Solar Loan Dealer Fees: Hidden Costs Homeowners Should Understand

What is a solar loan dealer fee?

Solar loan dealer fees are charges a lender adds to your loan principal above the cash price of the system, and the lender keeps them. The CFPB’s 2024 solar report says these fees “typically range from between 10 to 30 percent of the cash price but can exceed 50 percent,” and that lenders typically leave them out of the total cost of credit they present to borrowers. You can estimate yours by comparing the installer’s cash price with the “Amount Financed” in your loan’s Truth in Lending disclosure.

A dealer fee is a lender’s charge folded into the loan balance rather than shown as a cost of borrowing. The industry uses several names for it; the CFPB, quoting Minnesota’s complaint, lists “‘program fees,’ ‘lending fees,’ ‘finance fees,’ ‘platform fees,’ ‘original issue discounts,’ and ‘dealer fees.’” The last name misleads: one consumer’s complaint to the CFPB said the charge was called a dealer fee but was “a fee that the [LENDER NAME] retains.”

The CFPB’s worked example shows where the money goes. A system costs $30,000 in cash. The loan documents show $39,000. “The lender would remit the $30,000 cash price to the installer and keep the $9,000 hidden fee.” Minnesota’s attorney general calls them fees “the lenders pocketed.”

What did the CFPB find?

The CFPB’s August 2024 Solar Financing Issue Spotlight found, by printed page:

• Some lenders’ markups and fees “can increase the loan principal by 30 percent or more above the cash price” (p. 2).
• Hidden fees “typically range from between 10 to 30 percent of the cash price but can exceed 50 percent” (p. 13).
• “Typically, lenders do not include the hidden fees in the total costs of credit that they present to consumers” (p. 13).
• Stated APRs on solar-specific loans “typically range from 1 to 7 percent,” but “often do not include fees that increase the loan principal” (p. 9).

The CFPB’s companion press release said lenders “frequently bake these fees into a loan’s principal without including them in the stated annual percentage rate (APR).” A 2024 CFPB consumer advisory added that the fees “make the interest rate on the loan look artificially low.” These are research findings; we found no CFPB enforcement action against a solar lender.

Why doesn’t the fee show up in your APR?

Your loan’s Truth in Lending disclosure uses three defined terms that decide where a fee lands. Under Regulation Z, the amount financed is “the amount of credit provided to you or on your behalf,” the finance charge is “the dollar amount the credit will cost you,” and the annual percentage rate is “the cost of your credit as a yearly rate.” When a lender treats its fee as part of the system’s price, the fee sits inside the amount financed and stays out of the finance charge and the APR.

Whether that treatment is correct is a legal question at the center of these cases. Regulation Z counts as a finance charge any charge “imposed directly or indirectly by the creditor as an incident to or a condition of the extension of credit,” but not a charge “of a type payable in a comparable cash transaction.” It lists “discounts for the purpose of inducing payment by a means other than the use of credit” as a finance charge. It also excludes “seller’s points,” which the official commentary describes as charges a lender imposes on the seller, excluded “even if they are passed on to the buyer.” The state cases below allege the solar fees were finance charges that should have been disclosed. No final ruling has settled that in either case.

Here is the CFPB’s example run at a rate and term we chose, 2.99 percent over 25 years, inside the 1 to 7 percent APR range and the 8 to 25 year terms the CFPB reported. The CFPB’s example gives no rate or term, so the arithmetic is ours.

	Loan with no fee	Loan with the $9,000 fee
Cash price of the system	$30,000	$30,000
Fee added to the principal	$0	$9,000
Amount borrowed	$30,000	$39,000
Monthly payment	$142	$185
Total of payments over 25 years	$42,632	$55,422

With interest, the fee costs $12,790 over the loan’s life. Measured against the $30,000 the installer actually received, the second loan’s payments work out to a yearly cost of about 5.5 percent, while the paperwork shows 2.99 percent. That 5.5 percent figure is our calculation, not a disclosed APR.

Where do the Minnesota and Michigan cases stand?

Minnesota. The attorney general sued GoodLeap, Sunlight Financial, Solar Mosaic and Dividend Solar Finance (now Fifth Third Bank, doing business as Dividend Finance) on March 8, 2024, in Hennepin County District Court, No. 27-CV-24-3558. The state alleges the lenders collected about $35 million in hidden fees, inflating the cost of more than 5,000 solar-panel systems, that most fees raised borrowers’ costs by 15 to 30 percent, and that “most borrowers never learn they are paying up to 54% more.” It also alleges the fees were left out of sales proposals and loan disclosures. After a stint in federal court, it was sent back to Hennepin County on January 16, 2025. As of October 20, 2026 it is pending, with no settlement or trial date found. These are allegations.

