solar Companies?
If you formally execute the cancellation clauses stipulated in your contract with evidence supporting your qualified reasons, being blacklisted across the wider industry is very unlikely. However, a few reputational considerations remain:
Industry Blacklisting Unlikely but Possible
Solar panels sales relies heavily on positive word-of-mouth and reputation, so while rare, some providers maintain “do not serve” lists of habitually problematic customers.
Makes Getting Future Solar Services Harder
With increasing consumer data transparency, your history of cancelled agreements could make other providers hesitant about signing future contracts.
Highlights Importance of Diligent Research Initially
The complications around terminating operational contracts underline the significance of thoroughly vetting solar companies, financing terms and agreements the first time around.
So while formal contractual cancellation as per stipulated policies may not raise red flags, the possibility of reputation impacts with solar providers still exists in corner cases.
What Other Options Exist Besides Contract Termination?
Terminating an operational contract should be last resort. You still have alternatives to cancelling that may enable preserving your existing solar panels system:
Attempting Sale to a Third Party
You may be able transfer the solar equipment and assign your lease to another customer, like selling a vehicle lease. This keeps it intact, just with someone else now legally taking over your duties.
Renegotiating Upgrade Offers
Certain changes in circumstances like expanding household electrical needs can justify discussing upgrades to the panels, inverters or battery storage you were contracted for in exchange for extending instead of terminating the agreement.
Adding Storage to Offset Performance Issues
If solar production shortfalls are the concern, have your provider quote you on adding battery backup to leverage solar energy more efficiently instead of outright contract cancellation.
Investigating these options first before pursuing formal cancellation can potentially prevent losing your existing solar investment while still addressing your underlying motivations for wanting to end the contract.
Concluding Takeaways on Cancelling Solar Contracts
While absolutely possible, terminating active residential solar system contracts involves appreciating several key considerations:
Avoid Need for Cancellation with Prudence Initially
Many complications stem from not thoroughly evaluating provider reputation, contract terms and realistic system sizing fittings before signing long-term agreements. Research properly upfront to minimize regret.
Act Quickly Within Cooling-Off Window, If Possible
Your best avoidance opportunity lies in those first 5-15 days after signing most solar agreements while limited-penalty cancellation policies apply – so move rapidly.
Consult lawyer to Understand Obligations
The legal nuances of solar contracts and qualified termination clauses can be confusing. Having professional advisory makes navigating this easier while protecting your rights.
Prepare for Financial Losses and Complications
Even in best cases, exiting a live solar agreement involves fees and credit score impacts – so brace yourself for some painful financial consequences.
Overall, cancelling an already-active solar panel system contract is indeed feasible but seldom straightforward, making due diligence and understanding exit considerations vital for all solar consumers.
