Solar Loan Payoff and Refinance: How to Get Out From Under the Dealer Fee

Can a solar loan refinance get you out from under the dealer fee?

A solar loan refinance replaces your loan with a new one. It can change the rate, the term and a scheduled payment increase you can’t fund, while the dealer fee already built into your balance comes along with it, because the new loan pays off the whole balance. Before you refinance, find the fee, get a written payoff statement, check for a prepayment charge, and make sure the old lender files a termination statement for its UCC filing once the loan is paid.

If the loan never matched what you were promised, raise that in writing first, while the original lender still holds it; the order is at the end of this page.

What kind of loan do you have now?

The CFPB describes solar-specific loans as “fixed-term, usually fixed-rate installment loans,” with terms that “typically range from 8 to 25 years” and stated APRs that “typically range from 1 to 7 percent.” It also found that “those APRs often do not include fees that increase the loan principal on top of the cash price of the solar panels.” Your loan agreement and its Truth in Lending disclosure show the lender, the balance and the terms.

Can a refinance get rid of the dealer fee?

A refinance carries the fee forward. Hidden fees, according to the CFPB’s 2024 solar report, “typically range from between 10 to 30 percent of the cash price but can exceed 50 percent.” In its worked example, a $30,000 system carries a $39,000 loan principal, and the lender pays the installer $30,000 and keeps the $9,000 fee. When a new loan pays off that principal, the fee is in the payoff amount. What a refinance changes is the cost of carrying the balance.

Whether the fee should have been charged the way it was is a separate question, and at least two states have sued over it. Minnesota sued GoodLeap, Sunlight Financial, Solar Mosaic and Dividend Solar Finance on March 8, 2024, alleging $35 million in hidden fees on more than 5,000 loans; the case returned to Hennepin County District Court on January 16, 2025 and is pending. Michigan sued Climax Solar and its lenders on July 15, 2026, alleging hidden financing costs that averaged more than 27 percent of the amount financed; motions to dismiss are pending. Both are allegations, not findings. See solar loan dealer fees to find the fee in your papers.

What does the reset around month 18 or 19 do to the numbers?

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 if the consumer does not make a substantial prepayment before then,” frequently 30 percent of the principal, sized to the federal tax credit.

Here is that structure on an illustrative loan: a $25,000 cash price (the average project cost in industry figures cited by the CFPB), a dealer fee of 30 percent of the cash price (the top of the CFPB’s typical range), and a 2.99 percent stated APR over 25 years (inside the range of stated APRs the CFPB reports), with the first payment set to stay level if you make the 30 percent prepayment by month 18. The arithmetic is ours.

Cash price of the system	$25,000
Dealer fee added to principal (30 percent of cash price)	$7,500
Loan principal	$32,500
Expected prepayment by month 18 (30 percent of principal)	$9,750
Monthly payment, months 1 to 18	about $110
Balance owed at month 18, before any prepayment	about $31,970
Payment from month 19 if you make the prepayment	about $110
Payment from month 19 if you don’t	about $158
Total paid over 25 years with the prepayment	about $42,700
Total paid over 25 years without it	about $46,500

Without the prepayment, the payment rises by more than 40 percent for the remaining 282 months. For a 2026 installation there is no federal credit to fund it: the IRS says the residential clean energy credit is “not available for any property placed in service after December 31, 2025.” GoodLeap’s FAQ notes that “Even without the federal tax credit, you can still make additional payments during the first 18 months.”

The number to beat. At month 19 with no prepayment, the remaining 282 payments of about $158 add up to about $44,500. A new loan for the roughly $31,970 balance saves money only if its total of payments, plus fees, comes in under that. A closed-end loan’s Truth in Lending disclosure shows the “total of payments,” so compare that line rather than the monthly payment alone; a shorter term can raise the payment and still cost less in total.

How do you get a payoff statement?

Ask the servicer in writing for a payoff statement good through a specific date, showing principal, interest, any fees and where to send the money. GoodLeap’s FAQ says its borrowers can tap “Payoff Quote” in its app to generate one.

Check for a prepayment charge first. For a loan that charges interest on the unpaid balance, Regulation Z requires the Truth in Lending disclosure to state “whether or not a charge may be imposed for paying all or part of a loan’s principal balance before the date on which the principal is due.” Some lenders say so publicly; Dividend’s homeowner page lists “No pre-payment penalties.”

What happens to the UCC filing after payoff?

A fixture filing is a UCC financing statement recorded in the county real property records, where mortgages are recorded, covering goods attached to the property. A UCC-1 filed with the secretary of state covers personal property. Your lender may have filed one or both.

