Can You Cancel a Solar Contract If the Installer Goes Out of Business?

Can you cancel a solar contract when the solar company goes out of business?

Cancellation isn’t automatic when a solar company goes out of business before the job is finished: the contract doesn’t end on its own, and a loan from a separate lender keeps running. Whether you can get out depends on your contract type, the dates, your state’s law and how much of the work was done. The routes that exist run through an open cancellation window, the contract’s own terms, a claim against the lender under the FTC Holder Rule (capped at what you’ve paid on the loan), a state regulator or recovery fund, and the bankruptcy court if the company filed.

This page covers unfinished jobs. If the system was finished and the installer vanished later, read what happens to your loan when the installer disappears. If the company filed for bankruptcy, our bankruptcy guide lists the court records and who services each company’s contracts now.

Which contract are you trying to cancel?

A stalled solar job can leave you holding more than one contract: the purchase or installation agreement with the installer, a loan agreement with a lender, or a lease or power purchase agreement (PPA) with whichever company owns the system. Each continues or ends on its own terms, and the installer, lender, loan servicer and warranty provider may be four different companies.

A job the company never finished is a performance failure under your contract. A sale built on promises the paperwork doesn’t support (start dates, equipment, savings, a tax credit) is a separate problem, misrepresentation. Either can support a claim, and each needs its own evidence.

Are you still inside a cancellation window?

The FTC Cooling-Off Rule is a federal rule that gives you until midnight of the third business day to cancel certain sales made at your home, and it generally covers a solar sale made there; the CFPB says door-to-door solar contracts “may be subject to” it. The rule defines a business day as “Any calendar day except Sunday or any federal holiday,” so Saturdays count. State windows vary and can run longer: Texas, for example, gives five business days for residential solar agreements signed on or after September 1, 2025, and the agreement must include a term requiring a referred or affiliated lender to cancel the accompanying loan when you cancel in that window. Check the state table and the deadline tool.

After a valid cancellation under the federal rule, the seller has 10 business days to refund your payments and “terminate promptly any security interest created in the transaction,” and it may not assign your note to a finance company before midnight of the fifth business day. A company that has shut down may not be able to pay that refund, so send your notice to the address in the contract by the method it names, and send a copy to the lender the same day.

What can you do after the window has closed?

Look in the contract for a start or completion date, what counts as the installer’s default, any clause that lets you terminate, and what happens to deposits. The California Public Utilities Commission’s solar consumer guide tells buyers to ask, before they sign, “When do you propose to start and finish installing solar on my roof?” and “What situations would allow me to be released from a contract?” Look for the answers to both in your contract.

Send the installer a written notice even if its office is dark: describe the unfinished work, cite the contract terms, set a reasonable date to respond, and keep proof of delivery. California’s Contractors State License Board says it “will ask if you have formally notified your contractor of your concerns with the project.”

Some states add their own tools:

• Texas. For residential solar agreements covered by Occupations Code chapter 1806, the licensing commission or its executive director may, after notice, a hearing and a finding that the law was violated, order the agreement cancelled and a refund that “may not exceed the amounts paid under the agreement” (1806.207). TDLR says added requirements became enforceable September 1, 2026.
• Arizona. The Residential Contractors’ Recovery Fund covers work by licensed residential contractors. If you paid a deposit and no work was done or materials delivered, your damages are the deposit plus 10 percent interest a year, up to $30,000, and no single award can exceed $30,000. Otherwise damages are “the reasonable cost of completing the contract and repairing the contractor’s defective performance, minus the part of the contract price still unpaid.” For an administrative claim you must first claim against the contractor’s license bond, and the license must have been suspended or revoked as a result of your complaint.
• Nevada. The Residential Recovery Fund can pay up to $40,000 per claim to owner-occupants of single-family homes harmed by a licensed contractor’s failure to perform, after other means of recovery are exhausted.

Can you hold the lender to the installer’s failure to finish?

Sometimes, if the installer arranged the loan. For a loan from a separate lender, the FTC Holder Rule reaches a “purchase money loan,” which 16 CFR 433.1(d) defines as credit used to buy from a seller who “refers consumers to the creditor” or is affiliated with it “by common control, contract, or business arrangement.” The seller may not accept that loan money unless the loan contract carries a notice that 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.” Find that bold notice in your loan agreement. If it’s there, your claim that the installer took the money and didn’t finish can be raised against whoever holds the loan, and any money you recover under the notice is capped at what you’ve paid on the loan. No agency has applied the rule to leases or PPAs.

