If a solar lender violated the Truth in Lending Act, you may have the right to cancel your loan, seek damages, or dispute the contract. TILA requires clear disclosure of loan terms before you sign, and many solar companies fall short.
What Is TILA and Why Does It Apply to Solar Loans?
The Truth in Lending Act (TILA) is a federal consumer protection law, enacted in 1968 and enforced by the Consumer Financial Protection Bureau. It requires lenders to clearly disclose the cost of credit before a borrower signs any agreement.
Solar loans are consumer credit products. That means TILA applies to them fully, just like it applies to auto loans or personal loans. If you financed your solar panels through a lender, you were legally entitled to certain disclosures upfront.
Many homeowners who were sold solar systems through aggressive door-to-door sales never received those disclosures properly. That is where TILA violations come in.
What Disclosures Does TILA Require?
Under TILA, your solar lender was required to give you a written disclosure statement before you signed the loan. This statement must include specific information about the terms of your credit.
| Required TILA Disclosure | What It Means |
| Annual Percentage Rate (APR) | The true yearly cost of the loan, including fees |
| Finance Charge | The total dollar amount the loan will cost you |
| Amount Financed | The actual loan amount being extended to you |
| Total of Payments | What you will have paid by the end of the loan |
| Payment Schedule | Exact number, timing, and amount of each payment |
| Prepayment Penalties | Any fees for paying off the loan early |
| Right of Rescission Notice | Your 3-day right to cancel for home-secured loans |
If any of these were missing, inaccurate, or buried in fine print that was not explained to you, the lender may have violated TILA.
Common TILA Violations in Solar Financing
Solar loans are particularly prone to TILA violations because of how they are sold. Sales reps often rush homeowners through paperwork at the kitchen table, with no time to read or compare terms.
1. Missing or Inaccurate APR Disclosure
The APR is one of the most commonly misstated figures in solar loan agreements. Some lenders advertise a low interest rate but fail to include dealer fees or origination charges in the APR calculation. This makes the loan appear cheaper than it actually is.
Under TILA, the APR must reflect the true cost of credit. An understated APR is a federal violation.
2. Failure to Disclose the Right of Rescission
For loans secured by your home, TILA gives you a three-business-day right to cancel. This is called the right of rescission. The lender must provide you with two copies of a Notice of Right to Cancel at the time of signing.
Many solar companies skip this step entirely. If you were never given this notice, your rescission period may still be open, in some cases for up to three years after signing.
3. Dealer Fee Concealment
Most solar loans involve a “dealer fee” that the solar company charges the lender for arranging the financing. This fee gets baked into your loan balance, often without your knowledge. When it is not disclosed as part of the finance charge, that is a TILA violation.
Lenders like Mosaic, Goodleap (formerly Loanpal), and Sunlight Financial have all faced scrutiny over how dealer fees are disclosed in their loan documents.
4. Incomplete Payment Schedules
TILA requires lenders to show you a full payment schedule before closing. If your documents only showed a monthly payment without the full term breakdown, or if the payments changed after an introductory period without clear disclosure, that is another potential violation.
What Happens When a Solar Lender Violates TILA?
TILA violations carry real consequences for lenders. As a homeowner, you have the right to take action if your lender did not comply.
Statutory Damages
Under 15 U.S.C. § 1640, a lender who violates TILA can be held liable for statutory damages. For individual cases, this ranges from $100 to $1,000. In class action lawsuits, it can go much higher.
You can also recover actual damages if you can show financial harm caused by the violation, plus attorney fees in many cases.
Extended Right of Rescission
This is the most powerful remedy available. Normally, you have three business days to rescind a home-secured loan. But if the lender failed to provide proper disclosures or a valid rescission notice, the Federal Reserve’s Regulation Z extends that window to three years from the date of consummation.
For many homeowners who signed solar loans two or three years ago, this window may still be open right now.
Loan Modification or Cancellation
In some cases, courts have ordered lenders to reform loan terms or cancel the agreement altogether when TILA violations were serious enough. This is not guaranteed, but it is a real outcome that homeowners have achieved.
How to Identify a TILA Violation in Your Solar Loan
Start by gathering your original loan documents. You are looking for the Truth in Lending disclosure form, which should be a separate document from the loan agreement itself.
Here is what to check:
- Is there a clearly labeled APR on the form?
- Does the finance charge match what you were told verbally?
- Is there a payment schedule with all payment amounts and dates?
- Did you receive two copies of a Notice of Right to Cancel?
- Was the total of payments disclosed clearly before you signed?
If you cannot find a TILA disclosure form in your paperwork at all, that alone may be grounds for a claim. Homeowners with Sunnova solar contracts and Freedom Forever agreements have reported similar missing disclosure issues.
TILA and the Solar Industry: A Growing Problem
The solar industry has seen explosive growth over the past decade. According to the Solar Energy Industries Association, residential solar installations have increased by over 60% since 2019.
With that growth has come a wave of consumer complaints. The CFPB received thousands of complaints related to solar financing in recent years, with many citing deceptive loan terms and missing disclosures.
States like California, Texas, Florida, and New York have all seen state attorney general investigations into solar sales practices. Several of these investigations specifically flagged TILA compliance failures by lenders and solar contractors alike.
What to Do If You Suspect a TILA Violation
You do not need to stay locked into a loan that was structured illegally. Here are the steps to take.
- Step 1: Pull all your loan documents together: Look for the Truth in Lending disclosure form, the loan agreement, and any Notice of Right to Cancel forms.
- Step 2: Compare what was disclosed vs. what was promised: If the APR, total cost, or payment schedule differ from what the salesperson told you, document everything.
- Step 3: File a complaint with the CFPB: You can submit a complaint at consumerfinance.gov. The CFPB will forward it to your lender and require a response.
- Step 4: Contact a consumer protection attorney: TILA cases are often taken on contingency, meaning you pay nothing unless you win. Many attorneys offer free consultations.
- Step 5: Reach out to Solar Equity Solutions: We have helped homeowners across the country navigate cancellations tied to improper disclosures and deceptive financing. Our team understands how solar loans work and how TILA violations affect your options.
Homeowners with Sunrun, Vivint Solar, and Momentum Solar contracts have all used TILA-related grounds to challenge their agreements.
Frequently Asked Questions
What is a TILA violation in a solar loan?
A TILA violation occurs when a solar lender fails to properly disclose loan terms such as the APR, finance charge, or right to cancel. It is a federal violation that gives you legal remedies, including potential loan cancellation.
Can a TILA violation let me cancel my solar loan?
Yes, in some cases. If your lender failed to give you a proper Notice of Right to Cancel, your rescission window may extend up to three years. This could give you grounds to cancel the loan legally.
How do I know if my solar lender violated TILA?
Check your loan documents for a Truth in Lending disclosure form. If it is missing, incomplete, or shows a different APR than what you were told, you may have a valid TILA claim.
Does TILA apply to solar leases and PPAs?
No. TILA applies to credit transactions, meaning loans. Solar leases and power purchase agreements (PPAs) are not loans, so they are governed by different consumer protection rules.
How long do I have to file a TILA claim?
For damages, you generally have one year from the date of violation. For rescission of a home-secured loan with missing disclosures, you may have up to three years. Consult an attorney to confirm your timeline.
Disclaimer: This article is for informational purposes only and does not constitute legal advice. If you believe your lender violated TILA, consult a licensed consumer protection attorney in your state.