How to Read a Solar Loan Agreement Before Disputing It

How do you read a solar loan agreement?

A solar loan agreement usually arrives as a set: the loan agreement, a Truth in Lending disclosure, and a reference to a separate installation contract with the company that put the panels on your roof. Read it section by section before you dispute anything: the parties, the Truth in Lending box, the payment schedule, the security interest, the Holder notice, the arbitration clause, the default terms and the assignment clause. Each section answers a question your dispute depends on, such as who is responsible for the salesperson’s promises and where a disagreement will be heard.

Gather the proposal, the installation contract, the loan agreement, the disclosure and your statements first. Treasury tells buyers to “make sure you receive all documents (contracts, disclosures, etc.) in a form that you can keep,” so ask the lender in writing for anything missing. To measure the documents against what you were promised, use our guide to loan terms that differ from the pitch.

1. Who are the parties?

The CFPB says that with solar-specific loans, “salespersons, installers, and lenders may work in concert to consummate the sale of a solar system and financing.” The paperwork names each one.

• The seller is the installer or sales company. Its promises live in the installation contract and the proposal.
• The creditor is the lender making the loan. Regulation Z requires the disclosure to state “the identity of the creditor making the disclosures.”
• The servicer is the company that takes your payments. It may not own the loan.
• The holder is whoever owns the loan now.

These can be different companies. Sunlight Financial says certain of its loans are made “through Cross River Bank.” Dividend describes itself as “a Division of Fifth Third Bank.” Mosaic’s loan servicing moved in September 2025 to Solar Servicing LLC, “a wholly owned subsidiary of Forbright Bank.” A panel manufacturer’s warranty may add a fourth company.

2. What does the Truth in Lending box tell you?

The Truth in Lending disclosure is the set of figures a lender must give you before the loan is final, “grouped together” and “segregated from everything else.” Its five core terms:

• Annual percentage rate: “the cost of your credit as a yearly rate.”
• Finance charge: “the dollar amount the credit will cost you.”
• Amount financed: “the amount of credit provided to you or on your behalf.”
• Total of payments: “the amount you will have paid when you have made all scheduled payments.”
• Payment schedule: “the number, amounts, and timing of payments.”

Regulation Z says the disclosures “shall reflect the terms of the legal obligation between the parties,” so the box and the agreement should match. A separate written itemization of the amount financed, which the lender must give you unless it offers one and you decline, shows “any amounts paid to other persons by the creditor on the consumer’s behalf.” Because the CFPB found lenders “typically” leave dealer fees out of the cost of credit they present, check the amount financed against the installer’s cash price.

3. How do you read the payment schedule and the prepayment terms?

Look for more than one payment amount. The CFPB found it “commonplace” for solar-specific loans “to re-amortize at a higher monthly payment amount at the 19th month of the loan term” unless the borrower makes a large prepayment, often 30 percent of the principal; a 2024 CFPB consumer advisory puts the jump “after 18 months,” so look for a reset around the 18th or 19th month. In the agreement, look for words such as “re-amortize,” “voluntary prepayment” or a payment that changes after a set month. Regulation Z also requires a statement of whether a charge may be imposed for paying the loan early, and of any late payment charge.

4. What does the security interest cover: the panels or the house?

A security interest is the lender’s legal claim on property that secures the loan. If the loan is secured, the disclosure must state that the lender “has or will acquire a security interest in the property purchased,” and the agreement says what that property is. The CFPB says some solar loans are secured, “typically with a lien on the panels themselves,” while others are unsecured. The type of filing changes what it does:

• A fixture filing is a UCC financing statement covering goods that are or will become fixtures, filed in the same office as mortgages on your property. It covers the panels.
• A UCC-1 at the secretary of state covers personal property.
• A mortgage or deed of trust is a lien on the real property itself.
• A PACE assessment is a property tax lien repaid through your tax bill.

The CFPB, quoting the Center for Responsible Lending, said a UCC lien is “technically not on the property” yet “can muddy the title because some jurisdictions view the lien as applying to the whole property.” The wording of your agreement counts. In a 2023 New Mexico bankruptcy case, the loan agreement said the system was “not intended to be a fixture,” and the court held the panels were not fixtures, so the lender’s security interest did not reach the house. That ruling binds no other court.

Why this matters for a dispute: the Truth in Lending right to cancel a loan applies when the lender takes a security interest in your principal dwelling, and Regulation Z’s definition excludes “incidental interests” in “fixtures.” A loan secured only by the panels usually carries no such right. If the panels count as consumer goods, the UCC requires the lender to file a termination statement within one month after the loan is paid, or within 20 days of your signed demand if earlier.

5. Where is the Holder notice, and what does it do?

The Holder notice is a clause the FTC requires in seller-arranged and purchase-money consumer credit, “in at least ten point, bold face, type.” It states that any holder of the contract “IS SUBJECT TO ALL CLAIMS AND DEFENSES WHICH THE DEBTOR COULD ASSERT AGAINST THE SELLER,” and then caps recovery: “RECOVERY HEREUNDER BY THE DEBTOR SHALL NOT EXCEED AMOUNTS PAID BY THE DEBTOR HEREUNDER.” The FTC says “companies that purchase covered credit contracts are subject to the Holder Rule,” and that the cap does not stop state law from awarding attorneys’ fees against a holder.

