Do You Still Have to Pay Your Solar Loan If the Installer Disappears?

Do you still owe the loan if your solar installer is out of business?

In most cases you do, because your loan is a contract with a lender, a separate company from the installer, and the solar installer going out of business or going silent doesn’t end that loan. What can change is what the lender may collect: if your loan contract carries the FTC Holder Rule notice, you can raise the installer’s failures against whoever holds the loan, with any recovery capped at what you’ve paid. A written dispute with the lender and free complaints to regulators put that claim on the record.

Treasury’s solar advisory warns that a large upfront deposit can signal a contractor that “takes your deposit and then shuts down before finishing the job,” leaving the homeowner with “expensive payments and products that don’t work.”

This page is for an installer that stopped answering with no bankruptcy case behind it. Search the company’s name in the PACER Case Locator, the federal courts’ nationwide index of cases, before you go further. If you find a case, read what happens to your solar loan when the company goes bankrupt, which covers court records, claims agents and deadlines. If the job was left unfinished, our guide to cancelling when the installer goes out of business covers cancellation windows and who might finish the work. Look up the company’s license with your state contractor licensing board too; the FTC tells solar shoppers to check a company’s history there.

Why does the loan outlive the installer?

The sale probably felt like one transaction with one company. The CFPB describes solar sales in which “salespersons, installers, and lenders may work in concert,” with loan offers made alongside the installation contract on a tablet, yet the paperwork still makes the lender a separate party with its own contract. Your installer, lender, loan servicer and warranty provider may be four different companies, and only one of them disappeared.

Lenders also write that separation into the loan. The CFPB’s 2024 solar financing report says “Some solar loan agreements note that the consumer’s financial obligation does not depend on the system’s performance.” Minnesota’s attorney general alleges in its 2024 suit against four solar lenders that Sunlight’s loan agreements say a borrower’s “obligation to repay this loan is independent of system performance,” and that Mosaic’s loan documents tell borrowers to resolve installer complaints directly with the installer. The state alleges those statements “undermine the message and policy of the Holder Rule.” The case was filed March 8, 2024 in Hennepin County District Court (No. 27-CV-24-3558), returned to state court on January 16, 2025, and is pending; the court has not decided these allegations.

How does the Holder Rule move the installer’s failures to the lender?

The FTC Holder Rule (16 CFR 433) is a federal rule that makes whoever holds a seller-arranged consumer loan subject to the buyer’s claims and defenses against the seller, with the buyer’s recovery capped at what the buyer has paid on the loan. It works through a notice the seller must put in the loan contract, in at least 10-point bold type, saying any holder “IS SUBJECT TO ALL CLAIMS AND DEFENSES WHICH THE DEBTOR COULD ASSERT AGAINST THE SELLER” and that “RECOVERY HEREUNDER BY THE DEBTOR SHALL NOT EXCEED AMOUNTS PAID BY THE DEBTOR HEREUNDER.”

The FTC has addressed the vanished-seller case directly. A 2024 FTC business blog post asks what happens when a seller “disappears before the job is done” and answers that the consumer can make the same claims or defenses against the company that took over the contract. Announcing a 2022 advisory opinion, the FTC described the claims that carry over as seller misconduct “such as a seller’s misrepresentation or breach of contract,” and said the rule doesn’t stop state law from awarding costs or attorneys’ fees against loan holders.

Three limits matter. The rule reaches loans the seller arranged, such as a lender the installer referred you to. The cap means money you recover under the notice can’t exceed what you’ve paid on the loan. And no agency has applied the rule to solar leases or PPAs. Your loan may also require arbitration; see our page on arbitration clauses, and how to read a solar loan agreement to find the notice.

How do you dispute the loan with the lender?

Write to the lender at the complaint or notice address in your loan agreement or on its website, and keep proof of delivery. Include:

• your name, the account number and the property address;
• what the installation contract promised and what is missing or broken, with dates;
• what you did to reach the installer, such as returned mail, a disconnected number or a dead website, with dated screenshots;
• the Holder Rule notice from your loan contract, quoted, if it’s there;
• what you are asking for, such as credit for amounts paid, a fix paid for by the holder, or a release from the remaining balance, and a date to respond.

