Quick Answer: You can get out of a solar panel lease by using your 3-day federal rescission right, negotiating a buyout with the leasing company, transferring the lease to a home buyer, or pursuing legal cancellation based on misrepresentation or breach of contract. The right path depends on when you signed and what your contract says.
Why Getting Out of a Solar Lease Is Harder Than It Sounds
A solar panel lease looks attractive on the surface: no upfront cost, clean energy, and a fixed monthly payment. But most homeowners who signed one did not fully understand they were entering a legally binding 20 to 25-year agreement with a third-party company that owns the equipment on their roof.
Getting out of a solar lease is not like canceling a subscription. The leasing company owns the panels. They have a UCC-1 lien filed against your property title. And most solar lease agreements include an escalator clause that increases your monthly payment by 1 to 3 percent every single year, whether you want that increase or not. What starts as $120 per month can easily become $200 or more by year 15.
Consumer complaints about solar leases have surged in recent years. The FTC received over 13,000 solar-related complaints in 2023 alone, with undisclosed escalator clauses and inflated savings projections topping the list of grievances.
If you are looking for a solar lease exit, you are far from alone, and you likely have more options than your leasing company wants you to know about.
Option 1: Cancel Within the Rescission Period (The Cleanest Exit)
The fastest and most penalty-free way to cancel a solar lease agreement is to act within the federal 3-day rescission window. Under the FTC Cooling-Off Rule, any contract signed in your home for over $25 gives you three business days to cancel without any fees or consequences.
To use this right correctly:
- Send written cancellation notice before midnight of the third business day after signing
- Use certified mail with return receipt and follow up by email
- Saturday counts as a business day; Sundays and federal holidays do not
- The company must return your deposit within ten business days
Some states extend this window further. California’s Home Solicitation Sales Act and Business and Professions Code Section 7159 both provide additional protections for homeowners 65 and older, extending the window to five days.
If you are in the first few days after signing a solar panel lease agreement and feel uncertain, act immediately. Every hour matters.
Option 2: Solar Lease Buyout
If your rescission window has closed, a lease buyout is often the most straightforward solar lease exit available. This means you pay the leasing company a lump sum to purchase the system outright or terminate the agreement early.
Buyout costs typically range from $10,000 to $25,000 depending on system size, age, and the specific terms in your contract. Most solar lease agreements include a buyout schedule, often found in Section 7 or the pricing appendix, that shows predetermined buyout prices at specific intervals such as year 5, year 10, and year 15.
Pros of buying out your solar lease:
- You own the system outright and eliminate monthly payments
- You may qualify for any remaining production incentives
- The UCC-1 lien is removed from your property title
- Home sale complications are eliminated
Cons:
- Upfront cost can be substantial
- Older systems may not be worth the buyout price
- Some contracts calculate buyout based on remaining payment obligations rather than fair market value, which inflates the cost considerably
Always get your buyout quote in writing before agreeing to anything. For companies like Sunrun, you can request a buyout figure directly from their contract resolution department.
For SunPower accounts (which transitioned to Complete Solaria following its 2024 bankruptcy) and Sunnova (which filed Chapter 11 in 2025), buyout processing has been slower and requires direct contact with the successor servicer.
Option 3: Transfer the Solar Lease to a New Homeowner
If you are selling your home, transferring the solar panel lease to the buyer is usually the path of least resistance. Most solar lease agreements explicitly allow this, provided the new buyer qualifies financially with the leasing company.
Here is what the transfer process typically involves:
| Step | What Happens |
| Buyer credit check | Leasing company requires 650+ FICO score typically |
| Transfer paperwork | Both parties sign documents provided by the leasing company |
| Timeline | Usually 2 to 4 weeks; start early in the escrow process |
| Buyer agreement | Buyer takes on remaining lease terms including escalator clauses |
The key issue with lease transfers is that many buyers in today’s market are reluctant to take on a 15 or 20-year financial obligation attached to the home. If your buyer refuses the transfer, you may be left with the choice between a costly buyout or a delayed closing.
Disclosing the solar lease early in the listing process and having your transfer paperwork ready before you go under contract dramatically reduces the risk of deals falling through.
Option 4: Legal Cancellation Based on Misrepresentation
This is the route most homeowners do not know about, and for many it is the strongest. If the sales representative who sold you the lease made materially false claims, you may have valid grounds to pursue solar lease cancellation without paying any buyout fee.
Common misrepresentations that support legal solar lease exit include:
- False promises about monthly savings or bill elimination
- Failing to disclose the escalator clause or downplaying its impact
- Inflated system production estimates that did not match real output
- Claiming the panels would increase your home value without qualification
- Misrepresenting tax credit eligibility (especially relevant for leases, where the homeowner does not own the system and cannot claim the residential tax credit)
- Forged or rushed digital signatures on financing documents
Under the FTC Act Section 5 and various state consumer protection statutes, these types of misrepresentations are actionable grounds for contract rescission. Legal cancellation through this route means the solar panel lease agreement can be voided, liens removed, and in some cases damages recovered.
Companies like Vivint Solar (now NRG Energy), Tesla Solar, Freedom Forever, and Sunnova have all faced consumer complaints and legal actions related to deceptive sales practices. If you believe you were misled, the specific facts of your sale matter enormously, and a professional contract review is the right first step.
