Solar Freedom Blog Post

Solar Contract Rescission Rights | 3-Day Cancel Guide

Need to cancel a solar contract? Learn the 3-day rescission rule, defective notice issues, certified-mail steps, and options after the window closes.

Legal Rights

Federal law gives you 72 hours to cancel any contract signed at your home -- including solar. Most solar companies bury this right in fine print and hope you miss it. Here is exactly how to use it.

The solar salesperson came to your door, gave you a compelling pitch, and you signed. Now it has been 24 hours and you are having second thoughts. Here is something the solar company almost certainly did not emphasize: federal law gives you the right to cancel that contract within 3 business days, no questions asked, with a full refund of any deposit. This is called the FTC Cooling-Off Rule, and it applies to any sale made at your home for $25 or more.

The FTC Cooling-Off Rule: Your Federal Cancellation Right

Under 16 CFR Part 429, the Federal Trade Commission requires that any seller who solicits a sale at your home must give you two copies of a cancellation notice and inform you of your right to cancel within 3 business days. The contract must include a notice of this right in at least 10-point type. If the seller fails to provide this notice -- or provides it in a way that obscures or minimizes it -- the 3-day window may be extended, and the contract may be voidable at any time.

3 days

Federal cancellation window

$0

Cost to cancel within window

100%

Deposit refund required

10pt

Required notice font size

How to Cancel: The Exact Steps

Step 1: Write a cancellation notice. It does not need to be formal -- it just needs to clearly state that you are canceling the contract. Include your name, address, the date of the original contract, and a statement that you are exercising your right to cancel under the FTC Cooling-Off Rule. Step 2: Send it via certified mail with return receipt requested. This creates a legal record of the cancellation date. Step 3: Keep a copy of everything. The company has 10 days to return your deposit and 20 days to pick up any goods left at your property.

Do NOT cancel by phone or email alone. The FTC Cooling-Off Rule requires written notice. A phone call is not sufficient and can be denied by the company. Always send certified mail.

What If the 3-Day Window Has Passed?

If more than 3 business days have passed, the FTC Cooling-Off Rule no longer applies as a standalone cancellation right. However, there are several other legal grounds that may allow you to cancel the contract: failure to provide the required cancellation notice (which extends the window), deceptive sales practices, TILA violations, state consumer protection laws, and unconscionable contract terms. These are the grounds our team evaluates in a free contract review.

The Dirty Secret: Most Solar Companies Violate the Notice Requirement

In our team's experience reviewing hundreds of solar contracts, a significant percentage contain defective or missing cancellation notices. The notice is buried in fine print, printed in type smaller than required, not provided as a separate document, or not provided at all. Each of these failures is a violation of federal law -- and each one potentially extends your cancellation window far beyond 3 days. This is one of the first things our team checks in a free contract review.

If your solar contract does not have a clearly visible, properly formatted cancellation notice on a separate page, your 3-day window may never have legally started. This is a powerful cancellation ground regardless of how long ago you signed.

TILA Rescission Rights: The 3-Year Window

The Truth in Lending Act (TILA), 15 U.S.C. Section 1635, provides a separate and more powerful rescission right for any credit transaction secured by your home. If a solar loan or PPA is secured by a lien on your home, TILA gives you the right to rescind within 3 business days of signing -- and if the lender fails to provide the required TILA disclosures, that window extends to 3 YEARS. This is one of the most powerful and underutilized consumer protection rights in solar contract law.

3 years

TILA rescission window if disclosures missing

20 days

Lender must release lien after rescission

$0

Loan balance voided on rescission

$7K+

Hidden dealer fees triggering TILA violations

What TILA Disclosures Are Required?

Under TILA, the lender must provide: (1) the right to rescind notice on a separate document, (2) the exact rescission deadline date in writing, (3) the Annual Percentage Rate accurately disclosed, (4) the total amount financed, (5) the total of all payments over the loan term, and (6) the finance charge in dollars. If any of these disclosures are missing, inaccurate, or unclear, the 3-year rescission window applies. Solar loans from GoodLeap, Mosaic, Sunlight Financial, and Dividend Finance have all faced TILA violation claims based on undisclosed dealer fees.

The dealer fee scandal: Many solar lenders charge a dealer fee of $7,000 to $10,500 that is hidden in the loan principal but never disclosed as a finance charge. This is a TILA violation that triggers the 3-year rescission right. If your loan amount is significantly higher than your installer quoted, you may have been charged a hidden dealer fee.