If the lender replies that you should take it up with the installer, answer in writing that the installer is gone and point back to the notice. If you also dispute the accuracy of what the lender reports to the credit bureaus, federal law says a company that receives your dispute may not keep reporting the information “without notice that such information is disputed by the consumer,” and a credit bureau generally has 30 days to reinvestigate a dispute you file with it.

What should you document?

Sort the problem first, because each kind is proved differently. A system that was never finished is a performance failure. One that was finished but never switched on may have stalled before the utility’s permission to operate; California’s guide tells owners to “turn on system only after receiving written approval from electricity provider.” One that ran and then failed is often a warranty question. A sale built on promises the paperwork doesn’t back up is a misrepresentation question. A system can have more than one of these problems, and none of them is automatically fraud.

Keep the installation contract, the loan agreement and its disclosures, the sales proposal, ads, texts and emails, utility bills and monitoring data, permit and inspection records from your city or county, dated photos, your payment history, and a log of every attempt to reach the installer. Our document checklist goes further, and systems never activated and panels that stopped working cover the technical side.

Where can you complain for free?

• The CFPB, about the loan. Its complaint form covers “Personal loans like installment, advance, and title loans,” and it says “Most companies respond within 15 days.”
• Your state attorney general, about the installer and the lender.
• Your state contractor licensing board, about the installer. Set expectations: California’s board says “The purpose of a CSLB investigation is not to obtain restitution.” Some states also run recovery funds for work by licensed contractors, covered on our unfinished-job page.
• The FTC, at ReportFraud.ftc.gov.

A 2024 CFPB consumer advisory says: “You can submit a complaint to multiple places, and you can also consult an attorney at the same time.” Our complaint guide covers what to include.

What happens if you stop paying?

Get professional advice before you hold back a single payment. The Holder Rule preserves your defenses against the holder, but whether a defense lets you pay less turns on your facts and your state’s law, and until someone decides that, the lender can treat a missed payment as a default under the loan agreement. Missed payments can reach your credit report and go to collections. The CFPB notes that some solar loans are secured, “typically with a lien on the panels themselves,” and that a secured lender can repossess the panels for nonpayment.

Collection rules depend on who is collecting. The CFPB says the federal debt collection law “doesn’t generally cover collection by the original creditor”; the debt collectors it covers can include collection agencies, debt buyers and lawyers. If a third-party collector contacts you, a written dispute within the 30-day validation period requires it to stop collecting the disputed amount until it sends verification. Our pages on solar loan collections and what happens if you stop paying explain the rest.

What to do, in order

These steps track the order in our guide to getting out of a solar contract.

1. Inside a cancellation window? If the contract is recent, cancel in writing now, using the method your contract and the law require, and copy the lender the same day. Use the deadline tool.

2. Identify your contract and every company. Confirm from your papers whether you have a cash deal, a loan, a lease, a PPA or PACE financing, then list the installer, the lender, the servicer and any warranty provider by name. Your loan statement names the servicer.

3. Ask in writing, and complain for free. Send the dispute letter above and get the lender’s answer in writing. For a system you bought, the FTC says: “If you have a problem with a system you bought, try to resolve it with the company first.” The FTC’s next step, if that doesn’t resolve it, is a report at ReportFraud.ftc.gov and to your state attorney general; with the installer gone, you start there. The CFPB’s complaint page asks, “Have you tried reaching out to the company?” 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.” Add your state contractor licensing board.

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, and your documents show a gap between what you were promised and what you signed, get a case review from an attorney-backed firm that offers a free case review. A Holder Rule claim against a lender is legal work. A firm worth hiring:

• studies your loan contract, the Holder notice and your evidence before it quotes, and tells you if a free route is still open;
• names your attorney, licensed in your state and listed with the state bar;
• writes down its fee, and what becomes of the fee if the lender refuses, before you pay anything;
• won’t advise you to skip or stop payments on your loan, lease or PPA;
• won’t promise an outcome or claim any tie to your installer or lender.

Read more on solar cancellation companies and hiring a solar attorney.

5. Other routes. If you decide to keep the system, a payoff or refinance through a consolidation loan can replace the solar loan. If you sell the house, the CFPB says the seller typically pays off the solar loan before the sale or the buyer assumes it where the lender allows; see selling a house with a solar loan.

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 the installer’s failures reduce what you owe turns on your loan contract, whether it carries the Holder Rule notice, and your state’s law, so put the documents in front of an attorney licensed in your state before you send a notice, sign a release, or change any payment.