Goods bought “primarily for personal, family, or household purposes” are consumer goods under the UCC. For a filing that covers consumer goods, once nothing is owed the secured party must file a termination statement “within one month after there is no obligation secured by the collateral,” or within 20 days after it receives your signed, written demand, whichever comes first. Send the demand with your payoff confirmation and keep a copy. Once the termination statement is filed, the financing statement “ceases to be effective,” so search the county and state records afterward to confirm it. A UCC-5 information statement is no substitute: the UCC says it “does not affect the effectiveness of an initial financing statement or other filed record.” See solar panel liens and UCC filings.

Which payoff route fits you?

Pay down before the reset

Cost: the lump sum, about $9,750 in the example, for a lower total.

Who it works for: borrowers short of month 18 with cash they don’t need for anything else.

What disqualifies you: being past the reset already, or needing that cash for emergencies.

Refinance with an unsecured personal loan

Cost: the new lender’s rate and fees, shown as the APR, finance charge and total of payments in its Truth in Lending disclosure.

Who it works for: borrowers whose credit and income qualify for a loan that beats the number above, and who want to keep the house out of it.

What disqualifies you: recent missed payments, or a debt load the new lender won’t take on.

Refinance with a home equity loan or line of credit

Cost: the rate and closing costs, and your house as the collateral. The FTC says that with a home equity loan, “If you don’t repay the loan as agreed, your lender can foreclose on your home.”

A loan secured by your principal dwelling carries a Truth in Lending right to rescind until midnight of the third business day after closing, delivery of the rescission notice or delivery of the key disclosures, whichever is last, and up to three years if the notice or those disclosures never arrived. Saturdays count as business days for rescission.

Who it works for: owners with enough equity who accept moving the debt from the panels to the house.

What disqualifies you: thin equity. The FTC notes that many lenders prefer you borrow no more than 80 percent of your equity.

Fold it into a mortgage refinance

Cost: mortgage closing costs, and the solar balance spread over the mortgage term.

Who it works for: owners refinancing the mortgage anyway. Fannie Mae counts separately financed panels in the debt-to-income ratio and says “If a UCC fixture filing is in the land records as a priority senior to the mortgage loan, it must be subordinated.”

What disqualifies you: a first-lien PACE assessment, if the new mortgage would be a Fannie Mae or Freddie Mac loan. The FHFA says “a homeowner with a first-lien PACE loan cannot refinance their existing mortgage with a Fannie Mae or Freddie Mac mortgage.” See when a solar loan blocks a refinance and compare refinance lenders.

Should you refinance a solar loan you are disputing?

Refinancing comes after the free steps. If the loan or the sale behind it went wrong, use this order; our guide to getting out of a solar contract covers each step.

1. Cancellation window. If you signed recently, cancel in writing by the method your contract and the law require, with a copy to the lender the same day. Windows vary by state and can be longer than three days; see the state table and the deadline tool. Cancellation is never automatic.

2. Identify every company. The installer, lender, servicer and warranty provider may be four different companies.

3. Ask in writing, and complain for free. The FTC’s advice: “If you have a problem with a system you bought, try to resolve it with the company first,” then report it at ReportFraud.ftc.gov and to your state attorney general. The CFPB’s complaint page asks, “Have you tried reaching out to the company?” and takes solar loan complaints. Add your state contractor licensing board, and keep the ads, texts, proposals and financing disclosures from the sale.

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 free case review from an attorney-backed firm before you pay the loan off. Look for the FTC Holder Rule notice in your loan contract: any holder “IS SUBJECT TO ALL CLAIMS AND DEFENSES WHICH THE DEBTOR COULD ASSERT AGAINST THE SELLER,” and “RECOVERY HEREUNDER BY THE DEBTOR SHALL NOT EXCEED AMOUNTS PAID BY THE DEBTOR HEREUNDER.” Mosaic’s Chapter 11 confirmation order preserved borrowers’ Truth in Lending Act and Holder Rule claims. Ask the attorney whether a payoff affects a claim you want to keep. A firm worth hiring reviews your documents before it quotes anything and tells you when a free route still works, names the attorney licensed in your state who will handle the file, and puts its fee and what happens to it if the lender refuses in writing before you pay. It never tells you to stop paying, never guarantees a result and never claims a connection to your installer or lender. See how solar cancellation companies work.

5. Other routes. Payoff or refinance as above, or a sale of the house that pays the loan off at closing.

Once disputes are settled and the panels are yours, what remains is ordinary consumer debt. Compare consolidation loans, get more than one quote, and judge each on its total of payments against the number to beat.

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 your dealer fee was properly disclosed, what your loan allows on early payoff and whether a payoff affects a claim all turn on your documents and your state’s law. Put the installation contract and the loan agreement in front of an attorney licensed in your state before you pay off a disputed loan, sign a release or move the debt onto your house.