You’ve realized your solar contract isn’t what you were promised. The savings aren’t there, the equipment is faulty, or you’ve discovered hidden fees that make the deal untenable. You’ve moved beyond wanting a simple repair; you want out completely. You want to turn back the clock to before you ever signed the agreement. In the legal world, this powerful remedy is known as “rescission.”
To rescind a solar contract is to declare it null and void, effectively erasing it as though it never happened. It is a powerful but complex legal remedy, reserved for specific situations where a consumer’s rights have been significantly violated. This guide will explain what rescission entails and the most common legal grounds that might give you the right to unwind your solar deal.
What Does It Truly Mean to Rescind a Contract?
Rescission is more than just a simple cancellation. The goal is to restore both parties—you and the solar/finance company—to the financial position they were in before the contract was signed.
While the exact outcome can vary, a successful rescission typically means:
- The homeowner must return the solar equipment (or pay for its reasonable value).
- The solar company or lender must refund all payments you have made.
- Any lien placed on your home as part of the financing must be removed immediately.
- Any outstanding loan is cancelled.
Essentially, it’s a complete unwinding of the entire transaction.
When is Rescission a Possible Remedy?
You can’t rescind a contract simply because you changed your mind months later. It requires specific legal grounds, which often stem from the solar company’s failure to follow federal and state consumer protection laws.
1. Violations of the FTC “Cooling-Off” Rule
As we’ve discussed before, this federal rule gives you three business days to cancel most contracts signed in your home. The critical part is that the seller MUST provide you with two copies of a cancellation form and a copy of your contract. If they failed to provide this specific notice in the proper way, a lawyer can argue that your right to cancel was never properly terminated, opening the door to rescind the contract long after the initial three days have passed.
2. Violations of the Truth in Lending Act (TILA)
This is one of the most powerful tools for homeowners. For many types of loans that are secured by your home, TILA gives you a 3-day right of rescission. More importantly, this right can be extended for up to three years if the lender failed to provide you with certain “material disclosures,” which include:
- The correct Annual Percentage Rate (APR).
- The correct Finance Charge.
- The total amount financed.
- A clear notice of your right to rescind.
Given the prevalence of hidden dealer fees that improperly calculate the amount financed and the finance charge, many solar contracts have potential TILA violations that a homeowner is completely unaware of.
3. Demonstrable Fraud or Material Misrepresentation
This is a broader legal argument. If you can prove that you were intentionally and significantly lied to about a core aspect of the contract, a court may grant rescission as a remedy for the fraud. This goes beyond a simple misunderstanding. It requires showing that the company knowingly made false statements that were central to your decision to sign the contract—for example, lying about you owning the system when it’s actually a lease, or fabricating claims about non-existent government rebates.
Rescission vs. Suing for Damages
It’s important to understand the difference between these two legal paths. When you sue for damages, you are keeping the system but seeking financial compensation for the harm you’ve suffered (e.g., the cost of repairs, the value of lost energy production). When you are seeking rescission, you are trying to undo the entire deal. A qualified attorney can advise you on the best strategy for your specific situation.
Is Rescission Right for You?
Determining if you have a valid claim to rescind your contract requires a forensic analysis of your sales and financing documents. At SolarDispute.com, our expert case review specializes in identifying these specific TILA and FTC rule violations. We build the evidence file that an attorney needs to evaluate if pursuing rescission is a viable and powerful strategy for your case.