Read it alongside the rest of the agreement: Minnesota’s attorney general alleges that one lender’s agreements included Holder language while also telling borrowers their “obligation to repay this loan is independent of system performance.” How two such clauses fit together is a question for an attorney in your state. No agency has applied the Holder Rule to solar leases or PPAs.

6. What does the arbitration clause do?

An arbitration clause sends disputes to a private arbitrator instead of a court, and it may bar class actions. The Federal Arbitration Act makes such clauses “valid, irrevocable, and enforceable” except on grounds that would undo any contract. The Supreme Court upheld class waivers in consumer arbitration in AT&T Mobility v. Concepcion (2011), and Congress voided the CFPB’s 2017 rule limiting them.

Look for an opt-out: some clauses let you reject arbitration by written notice within a set time after signing, and that window is set by the contract, not by law. Look for a small claims carve-out; the AAA’s consumer rules let either party take a claim within small claims limits to that court. Look for who pays: the AAA caps a consumer’s filing fee at $225, and JAMS’s minimum standards set the consumer’s fee at $250 when the consumer starts the case. Courts go both ways in solar cases. A California appeals court refused to enforce a one-sided arbitration clause in a Sunnova lease as unconscionable, while a Texas appeals court, finding conclusive evidence that a homeowner had signed electronically, ordered the trial court to compel arbitration of his claims against an installer and GoodLeap.

7. What do the default and acceleration terms say?

The Truth in Lending disclosure must tell you to refer to the contract “for information about nonpayment, default, the right to accelerate the maturity of the obligation, and prepayment rebates and penalties.” Acceleration is a lender’s right, if the contract grants it, to demand the whole remaining balance after a default. Read what counts as a default, any notice and cure period, and the late fee.

Then read the lender’s rights in the panels. The CFPB notes that with a secured loan “the lender has the right to repossess the panels in cases of nonpayment.” Under the UCC, a lender can take collateral without a court only “if it proceeds without breach of the peace,” and after a default it can remove fixtures if it has priority over all owners and encumbrancers of the real estate. The duty to pay for damage from removal runs to owners and mortgage holders “other than the debtor,” so don’t count on the UCC to repair your roof. None of this is a reason to stop paying; get advice before you change any payment.

8. What does the assignment clause mean for your dispute?

Assignment is the lender’s right to sell your loan, and solar loans do get sold. Solar Servicing tells some former Mosaic borrowers, “Your loan was previously sold by Mosaic to an investor.” Who holds your loan can decide what relief reaches you: Mosaic’s September 2026 consent judgment with Tennessee and Kentucky covered only debt “held and owned by Mosaic as of March 6, 2026,” and Mosaic admitted no liability. Under the Truth in Lending Act, claims against a buyer of the loan are limited to violations “apparent on the face of the disclosure statement,” while the Holder notice follows the contract to any holder. A lender’s bankruptcy doesn’t erase your loan either; the confirmation order in Mosaic’s Chapter 11 case preserved borrowers’ claims and defenses on loans covered by the Truth in Lending Act or the Holder Rule.

After you’ve read it: what to do, in order

1. Is a cancellation window open? Cancellation is never automatic; it turns on the contract type, the dates, your state and the facts. If you signed days ago, cancel in writing by the method your contract and state law require, and send the lender a copy the same day. Check the deadline tool, because state windows can run past three days.

2. Name the contract type and the companies. Write down whether you have a loan, lease, PPA or PACE financing, and the installer, lender, servicer and warranty provider.

3. Ask in writing, and complain for free. Send the creditor and servicer a written dispute that quotes the clauses you are relying on. The FTC’s advice for a system you bought: “If you have a problem with a system you bought, try to resolve it with the company first.” If that fails, the FTC points you to ReportFraud.ftc.gov and your state attorney general, and the CFPB’s complaint form takes solar loans.

Disclosure: Candid Yak works with Titan Advocacy Group, a solar consumer advocacy firm, and may be paid when readers hire it.

4. If they refuse, get a free case review. A refusal plus a documented gap between what you were promised and what you signed is the point to bring in an attorney-backed firm that offers a free case review. Choose one that reads your agreement before quoting a fee, flags any free route still open, names the attorney licensed in your state on your file, puts its fee and what happens to it after a refusal in writing before you pay, never tells you to stop paying, and promises no result and no tie to your lender or installer.

5. Other routes. Paying off or refinancing ends this loan on your terms; compare consolidation loans first, and after a payoff, ask the lender to terminate any UCC filing.

Disclosure: Candid Yak works with Titan Advocacy Group, a solar consumer advocacy firm, and may be paid when readers hire it. This page’s author, Kira Fairbank, is a manager at Vacation Ownership Consultants, a timeshare exit firm.

This is general information, not legal advice. What each clause means for you turns on the exact wording of your agreement, what was recorded against your property and your state’s law, so have an attorney licensed in your state read the documents before you send a notice, sign a release, or change any payment.