How to Get Out of a Solar Loan: A Comprehensive Guide

The sun. It’s the heart of our solar system, the giver of life, and increasingly, a beacon of hope for a sustainable future. For many homeowners, that bright future translated into investing in solar panels, hoping to harness sunlight for energy savings and environmental stewardship. But what happens when the looming cloud of a solar loan overshadows the glow of those savings?

Solar energy is undeniably transformative. It promises reduced carbon footprints, slashes in electricity bills, and potential earnings from surplus energy. Yet, like any significant investment, it often comes with a price tag that can’t be paid upfront: a solar loan. For some, this financial agreement starts as a dream ticket to green energy but can evolve into a complex web of commitments and concerns.

If you’ve found yourself wondering how to get out of a solar loan, you’re not alone. This guide is designed for you.

It’s more than just a lifeline; it’s a map charting the course through the complexities of solar financing. Dive in, and let’s turn that cloudy forecast into clear skies ahead.

What are the different types of solar loans?

When diving into solar financing, it’s essential to recognize that not all solar loans are created equal. You’ll encounter two primary categories: purchase loans and lease agreements.

With purchase loans, you’re borrowing funds to acquire a solar system. Think of it as buying a car with a loan; once you’ve paid it off, the vehicle – or, in this case, the solar system – is yours.

The perk here is ownership, which means any benefits or incentives tied to having solar panels directly benefit you. However, the flip side is that maintenance and any necessary repairs fall squarely on your shoulders.

On the other hand, lease agreements present a different proposition. Instead of purchasing the solar system, you’re essentially renting it. You’ll install the system on your property and make monthly payments to the solar company.

While this might sound similar to a purchase loan, there’s a notable distinction: the solar company retains ownership of the system.

This means they’re also responsible for its upkeep and any repairs that might be needed. It’s a hands-off approach, ideal for those who want the advantages of solar energy without ownership responsibilities.

Also read: How to Get a Business Loan in North Carolina?

How to Get Out of a Solar Loan

How to get out of a solar purchase loan?

Solar energy has become a promising solution for many homeowners looking to harness renewable energy.

However, sometimes circumstances change, and you may need to exit your solar purchase loan. If you’re in this position, here’s a step-by-step guide to help you through the process.

1. Dive Deep into Your Contract:

Your first port of call should be a thorough examination of your solar loan contract. Understand every clause, mainly focusing on rights, obligations, and the specifics of termination.

Be aware that many contracts carry a termination fee, a penalty for opting out before the agreed period. This fee can differ based on the lending company and the specifics of your agreement.

2. Pinpoint Your Reasons:

Before making any moves, clarity on why you wish to exit the loan is crucial. Potential reasons could be:

  • I need help with the monthly payments.
  • I am relocating to a residence where solar installation isn’t feasible.
  • Issues with the solar system need to be addressed by the provider.
  • A breach in the contract by the solar company.
  • If your reasons are strong and valid, there’s potential to negotiate waiving the termination fee with the company.

3. Initiate a Dialogue with Your Solar Loan Provider:

Contact your solar loan company with your reasons and understanding of the contract. Communicate your situation and express your desire to terminate the agreement.

Some companies might be open to discussing a termination arrangement, which could involve a reduced termination fee or a one-time payment to clear the remaining balance.

4. Survey Alternative Exit Strategies:

If direct negotiations don’t yield results, don’t lose hope. You still have a few avenues to explore:

  • Buy Out the System: Consider buying the solar panel system outright if your finances allow it. This action ends the loan and ensures you have complete ownership of the system.
  • Transfer the Lease: For those under a solar lease arrangement, transferring the lease to a new homeowner might be an option. This can be intricate, so collaborating with the solar company and seeking legal counsel is recommended.
  • Bankruptcy Declaration: While this is a drastic measure and should be considered a last resort, declaring bankruptcy might be the way forward if you’re drowning in unmanageable debt and can’t find a way out of the loan.

Exiting a solar loan requires careful thought, planning, and often, negotiation. By understanding your contract and rights and communicating effectively with your provider, you can find a solution that works for you.

Also read: How To Make Money with Flash Loans?

How to Get Out of a Solar Loan

How to get out of a solar lease agreement?

Embarking on a journey with solar energy is exciting, but there might come a time when you need to rethink that commitment, especially if you’ve opted for a solar lease agreement.

Fortunately, there are methods to unwind this commitment, and here’s a concise look into each one:

1. Opt for a Buyout:

One of the most straightforward ways to end your solar lease agreement is to buy the system outright, often at a discounted price.

By doing this, not only do you gain ownership of the solar infrastructure, but you also free yourself from the recurring monthly payments to the solar company. It’s like switching from renting a house to becoming the outright owner.

2. Hand Over the Baton:

Selling your home doesn’t necessarily mean you’re stuck with the lease. You can often transfer the solar lease to the new homeowner. However, a few things to keep in mind are:

  • The incoming owner must meet the qualifications set by the solar company.
  • There might be associated transfer fees, which could be your responsibility.

3. Engage in a Dialogue:

Sometimes, the best way forward is a simple conversation. Reach out to your solar company with a clear intention to discuss the possibility of an early termination. Companies often have mechanisms in place for such scenarios.

While this might involve a termination fee, there’s also the potential for an agreement where you can purchase the system at a reduced rate.

Solar lease agreements, like any other contract, come with their terms and conditions. While they offer a fantastic way to embrace renewable energy without the hefty upfront cost, there might be times when ending the agreement is the best course of action.

