Cancel a Solar Loan: Rescission Windows & What Works

Disclaimer: This article is for informational purposes only and does not constitute legal advice. Solar-loan cancellation is governed by federal statutes (TILA, the FTC Cooling-Off Rule, the FTC Holder Rule), state home-solicitation acts, state UDAP statutes, and the underlying contract. Deadlines are short and unforgiving. Consult a consumer-protection attorney before stopping payment, sending a rescission letter, or signing a settlement.

Overview

Most homeowners searching for how to cancel a solar loan are not actually asking one question — they are asking five different questions packed into the same phrase. The five paths below are also the five most common solar panel scams that reach our intake: cooling-off violations, TILA disclosure failures, state-law misrepresentation, never-installed systems, and Holder Rule defenses against the lender. The salesperson is not returning calls. The system is not producing what was promised. The installer just filed for bankruptcy. The lender keeps drafting payments. Each of those situations triggers a different set of legal levers, with different deadlines and different outcomes. Saying "I want to cancel my GoodLeap loan" out loud is the easy part. Knowing which of the five paths actually applies to your facts is the part that decides whether you keep paying.

This guide separates them. It covers the federal cooling-off rule, TILA rescission, state-law possibilities, contract theories for incomplete work, and the FTC Holder Rule. None provides automatic cancellation, and the current creditor or servicer name does not determine coverage or a remedy.

If you want a structured eligibility review of your facts, our 2-minute intake routes the matter to a consumer-protection attorney in our network. We are not a law firm; the eligibility review tells you what fits your facts and connects you with counsel who handle these statutes.

"Canceling" a Solar Loan Means One of Five Different Things — Disambiguate

The first job is to figure out which "cancel" you mean. The remedies do not overlap cleanly.

1. Three-day cooling-off cancellation. A potential right to cancel certain covered in-person sales within three business days under federal or applicable state law. The window is short, and coverage and exceptions depend on the transaction. See the companion post on doorstep contracts.

2. TILA right of rescission. A federal three-business-day (or three-year, in narrow circumstances) right tied to specific kinds of consumer credit. It applies to fewer solar loans than people assume. We explain when it does and does not apply below.

3. State-law cancellation or claims. State home-solicitation, contractor, solar-disclosure, and consumer-protection rules vary. Check current law for the transaction state, including scope, notice, deadlines, remedies, and interaction with federal law.

4. Failure of consideration / contract rescission. If the installer never finished, never turned the system on, or delivered something materially different from what was sold, common-law contract doctrines may let you walk — and assert that defense against the lender, not just the installer.

5. Holder Rule defense against the lender. The cooling-off windows have closed. The installer is gone, bankrupt, or stonewalling. The FTC Holder Rule (16 CFR Part 433) may allow you to assert qualifying seller-related claims and defenses against the holder of a covered credit contract. It does not automatically cancel the loan, suspend payments, or prevent collection and credit reporting.

Two related companion posts: PPA and lease cancellations follow a different framework — see solar PPA and lease cancellation. Payment-mechanics disputes (chargebacks and ACH dispute letters) are covered in chargebacks, ACH disputes, and the Holder Rule. If you are not yet sure which contract type you signed, start with the overview of how to get out of a solar panel contract, which sorts loans, leases, PPAs, and PACE assessments by exit path.

The rest of this guide walks each lever in order.

3-Day Cooling-Off (FTC + State HSSA Equivalents)

The FTC Cooling-Off Rule, codified at 16 CFR Part 429, gives a buyer three business days to cancel certain sales of $25 or more made at the buyer's home or another covered location. Saturdays count toward the three days; Sundays and federal holidays do not. Coverage and exceptions depend on how and where the transaction occurred.

Two requirements matter:

• The seller must give you, at the time of sale, two copies of a dated cancellation notice and an oral explanation of the right to cancel.
• The notice must be in a specific format and on a specific schedule.

If the seller failed a required notice or explanation, that failure may support an argument that the cancellation period did not begin or that another remedy applies. It does not guarantee a late cancellation; the transaction, controlling law, and evidence still matter.