Michigan. The attorney general sued Orbit Marketing, doing business as Climax Solar, its owner and the companies that financed its sales on July 15, 2026, in the U.S. District Court for the Western District of Michigan, No. 1:26-cv-02084. The state alleges 1,689 loans totaling about $81.26 million financed, including about $22.14 million in hidden finance charges, averaging 27.24 percent of the amount financed. Its complaint alleges the fee “was not separately itemized in the solar proposal” or the installation contract and “was not included in the annual percentage rate.” Motions to dismiss filed on October 16, 2026 are pending. These are allegations.

Similar claims are pending elsewhere. New York City’s consumer agency alleges that about $3 million of $18 million in loans one installer promoted was “hidden undisclosed ‘dealer fees,’” and New York’s attorney general alleges that two lenders hid fees in the price of solar systems, overstating the amounts financed.

How do you find the dealer fee in your own loan?

1. Get the cash price. It may appear in the installation contract as the system price. If the contract shows only one number, ask the installer in writing what it charges a customer who pays cash for the same system. Michigan’s complaint alleges Climax charged financed buyers a higher price without telling them a lower cash price existed.
2. Find the Amount Financed. It is in the Truth in Lending disclosure, a boxed set of figures in your loan papers.
3. Read the itemization. Regulation Z requires the lender to give you a written itemization of the amount financed, including “any amounts paid to other persons by the creditor on the consumer’s behalf,” or a statement that you have the right to one. The Truth in Lending Act says you can get it “upon a written request.” Don’t assume it tells the whole story: Minnesota alleges one lender’s itemization showed the entire amount going to the installer while the lender kept its fee.
4. Subtract, then divide. The amount financed minus the cash price is your likely fee. Divide it by the cash price for the percentage.
5. Read the small print. Minnesota alleges one lender’s disclosure said, in small type, “The Installation Contractor may provide us a fee or discount against the Amount Financed noted herein.” Language like that is worth flagging.

Treasury’s buyer checklist asks, “Is there a lender fee included in your loan? How much is it, and what is it for?” Put the same question to your lender in writing.

What does a dealer fee mean for a dispute?

A fee on its own is not a claim. How it was presented can make it one: a cash price you never saw, an APR sold as the full cost of credit, or a salesperson who said there were no fees. Which legal route fits depends on your loan and your state.

• State consumer protection law. Minnesota’s claims rest on state fraud, deceptive trade practices and lending laws; Michigan’s include the federal Consumer Financial Protection Act and Michigan’s consumer protection and home solicitation laws.
• The Truth in Lending Act. If a fee should have been disclosed as a finance charge, the finance charge and APR were understated. A borrower can sue for actual damages, statutory damages and “a reasonable attorney’s fee,” generally “within one year from the date of the occurrence of the violation,” though a violation can be raised later as a defense if the lender sues you to collect, except as state law provides.
• The FTC Holder Rule. If your loan carries the Holder notice, claims you have against the installer can be raised against whoever holds the loan. The notice caps that recovery: “RECOVERY HEREUNDER BY THE DEBTOR SHALL NOT EXCEED AMOUNTS PAID BY THE DEBTOR HEREUNDER.” The FTC said in 2022 that the cap does not stop state law from awarding attorneys’ fees against a holder.

What to do about a dealer fee, in order

1. If you just signed, check your cancellation window first. Cancel in writing by the method your contract and state law require, and copy the lender the same day. For sales covered by the FTC’s Cooling-Off Rule, the seller may not assign your loan paper to a finance company before midnight of the fifth business day, and after a valid cancellation it must act to “terminate promptly any security interest created in the transaction.” See the cancellation deadline tool.

2. Name every company. The creditor named in your Truth in Lending disclosure may differ from the company that collects your payments, and both differ from the installer. Write each one down.

3. Ask in writing, then complain for free. Send the lender your two numbers, the percentage, and the question Treasury suggests. The CFPB’s complaint page asks first, “Have you tried reaching out to the company?” If the answer doesn’t resolve it, file with the CFPB, your state attorney general and the FTC. Treasury, the CFPB and the FTC “encourage consumers that believe they have been a victim of unfair or deceptive practices to file a complaint with CFPB, FTC, or their relevant state consumer protection office.”

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

4. If the lender refuses, get a free case review. A refusal plus a documented gap between the price you were shown and the loan you signed is when a free case review from an attorney-backed firm earns its place. Look for a firm that reviews your loan papers before quoting a fee, tells you if a free step is still open, names the attorney licensed in your state who will work your file, puts its fee and what happens to it if the lender says no in writing before you pay, never tells you to stop paying, and never promises a result or claims ties to your lender or installer.

5. Other routes. Paying the loan off ends future interest, including interest on the fee, and refinancing can lower the rate on the balance from here on, though the fee itself stays in what you owe. Compare consolidation loans and see our payoff and refinance math. Keep making payments while you dispute.

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. Whether a dealer fee was lawfully disclosed turns on your loan documents, the lender’s charter and your state’s law, and the cases described here are pending allegations, so put your installation contract and loan papers in front of an attorney licensed in your state before you send a notice, sign a release, or change any payment.