Option 5: Cancel a Solar Lease Due to Company Failure or Breach
If the leasing company has failed to perform its contractual obligations, that breach may support your solar lease cancellation. Examples include:
- The system has been offline for months, and the company refuses to repair it
- The company went out of business (as happened with Peterson Dean Solar and Horizon Solar Power, which left thousands of homeowners with inactive systems and active payment obligations)
- Permits were never properly closed or inspections were never completed
- The system never produced the energy output guaranteed in the contract
When a solar company breaches its obligations, your obligation to continue paying can be directly challenged. Document all system outages, repair requests, and company communications carefully. This documentation forms the backbone of any breach-based solar lease exit.
Escalator Clause: The Reason So Many Homeowners Want Out
No discussion of how to get out of a solar panel lease is complete without addressing the escalator clause directly. Most solar leases sold between 2015 and 2024 include an annual payment increase of 1.5 to 2.9 percent, compounded each year for the life of the lease.
At 2.9 percent annual escalation, a payment that starts at $150 per month reaches approximately $280 per month by year 25. Meanwhile, if electricity rates in your area decline or your usage drops, the economics of the lease deteriorate even further.
Many homeowners who were told they would “never pay a utility bill again” are now paying both a solar lease payment and a supplemental utility bill.
If the escalator clause was not clearly disclosed to you at the time of signing, that undisclosed term may constitute a material omission and is frequently cited as grounds for solar panel lease agreement cancellation through legal channels.
What About a Power Purchase Agreement (PPA)?
A solar PPA is similar to a lease in that you do not own the panels, but instead of a fixed monthly payment, you pay per kilowatt-hour of energy the system produces. Getting out of a solar PPA follows essentially the same paths: rescission, buyout, transfer, or legal cancellation.
The key difference is that your payment varies with system output, which can make future cost projections harder to pin down. PPAs also carry escalator clauses in most cases, and the same misrepresentation grounds apply.
If your PPA was sold without a clear explanation of how the per-kWh rate escalates over time, that is a potential basis for solar lease contract cancellation through consumer protection law.
Does Canceling a Solar Lease Hurt Your Credit?
It can, if you handle it the wrong way. Stopping payments on a solar lease without a formal dispute or cancellation process in place will likely result in the account being sent to collections, which damages your credit significantly.
The right approach is to pursue a documented cancellation, legal dispute, or buyout negotiation before stopping any payments. A properly executed solar panel lease cancellation protects your credit throughout the process. Solar Equity Solutions manages this entire process on behalf of homeowners to ensure no unintended credit consequences occur.
Brand-Specific Solar Lease Cancellation: What to Know
Every major leasing company structures its solar panel lease agreements differently. Here is a brief overview:
- Sunrun is the largest residential solar lessor in the United States. Sunrun leases run 20 to 25 years with escalators up to 2.9 percent annually. Buyout quotes are available by calling their contract resolution team. Legal cancellation cases involving Sunrun frequently center on undisclosed escalator clauses and inflated NEM credit projections.
- Tesla Solar (formerly SolarCity) leases are now serviced through Tesla Energy. These agreements often have fixed escalators and specific buyout schedules. Transfer to a new buyer requires Tesla’s credit approval and can take several weeks.
- Sunnova filed for Chapter 11 bankruptcy protection in 2025. Homeowners with Sunnova leases should contact the bankruptcy court’s consumer assistance line and a solar lease exit specialist before taking any action, as the normal cancellation process has been disrupted.
- SunPower, following its 2024 bankruptcy, transitioned its residential portfolio to Complete Solaria. If you are trying to exit a SunPower lease, your servicer contact information may have changed and all correspondence should now go to Complete Solaria.
- Palmetto Solar and Titan Solar Power both use third-party financing partners, which means canceling the solar panel agreement requires notifying both the installer and the separate lender.
- Horizon Solar Power ceased operations, leaving affected homeowners needing to address their lease or loan obligations directly with the financing company. For homeowners who signed Peterson Dean Solar contracts before the company’s closure, the path to solar lease exit runs primarily through the lender.
Exit a Solar Lease With Experts
Solar Equity Solutions is a BBB-accredited firm that has successfully cancelled or renegotiated more than 5,000 solar contracts and leases for homeowners across the country. We specialize exclusively in solar lease cancellation, solar loan disputes, and solar panel contract cancellation across all major companies and financing structures.
If you are currently in a solar panel lease agreement that is costing you more than promised, or if you simply want to understand your options, contact Solar Equity Solutions for a free case review.
FAQs
Can I cancel a solar panel lease after it has been installed?
Yes. Misrepresentation, undisclosed escalator clauses, system underperformance, and company breach of contract are all valid grounds for solar lease cancellation after installation. Professional assistance is strongly recommended.
How much does it cost to buy out a solar lease?
Solar lease buyout costs typically range from $10,000 to $25,000 depending on system size, age, and the terms in your specific agreement. Always get the buyout figure in writing before agreeing.
Can I transfer my solar lease when selling my home?
Yes, in most cases. The buyer must pass the leasing company’s credit check and agree to take on the remaining lease terms. Start the transfer process at least 30 days before your expected closing date.
What is an escalator clause in a solar contract cancellation?
An escalator clause automatically increases your monthly solar lease payment by 1 to 3 percent annually. If this clause was not clearly disclosed when you signed, its omission may support legal solar panel lease agreement cancellation.
Disclaimer: This content is for general informational purposes only and does not constitute legal advice. Solar lease laws and contract terms vary significantly by state and company. For guidance specific to your situation, consult a licensed attorney or contact Solar Equity Solutions for a complimentary case review.