Knowing your options and understanding the implications of each can make this transition smoother and more manageable.

Important things to consider before getting out of a solar loan:

Venturing into solar energy is a long-term commitment, both environmentally and financially. If you’re contemplating an exit from your solar loan or lease agreement, ensuring you’re making an informed decision is crucial. Here are some pivotal points to keep in mind:

1. The Price of Breaking Free:

One of the primary concerns when exiting early is the termination fee. Whether it’s a loan or lease agreement, many solar contracts come with these fees, which are penalties for premature termination.

The exact amount can differ, depending on the specifics of your lender or solar company. Sometimes, these fees can be hefty, so factoring this into your decision-making process is essential.

2. Credit Score Implications:

Your credit score is a reflection of your financial responsibility. Terminating a solar loan or lease can leave a mark on this score.

When you exit, it’s recorded as a closed account, which might negatively influence your credit standing. Before making a move, consider how this might affect your future borrowing potential.

3. The Future of Your Energy Bills:

Solar panels aren’t just about being eco-friendly but also about cost-saving. They can significantly slash your energy bills, giving you monthly savings that can accumulate over the years.

By exiting your agreement, you stand to lose these savings. Evaluating the long-term financial implications versus the immediate relief of leaving the loan is worth considering.

While freeing yourself from monthly payments or other concerns related to your solar agreement might be tempting, it’s vital to approach this decision with a comprehensive understanding of its repercussions. Ensure you weigh the pros and cons, considering immediate and long-term impacts.

Filing a Complaint: Standing Up Against Solar Loan Challenges

If you find yourself trapped in a tricky solar loan situation and believe that your rights as a consumer have been violated, turning to a government agency can be a powerful recourse. Here’s a structured approach to complaining:

1. Document Everything:

Before contacting any agency, ensure a clear record of all interactions with the solar company. This includes contracts, correspondence, payment records, and other relevant documentation.

Having a comprehensive paper trail not only strengthens your case but also helps the agency understand the specifics of your situation.

2. Identify the Right Agency:

Different government agencies handle various aspects of consumer complaints. For issues related to solar loans or financial discrepancies, consider approaching agencies that oversee financial institutions or consumer protection in your region or country.

3. Fill Out the Necessary Forms:

Most government agencies have a structured process for lodging complaints. This often involves filling out specific forms or online submissions. Ensure you provide detailed and accurate information, referencing your documented interactions where needed.

4. Await Response:

Once you’ve submitted your complaint, there’s typically a waiting period while the agency reviews the case. They may reach out for additional information or clarification. It’s crucial to respond promptly and provide any requested data.

5. Seek Legal Counsel:

If your case is particularly complicated or is not getting the desired resolution, consider seeking legal advice. A lawyer familiar with consumer rights and solar energy regulations can provide guidance and represent you if the situation escalates.

Remember, standing up for your rights is essential. Government agencies are there to protect consumers, ensuring that companies operate within the confines of the law. By complaining, you advocate for your interests but also help highlight potential industry issues that others might face.


Venturing into the world of solar energy is both a hopeful leap toward sustainability and a substantial financial commitment. And while the sun’s rays might be endless, sometimes our personal or financial situations change, prompting us to reconsider our solar loan agreements.

Yes, untangling oneself from a solar loan can feel intricate, but it’s entirely achievable with the proper knowledge and approach.

Each person’s journey with solar loans is unique, influenced by individual agreements, reasons for wanting an exit, and financial conditions.

Whether it’s through buying out the system, transferring leases, or negotiating with the solar company, the path you choose should resonate with your circumstances. It’s paramount to pause, reflect, and weigh the potential repercussions before deciding.

Remember that knowledge is your compass in the vast expanse of solar energy and financing. By staying informed, understanding your rights, and considering the long-term implications, you can make the right decisions for you.

Whether you continue to bask in the sun’s savings or choose a different horizon, know that the power to choose is always in your hands.


What if I’m not facing any issues but want to get out of my solar loan?

Even if you’re not encountering specific problems, you might still have valid reasons for wanting to exit your solar loan, such as relocating to an area where solar panels aren’t viable. In such cases, reviewing your contract, understanding any termination fees, and communicating with your solar company to discuss potential exit strategies are essential.

How will exiting my solar loan impact my ability to get future loans?

Terminating a loan prematurely might be recorded on your credit report, and depending on how the loan is settled, it could have a positive, neutral, or negative effect on your credit score. A negative mark could influence lenders’ decisions when seeking future loans. It’s always advisable to consult a financial advisor or credit expert before making such decisions.

Can the solar company refuse to let me out of my contract?

Solar companies are bound by the contract terms, just like you are. If there are stipulated exit clauses or termination procedures in the agreement, they must adhere to them. However, if the contract does not provide any exit routes or if certain conditions aren’t met, the company may be within its rights to refuse termination without penalties.

Are there any alternatives to government agencies if I feel my rights have been violated?

Yes, besides government agencies, you might consider mediation or arbitration, which can be faster and less formal. You can also seek legal counsel and potentially file a lawsuit if you believe there’s a strong case. It’s essential to understand all your options and their implications.

If I transfer my lease to a new homeowner, am I still liable in any way?

While transferring a lease can shift the responsibility of monthly payments to the new homeowner, you might still be liable for transfer fees or any conditions set during the transfer process. Ensuring all terms are documented during the transfer is crucial so there’s no ambiguity about future responsibilities.

Olivia is a finance expert with years of experience in the industry. She is passionate about helping people make informed decisions about their finances, and her expertise lies in the areas of loans and insurance policies.

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