Breaking Free: How to Cancel a Solar Lease Contract
Feeling trapped in a solar lease contract and unsure how to escape? Canceling a solar panel agreement might seem overwhelming, but understanding the right steps can make it much more manageable. 2 Whether you’re moving to a new home or disappointed with your current savings and service, there are ways to free yourself from an unsatisfactory solar lease. 1
I’m Danny Dearing, and I’m passionate about transforming homes into functional living spaces. With my experience, I’ll walk you through practical steps for canceling your solar lease.
Let’s start this journey together! 3
Key Takeaways
- Check your solar lease contract for cancellation terms. Some have a 3-day period to cancel without penalties.
- Rising costs or moving may be reasons to end the lease. Consider buying out the remaining payments if you cannot transfer it.
- Solar companies might let you back out within 3 business days of signing. Ask your provider about this option.
- Buying out the lease can increase home value by around $10,000 but check for hidden fees and complete a cost-benefit analysis first.
- Conduct a careful review of your contract before making any decisions. Look for any loopholes or hidden fees that could affect you.
Reasons for Canceling a Solar Lease
Maybe your solar lease costs too much, or you’re not happy with the service. Moving to a new house is also a common reason.
Rising annual costs
Solar leases often have an annual escalator clause. This means your payments can go up by 3% to 5% each year. Though the increase seems small, over 15-20 years, it adds up. 1
These rising costs might end up higher than your electricity savings. If the lease rates rise faster than utility prices, you could pay more for solar power. Realizing this can make many homeowners unhappy with their solar panel contract. 2Moving houses
I once needed to cancel my solar lease because I was moving. Homes with solar panels do sell 20% faster and for 17% more, but transferring the lease can be tricky. 1 If you can’t transfer the lease to a new homeowner, consider buying out the remaining payments. 3 Some companies also offer relocation services for your solar panel system.
Buying out a solar contract might become available after 5-7 years. 1 So check your contract details carefully before making any decisions. Moving houses is tough enough without extra costs or headaches from a bad solar agreement!
Dissatisfaction with service or savings
Moving houses can be hard, but bad service or low savings can make it worse. Some solar companies like SunRun have mixed reviews. Customers get upset with higher costs over time due to the annual escalator clauses. 1
Savings from a home solar lease might not meet your hopes. A system could save up to $65,000 in 30 years, according to EnergySage Marketplace data. But if you do not see these savings, it feels like throwing money away each month. 3
Solar energy should save you money, not add stress.
Consider looking at the contract for any loopholes or hidden fees before deciding your next step.
Steps to Cancel Before Installation
First, read the contract closely for any terms about canceling. Then, talk to the provider and try to make a deal….
Review contract for cancellation clause
I always read my contract’s cancellation clause first. It tells me how and when I can cancel the solar lease. This clause is important because it shows any penalties or fees involved.
Many times, I have three days after signing to cancel without a penalty.
Also, solar companies may give up to one month for no-penalty cancellations. 1 If not clear in the contract, ask the provider directly. Knowing this ahead of time helps avoid unexpected costs later on! 3Negotiate with provider
After reviewing the contract for the cancellation clause, contact your solar lease provider. Discuss your reasons for wanting to cancel. Ask if they offer a way out without extra fees.
Some companies might let you back out within 3 business days of signing. Stress how rising annual costs or moving houses impact your decision. It helps to be firm yet polite. 2
If they seem rigid, mention speaking with a lawyer next. That can sometimes nudge them toward offering better terms. Always conduct a cost-benefit analysis before agreeing on any fee structure changes. 3
Options for Canceling After Installation
You have a few options if you need to cancel your solar lease after installation. You can transfer the lease, buy it out, or purchase the system at market value.
Transfer lease to new homeowner
Transferring the lease to a new homeowner is possible. The leasing company can help with this process. 4 I might need to lower my home sale price to attract buyers willing to take over the lease. 1 Relocating the solar system may be an option, but it needs approval and can cost more. 1
Owned solar systems often boost home value by about $10,000. Many buyers like homes that already have renewable energy setups in place. It’s a win-win—less hassle for me and added value for them!
Buy out the lease
Buying out the lease means you prepay the remaining balance of your solar panel contract. This often enhances home value, sometimes by as much as $10,000. 1 Most contracts allow a buyout option after 5 to 7 years.
To buy out the lease, check if an appraiser needs to determine the market value for purchasing the system. Some leases include this clause. 3 After buying out the panels, choose whether to keep them or remove them from your roof.
Purchase the system at market value
After buying out the lease, another option is to purchase the system at market value. This disqualifies homeowners from claiming the federal investment tax credit (ITC). Checking your contract for this option can be helpful.
One leasing company stated that a buyout option usually becomes available after 5 to 7 years of the lease. 1
Paying off and fully owning solar panels can increase home value by around $10,000. According to NREL, homes with solar panels sell 20% faster and fetch 17% more than those without. 3 If you plan on selling soon or want complete ownership, purchasing might make sense.
Financial Considerations in Cancelling a Solar Lease
Canceling a solar lease can cost you money. The original agreement allows for only a 3-day cancellation period. 2 After this, you might face fees up to $2,500. Conduct a cost-benefit analysis first.
Check if the savings from ending your contract will cover the fee and any new expenses.
Long-term leases often last between 15 to 20 years and bind to your home’s title. 3 If buying out the lease or transferring it isn’t feasible, expect these hidden costs: legal advice fees, possible penalties for breach of contract, and impacts on property loans or home insurance rates.
Always review each term in detail before deciding to cancel.
Conclusion
Getting out of a solar lease can seem tough, but it’s possible. Review your contract carefully and explore your options like transferring the lease or buying it out. Check for hidden fees before making any moves.
Always weigh the costs and benefits to make the best decision for your home and wallet.
FAQs
1. How can I cancel a solar lease contract?
To cancel a solar lease contract, you need to review your contract carefully. Look for any clauses that allow you to back out of the agreement, such as buy-out options or prepaying the balance.
2. What should I check in my solar lease contract before signing?
Before signing a solar lease contract, check for any fine print about cancellation terms, unforeseen additional expenses, and buyout prices directly from one leasing company to another.
3. Can I get out of my solar lease after installation?
Yes, but it depends on what your contract says. Many contracts include specific circumstances under which you can cancel without legal action or additional cost.
4. Is there a way to sell my home with an existing leased solar panel system?
Yes, most contracts may allow transferring the leased system to the new homeowner—review your agreement for details on how this works and if there are any fees involved.
5. Will cancelling my solar lease affect my utility bill?
Cancelling your rooftop solar power system might result in higher monthly payments on your electric bill since you’ll no longer benefit from reduced energy production costs provided by the photovoltaic system.
6. What legal actions can I take if I’m unable to cancel my solar lease?
If you’re facing difficulties getting out of the contract despite following all steps… consider seeking advice from consumer protection agencies or taking civil litigation against unfair sales tactics employed by some installers or companies.
References
- ^ https://solar-to-the-people.com/cancelling-solar-lease-contract/
- ^ https://www.justanswer.com/consumer-protection-law/csd6t-cancel-solar-purchase-agreement-20-years.html (2019-08-19)
- ^ https://www.energysage.com/solar/solar-leases/cancelling-a-solar-lease-contract/
- ^ https://www.solarpaneltalk.com/forum/solar-panels-for-home/solar-panels-for-your-home/13888-breaking-a-solar-lease
