You’ve listened to the sales pitch, reviewed the proposal, and decided to move forward with solar. Now comes the most critical step: signing the contract. The salesperson might hand you a 40-page document filled with dense legal text and casually say, “just sign here.” It’s tempting to skim and sign, especially when you’re feeling excited or pressured.
This is a mistake.
The solar contract is the single most important document in your entire project. It is the legally binding agreement that dictates the rights and responsibilities of both you and the solar company for the next 25 years. The secrets to a successful solar investment—or a future financial nightmare—are buried in that text. This guide will teach you how to read a solar contract like a pro, breaking it down section by section so you know exactly what to look for.
1. The Scope of Work & Equipment List
This section details exactly what you are buying. Do not accept vague descriptions. It should read like a detailed inventory list.
- What to look for: The exact make, model number, and quantity of your solar panels (e.g., “32 x Qcells Q.PEAK DUO G10+ 380W”) and your inverters (e.g., “32 x Enphase IQ8+ Microinverters”).
- Why it matters: This prevents a common “bait-and-switch” tactic where a company promises you premium, Tier-1 equipment during the sales pitch but the contract allows them to install a cheaper, lower-quality brand. The specifics must be in writing.
2. The Performance Guarantee & Estimated Production
This is where the company outlines how much electricity your system is expected to produce.
- What to look for: A specific “Estimated Annual Production” number, measured in kilowatt-hours (kWh). Pay close attention to the wording. Is it an “estimate,” a “projection,” or a “guarantee”? A “guarantee” is a much stronger, legally enforceable promise.
- Why it matters: If your contract has a production guarantee, it must also have a “remediation clause” that spells out exactly what happens if the system underperforms. Will they pay you for the shortfall? Will they add more panels? Without a remedy defined in the contract, a guarantee is meaningless.
3. The Pricing & Payment Schedule
This section outlines the total cost and when payments are due. It’s often the source of the most significant disputes.
- What to look for: A clear “Total System Cost” or “Cash Price.” Compare this number directly to the “Total Amount Financed” in your loan agreement. If the financed amount is significantly higher, it’s because a large, hidden dealer fee has been added.
- Why it matters: Understanding the true cash price is the only way to know if you’re getting a fair deal. Also, scrutinize the payment schedule. In many states, like New York, it is illegal for a contractor to demand most of the payment before the work is substantially complete.
4. The Warranty Section (Workmanship vs. Manufacturer)
You have two different warranties. It is critical to understand who is responsible for what.
- What to look for: The length and terms of both the manufacturer’s warranty (which covers the physical panels and inverters if they break) and the installer’s workmanship warranty (which covers issues from the installation itself, like a roof leak). The workmanship warranty is a direct reflection of the installer’s confidence in their own work.
- Why it matters: If your roof starts leaking in five years but the workmanship warranty was only for two years, you may be left with the repair bill.
5. The Exclusions & Homeowner Responsibilities
This is the section that details what the solar company is not responsible for.
- What to look for: Common exclusions include damage from “acts of God,” or any issues caused by your failure to maintain the system. Pay close attention to your responsibilities. Are you required to regularly clean the panels? Are you responsible for trimming trees that might grow to shade the system in the future?
- Why it matters: This section can contain costly surprises down the road.
6. The Arbitration Clause
Somewhere in the fine print, you will likely find a “Binding Arbitration Clause.”
- What to look for: Language that states any dispute must be settled through private arbitration instead of in a public court.
- Why it matters: By signing this, you are likely waiving your right to a jury trial or to join a class-action lawsuit. While these clauses are common, it’s essential to know you are agreeing to it.
7. The Cancellation Clause (Right of Rescission)
This section outlines your right to cancel the contract.
- What to look for: The contract should clearly explain your right to cancel within three business days, as mandated by the FTC’s Cooling-Off Rule. It should also state the exact procedure for doing so.
- Why it matters: As we’ve discussed, if this notice is missing or incorrect, your right to cancel may be extended, providing powerful leverage in a dispute.
Conclusion: An Ounce of Prevention
A solar contract is one of the most significant financial documents you will ever sign. Taking the time to read these key sections carefully is your best defense. If you have already signed a contract and are now facing issues, it’s not too late. Our expert case review process involves a forensic analysis of your agreement to identify the very discrepancies and violations discussed in this guide, providing you with the leverage you need to build a powerful case.