State-by-State Rescission Rights: Going Beyond Federal Law

Many states have enacted consumer protection laws that provide rescission rights beyond the federal FTC Cooling-Off Rule. These state laws often have longer cancellation windows, apply to a broader range of transactions, and provide additional remedies including attorney fees and treble damages.

• California (Cal. Civ. Code Section 1689.5): 3-day right to cancel home solicitation contracts. Failure to provide notice extends window indefinitely. California also has the Home Solicitation Sales Act which provides additional protections.
• Florida (Fla. Stat. Section 501.021): 3-day cancellation right for home solicitation sales. Florida FDUTPA provides additional remedies including attorney fees for deceptive practices.
• Texas (Tex. Bus. & Com. Code Section 601): 3-day cancellation right. Texas DTPA allows triple damages for deceptive trade practices -- one of the strongest consumer protection laws in the country.
• Arizona (A.R.S. Section 44-5001): 3-day cancellation right for door-to-door sales. Arizona Consumer Fraud Act (A.R.S. Section 44-1521) provides additional remedies.
• Nevada (NRS 598.2821): 3-day cancellation right. Nevada Deceptive Trade Practices Act (NRS 598.0915) provides strong additional protections.
• New Jersey (N.J.S.A. 17:16C-62): 3-day cancellation right. New Jersey Consumer Fraud Act provides treble damages and attorney fees.
• New York (N.Y. Pers. Prop. Law Section 425): 3-day cancellation right. New York GBL Section 349 provides additional consumer protection remedies.

How to Exercise Your Rescission Right: Step-by-Step

Step 1: Identify your grounds. Is it within 3 business days (FTC Cooling-Off)? Does your loan have a home lien (TILA)? Were the required disclosures missing or defective? Step 2: Write your rescission notice. Include your name, address, loan or contract number, date of original signing, and a clear statement that you are rescinding the contract under the applicable law. Step 3: Send via certified mail with return receipt requested to the solar company AND the lender separately. Step 4: Document everything -- take photos of the envelope, keep the certified mail receipt, and save all correspondence. Step 5: The company has 20 days to release any lien on your property and return all payments.

Common Defenses Solar Companies Use -- And How to Counter Them

• You signed the contract -- Signing does not waive your rescission rights. Federal and state rescission rights cannot be waived by contract.
• The 3-day window has passed -- If the required notice was not properly provided, the window may not have started. TILA provides a 3-year window for home-secured loans with defective disclosures.
• You owe a cancellation fee -- Cancellation fees are unenforceable if you have a valid rescission right. The rescission voids the entire contract.
• We already installed the panels -- Installation does not affect your rescission rights. The company must remove the panels at their expense.
• You need to go through arbitration -- Arbitration clauses may be unenforceable in consumer protection cases, particularly for TILA violations.

Frequently Asked Questions

Does the FTC Cooling-Off Rule apply to solar contracts signed online?

The FTC Cooling-Off Rule applies to in-home solicitation sales. If a sales rep came to your home and you signed there, the rule applies. Online-only transactions have different rules, but TILA and state consumer protection laws often provide similar protections for home-secured credit transactions.

What is the difference between FTC rescission and TILA rescission?

The FTC Cooling-Off Rule applies to all home solicitation sales and provides a 3-day cancellation window. TILA rescission applies specifically to credit transactions secured by your home and provides a 3-day window that extends to 3 years if the required disclosures are missing or defective. Both rights may apply simultaneously to the same solar contract.

Can I rescind a solar contract after installation?

Yes. Installation does not affect your rescission rights. If you have valid grounds such as a defective notice, TILA violations, or deceptive practices, you can rescind after installation. The company must remove the panels at their expense and release any liens on your property.

What if the solar company refuses to honor my rescission?

If the company refuses to honor a valid rescission, you can file suit in federal court for TILA violations or state court for FTC or state law violations. You may be entitled to statutory damages, actual damages, attorney fees, and costs. A consumer protection attorney can help you enforce your rights.

Do I need a lawyer to rescind a solar contract?

You do not need a lawyer to send a rescission notice, but having legal representation significantly improves your chances of success, especially if the company disputes the rescission. Many consumer protection attorneys work on contingency for TILA cases, meaning you pay nothing unless you win.

Get a Free Contract Review

If you believe you have grounds to rescind your solar contract -- whether under the FTC Cooling-Off Rule, TILA, or your state consumer protection laws -- our network of consumer protection attorneys can evaluate your contract for free. We identify defective notices, TILA violations, and deceptive practices that most homeowners never know to look for.