State HSSAs typically mirror or extend the federal rule:

• California Civil Code § 1689.5 — three-business-day right; cancellation right may be extended if the disclosures were defective. See also CSLB requirements discussed below.
• New York Personal Property Law § 425 — three-business-day cancellation right for door-to-door sales over $25.
• Washington (RCW 19.95) — three-day right; contractor must release any recorded lien within 20 days of cancellation.
• Colorado — adds a mandatory "welcome call" confirming key contract terms, which retriggers a fresh three-day rescission window.

If you are inside a state cooling-off window, you cancel by sending a written notice — certified mail, return receipt — that identifies the contract by date, signing location, and address, and states clearly that you are canceling under both the FTC Cooling-Off Rule and the applicable state HSSA. Email is acceptable if the contract lists an email address, but certified mail produces a stronger record.

When the cooling-off lever closes, the next question is whether TILA gives you a longer window.

TILA Right of Rescission (15 USC § 1635) — When It Applies, When It Doesn't

This is the single most misunderstood remedy in the solar-loan world. The Truth in Lending Act's right of rescission, 15 U.S.C. § 1635, implemented through Regulation Z § 1026.23, is not a general right to cancel any consumer loan. It is a narrow, powerful right that applies to a specific category of credit.

TILA rescission applies when:

• The transaction is consumer credit;
• It is secured by a security interest in the consumer's principal dwelling; and
• It is not a "residential mortgage transaction" (TILA's term for a loan used to acquire or initially construct the dwelling).

When all three conditions are met, the borrower may rescind within three business days of the latest of: (a) consummation of the transaction, (b) delivery of the material disclosures, or (c) delivery of the notice of the right to rescind. If the lender failed to deliver the required disclosures or rescission notice properly, the rescission window extends to three years from consummation.

Why this matters for solar loans: many homeowners assume any GoodLeap or Mosaic loan is rescindable under TILA. That is not correct. Most dealer-arranged solar loans are unsecured. GoodLeap, Sunlight Financial, Mosaic, Dividend Finance, Service Finance, and EnerBank typically structure their solar loans as unsecured consumer installment loans — sometimes accompanied by a UCC-1 fixture filing on the panels themselves, but not a lien on the dwelling. An unsecured loan is not subject to TILA rescission.

Where TILA rescission does come in:

• PACE financing — historically structured as a property-tax assessment with a lien on the home. The CFPB's 2024 final rule extended TILA-style requirements to PACE, and the rescission analysis is fact-specific. PACE loans are addressed in dedicated guidance because the foreclosure mechanics differ.
• Solar loans secured by a deed of trust or mortgage — uncommon but not extinct. Some HELOC-backed solar deals or older home-improvement secondary mortgages qualify.
• UCC fixture filings — whether a UCC-1 on the panels constitutes a "security interest in the principal dwelling" for TILA purposes is contested and fact-specific. Counsel should review the specific filing.

The Supreme Court clarified the mechanics of TILA rescission in Jesinoski v. Countrywide Home Loans, 574 U.S. 259 (2015): the borrower exercises the right by sending written notice within the three-year period — no lawsuit required to preserve the claim. The borrower does not have to file suit to rescind; the lender does, if it disputes.

In short: TILA rescission is real but narrower than the headline suggests. Pull your loan documents, look for a deed of trust or mortgage, and have counsel confirm before relying on this lever.

State-Law Triggers — CA, FL, TX, NY, AZ

When federal rescission is not available, state statutes carry the load. Five states with the densest solar-fraud activity:

California. Two stacks. First, the Home Solicitation Sales Act (Civ. Code § 1689.5) gives a three-business-day cancellation right. Second, the California Solar Consumer Protection Guide and Business & Professions Code § 7159 require contractors to provide specific written disclosures, including a three-day notice of cancellation. CSLB-licensed solar contractors who fail to meet § 7159's content and format requirements expose the contract to rescission and the contractor to discipline. CLRA and UCL claims provide additional UDAP-style remedies, including attorney's fees. See our California solar fraud guide for a deeper walk-through.

Florida. No HSSA-style three-day cancel right by statute, but the Florida Deceptive and Unfair Trade Practices Act (FDUTPA) is one of the broadest UDAP statutes in the country. Misrepresentation about savings, system performance, ownership of the federal tax credit, or the existence of a "government program" can support rescission, actual damages, and attorney's fees. See Florida solar fraud rights.

