The SolarCity to Tesla Solar Transition: A History of Problems

SolarCity was founded in 2006 and quickly became the largest residential solar installer in the United States. In 2016, Tesla acquired SolarCity for $2.6 billion in a controversial deal that many analysts called a bailout — SolarCity was hemorrhaging cash and facing mounting consumer complaints. Tesla rebranded the solar division as Tesla Energy, but the problems did not go away.

For homeowners with legacy SolarCity contracts, the Tesla acquisition created a confusing situation. Your contract is with "SolarCity Corporation," a company that technically no longer exists as a separate entity. Tesla assumed all obligations, but many homeowners report that Tesla treats solar customers as second-class citizens compared to its automotive and energy storage customers.

Tesla Solar Roof Damage: The Biggest Complaint

The single largest category of Tesla Solar complaints involves roof damage. Both SolarCity and Tesla Solar installations have been linked to thousands of cases of roof leaks, structural damage, and fire hazards. In 2021, Walmart sued Tesla for negligence after solar panels on seven Walmart stores caught fire. While that case was settled, it highlighted a systemic problem with installation quality.

Homeowners report that when they contact Tesla about roof leaks caused by solar panel installation, the company either denies responsibility, sends unqualified technicians who make the problem worse, or simply does not respond. Many homeowners have been forced to hire independent roofers at their own expense to repair damage caused by Tesla/SolarCity installations.

Top Tesla Solar / SolarCity Complaints in 2026

• →Roof leaks and structural damage from improper installation — the most common and most serious complaint
• →System underperformance — panels producing significantly less energy than the sales proposal promised
• →Customer service black hole — homeowners report waiting months for responses to service requests
• →Powerwall integration issues — systems that were supposed to include battery backup do not work as promised
• →Billing errors — incorrect charges, double billing, and unexplained payment increases
• →Contract transfer difficulties — selling a home with a Tesla Solar lease is extremely difficult
• →Legacy SolarCity escalator clauses — 2.9% annual increases that were never clearly explained

Tesla Solar BBB Rating and Legal History

Tesla Energy (including the SolarCity division) holds a B- rating with the Better Business Bureau, with over 3,500 complaints filed. The company has faced multiple class action lawsuits, state attorney general investigations, and individual lawsuits related to roof damage, misrepresentation, and breach of contract.

Legal Grounds for Tesla Solar Contract Cancellation

Roof Damage Claims

If Tesla or SolarCity damaged your roof during installation, you have a negligence claim in addition to potential breach of contract. Roof damage claims can be pursued independently of contract cancellation, and they often provide leverage for negotiating a full contract exit. The key is to get an independent roofing assessment that documents the damage and attributes it to the solar installation.

SolarCity Misrepresentation

SolarCity was notorious for aggressive door-to-door sales tactics and misleading savings projections. If your SolarCity salesperson made promises about energy savings, tax credits, or system performance that turned out to be false, you have a misrepresentation claim against Tesla (as SolarCity's successor). The statute of limitations for fraud claims varies by state, but many states allow claims to be filed within 3 to 6 years of discovering the fraud — not from the date of signing.

Breach of Warranty

Both SolarCity and Tesla Solar contracts include performance warranties. If your system is not producing the energy it was guaranteed to produce, Tesla is in breach of warranty. Request your production data from Tesla and compare it against the guaranteed output in your contract. Any shortfall of more than 10% is typically considered a material breach.

How to Cancel Your Tesla Solar / SolarCity Contract

Canceling a Tesla Solar contract requires a strategic approach. Tesla is a large corporation with significant legal resources, but they also have a strong incentive to settle disputes quietly rather than face public litigation. Here is the recommended process:

First, document everything. Gather your original SolarCity or Tesla Solar contract, all correspondence, production data, utility bills, and any evidence of roof damage or system problems. Second, file complaints with your state attorney general, the FTC, and the BBB. Third, consult with a consumer protection attorney who has experience with Tesla Solar cases. Fourth, do not accept any settlement offer without legal review — Tesla's first offer is almost always far below what you are entitled to.