Timing of the lender’s money matters. Announcing its July 2026 suit over Climax Solar, Michigan’s attorney general alleged that financing companies “released substantial funds based on paperwork and interim project milestones” before systems were completed, connected or approved by the utility; those are allegations, and motions to dismiss are pending. Ask your lender in writing what it paid the installer, when, and on what document.

What if the installer filed for bankruptcy?

Filing triggers the automatic stay, which under 11 U.S.C. 362 stops “the commencement or continuation” of lawsuits against the company that filed. You generally can’t sue that installer without the bankruptcy court’s permission; your claim against it goes through a proof of claim, and in the major solar cases those deadlines have passed. The stay covers only the company that filed, so it doesn’t pause your loan.

Who finishes the work depends on the case:

• Freedom Forever. The court’s August 7, 2026 order converting the case to Chapter 7 authorized financing partners, including Sunrun, EverBright, Project Solar, EnFin, GoodLeap, Credit Human and Participate, to use “step-in rights to complete open solar installation projects for homeowners.” GoodLeap was “authorized, but not directed” to take possession of projects and equipment and complete them, so a partner may choose not to.
• Sunnova. Sunnova’s customer page says SunStrong is working with GoodLeap “to facilitate completion of certain in-progress installations,” and that your dealer or GoodLeap will contact you if your project qualifies. The contact is [email protected].
• PosiGen. Kroll’s case page routes work-in-process systems to GoodLeap at [email protected].
• Lumio. Buyer Zeo Energy assumed liabilities for listed installs worked on from Lumio’s September 3, 2024 filing date onward, and its chief executive said Zeo looked forward “to completing solar installations under agreements entered into by Lumio.”
• Pink Energy. The Chapter 7 trustee says the estate “will be unable to complete or repair any customer’s solar panel systems.”

If a financing partner or a new contractor offers to finish or remove equipment, get the plan, the company’s name and its license number in writing before work starts.

How do you document the state of the job?

Build the record now, while the site still looks the way the installer left it:

• dated photos and video of the roof, the panels, racking, wiring, inverter and any equipment left on site, with the labels and serial numbers;
• permit and inspection records from your city or county, and the utility’s record of any interconnection application. California’s guide lists the steps in order and tells owners to “turn on system only after receiving written approval from electricity provider”;
• every payment: deposit receipts, loan statements and what the lender says it paid the installer;
• your contract, the sales proposal, ads, texts and emails, plus a log of every call and visit with dates.

Our document checklist covers the rest, and never-activated systems covers jobs stuck before permission to operate.

What to do, in order

This follows the order in our guide to getting out of a solar contract.

1. Inside a cancellation window? Cancel in writing now, by the method your contract and the law require, and send a copy to the lender the same day.

2. Identify your contract and every company. Work out from the paperwork which contracts you signed (cash, loan, lease, PPA or PACE) and who stands behind each: the installer, the lender, the servicer and the warranty provider can all be different.

3. Ask in writing, and complain for free. Send the installer and the lender a written demand saying what you want (completion by a date, a refund or a loan credit) and get the answers 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.” If you’re not satisfied, it says to report it at ReportFraud.ftc.gov and to your state attorney general. The CFPB takes loan complaints and asks first, “Have you tried reaching out to the company?” For a lease or PPA, Treasury, the CFPB and the FTC encourage people who believe they were treated unfairly or deceptively “to file a complaint with CFPB, FTC, or their relevant state consumer protection office.” File with your state contractor licensing board too.

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 firm worth hiring:

• looks at your contract, loan papers and photos of the job before it quotes anything, and tells you if a free route is still open;
• names the attorney who will handle your file, licensed in your state, so you can check the state bar;
• gives you its fee in writing before you pay, including what happens to the fee if the lender says no;
• never suggests you quit paying the loan, lease or PPA while the dispute runs;
• makes no promise about the outcome and claims no link to your installer or lender.

See our guides to solar cancellation companies and hiring a solar attorney.

5. Other routes. A financing partner or a new licensed contractor may finish the work; a state recovery fund may cover part of the loss; and once the system works, you can weigh a payoff or refinance through a consolidation loan. For a lease or PPA, ask the system owner about a buyout.

Keep paying the loan while you work through this. Missed payments can put it in default and on your credit report, and on a secured solar loan the CFPB notes “the lender has the right to repossess the panels in cases of nonpayment.” Get professional advice before you change any payment.

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 you can cancel turns on your contract’s terms, the dates, your state’s law and any bankruptcy orders in the installer’s case, so put your documents in front of an attorney licensed in your state before you send a notice, sign a release, or change any payment.