Texas. No general three-day cancel for in-home sales, but the Texas Deceptive Trade Practices Act (DTPA) is one of the most consumer-favorable in the country, with treble damages for knowing violations. Specific solar misrepresentations — savings projections, tax-credit eligibility, manufacturer warranties — are textbook DTPA fact patterns.

New York. Personal Property Law § 425 gives a three-business-day cancellation right for door-to-door sales over $25. General Business Law § 349 provides UDAP remedies including statutory damages and attorney's fees.

Arizona. The Arizona Consumer Fraud Act (A.R.S. § 44-1521 et seq.) reaches deceptive solar sales practices, and Arizona's Registrar of Contractors maintains a contractor recovery fund that can produce cash recovery when an installer goes under. See Arizona solar fraud guide.

Federal and state theories may overlap, conflict, preempt, supplement, or require different notices and deadlines. A qualified lawyer should identify which rules and remedies can be asserted together for the transaction.

"Cancel" Usually Means "Assert Defenses Against the Lender" — Pivot to Holder Rule

By the time most homeowners search for "cancel solar loan," the cooling-off windows have closed and TILA often does not apply. What they usually want is to challenge the payment obligation without compounding credit or collection risk. That is not necessarily a "cancellation" in the contract-formation sense. It may involve asserting claims and defenses against the lender, including under the FTC Holder Rule when the transaction and seller-related claim are covered.

In a financed solar transaction, identify the seller, installer, original creditor, current holder, servicer, disbursement events, and any assignee. The Holder Rule may preserve qualifying seller claims and defenses in specified seller-connected credit contracts; it does not make every finance company responsible for installer conduct.

Before going further, you need three documents on the table: the installation contract with the dealer; the credit contract with the lender; and any addenda or change orders. Our solar-case documents checklist lists everything an attorney needs to evaluate a Holder Rule case. Pull them now — the rest of this analysis is easier with paper in hand.

Want a structured eligibility review? Our 2-minute intake screens for the consumer-protection statutes that fit your facts (TILA § 130, the FTC Holder Rule, your state UDAP, state HSSA) and connects you with a consumer-protection attorney in our network. Use the eligibility form to route your facts through the right intake path. Start the eligibility review →

FTC Holder Rule (16 CFR § 433): Check Coverage and the Underlying Claim

The FTC Holder Rule, 16 CFR Part 433, requires that consumer credit contracts arising from a seller-arranged purchase carry a specific notice. The notice provides that the lender takes the contract subject to all claims and defenses the consumer could assert against the seller of the goods or services. In other words: the lender does not get to be a "holder in due course" insulated from the dealer's misconduct.

The required notice, in at least 10-point bold type:

NOTICE: ANY HOLDER OF THIS CONSUMER CREDIT CONTRACT IS SUBJECT TO ALL CLAIMS AND DEFENSES WHICH THE DEBTOR COULD ASSERT AGAINST THE SELLER OF GOODS OR SERVICES OBTAINED PURSUANT HERETO OR WITH THE PROCEEDS HEREOF. RECOVERY HEREUNDER BY THE DEBTOR SHALL NOT EXCEED AMOUNTS PAID BY THE DEBTOR HEREUNDER.

For a covered contract, the notice preserves qualifying seller claims and defenses against a holder, subject to the underlying law and the notice's recovery limitation. It does not prove the seller claim, establish liability, or suspend payment by itself.

Two practical consequences:

As a defense to payment. If the installer never finished or the system does not work, you may be able to assert seller-related claims or defenses against the lender. Written notice creates a record, but it does not by itself suspend the loan or prevent default consequences. Get case-specific advice before changing payments.

As a possible basis for affirmative recovery. The FTC's Holder Rule advisory opinions discuss affirmative recovery subject to the rule's limitation on recovery. Availability still depends on a covered transaction, a valid seller claim, controlling law, and the requested remedy.

Notice missing? Do not assume the rule applies or does not apply from that fact alone. Preserve the complete credit and sales contracts and have counsel analyze the transaction, the required notice, the parties' roles, and the effect of any omission under controlling law.

The Minnesota Attorney General's 2024 enforcement action alleged deceptive practices involving named solar lenders and dealer-fee structures. Those are allegations in a specific case. The filing does not establish Holder Rule coverage, liability, admissibility, damages, or a remedy for another homeowner.

Never Installed / Never Turned On (No PTO) — Failure of Consideration

A separate fact pattern arises when the system was never finished, did not receive required approvals, or did not produce. The responsible parties, contract duties, payment trigger, cause, and remedy still must be established from records.

No PTO is a project status, not automatic loan cancellation or proof of complete nonperformance. Use the solar loan payments before PTO or final inspection guide to identify the permit, inspection, interconnection, completion, funding, production, and billing records before selecting a legal theory.

These facts may support a breach, failure-of-consideration, warranty, misrepresentation, or other theory depending on the contracts and state law. Missing PTO, zero production, or incomplete work does not by itself establish the elements, excuse payment, or determine a remedy.

How this interacts with the Holder Rule:

1. The failure-of-consideration claim runs against the installer.
2. Under the Holder Rule, you assert that same claim as a defense against the lender.
3. If the lender has collected payments on a system that never operated, recovery may be available depending on the claim, contract, remedy, and Holder Rule limits.

Practical sequence:

• Document the non-operation. Photographs of incomplete work, utility correspondence showing no PTO, missing inverter installation, missing meter swap. If the system is producing zero kWh, pull your utility bills and your inverter monitoring portal.
• Written demand to the installer. Even if the installer is bankrupt or unresponsive, send a certified-mail demand identifying the breach. This becomes Exhibit A in the lender file.
• Written notice to the lender. Cite the Holder Rule. State that you are asserting failure of consideration as a defense to further payment. Demand restitution of payments to date.
• Do not rely on phone calls. Get every demand and every response in writing.

Installer bankruptcy does not decide a separate lender dispute. The lender, contract, seller claim, current holder, bankruptcy orders, and controlling law still must be identified. That analysis is covered in solar installer bankruptcy and lender liability under the Holder Rule.

Documenting the Dispute Before Changing Payments

Unilaterally stopping ACH or autopay does not resolve the loan and can trigger delinquency reporting, fees, collection, or litigation. A written dispute, agency complaint, or ACH revocation creates a record but does not itself suspend the debt or prevent accurate negative reporting. Get case-specific advice before changing the payment amount or method.

The defensive sequence:

1. Put the dispute in writing. Send a traceable letter to the lender identifying the account, facts, documents, and the claims or defenses you are asserting. Ask for a written response and keep the letter and delivery proof.

2. Separate ACH authorization from the debt. A consumer can generally revoke a recurring ACH authorization by following the authorization terms and applicable Regulation E procedures. Revocation changes the payment method; it does not cancel the debt, excuse a missed payment, or stop credit reporting. Send any revocation to the lender and bank in writing and keep proof.

3. CFPB complaint. If the issue falls within CFPB's complaint process, submit the financial company, account details, facts, attachments, and requested response. The CFPB says companies generally respond in 15 days, with some final responses taking up to 60 days. A complaint is not automatically public and does not pause payment, collection, credit reporting, arbitration, or litigation.

4. State AG and licensing-board complaints. Add a complaint to your state attorney general's consumer-protection division and, if applicable, the contractor licensing board (CSLB in California, ROC in Arizona, the state plumbing/electrical board elsewhere).

5. Consider an escrow account. Some attorneys advise depositing the disputed payments into a separate savings account so that, if the dispute resolves with payment owed, you can pay it without delinquency. This is jurisdiction-specific and counsel-driven. Do not improvise.

6. Monitor your credit. Obtain reports through AnnualCreditReport.com to establish a baseline. If information is inaccurate or incomplete, dispute the specific field with the bureau and furnisher and track the applicable response process. A written contract dispute does not require deletion of accurate negative information.

The goal is to create a documented contractual dispute rather than ignore the loan. Documentation may support later claims or defenses, but it does not require the lender to pause reporting, collection, or litigation, or to settle.

Collection pressure often intensifies once a dispute is on the record. If the calls, letters, or co-signer contacts escalate, track them separately using the guide to solar lender harassment after a dispute.

Identify the Current Creditor and Servicer

Company identity matters for notices and records, but a brand does not establish a claim. Use the company pages as starting points for public records, then verify the current account documents.

GoodLeap (formerly Loanpal). It was named in a 2024 Minnesota AG complaint alongside Sunlight, Mosaic, and Dividend. The complaint contains allegations about lender-installer relationships and dealer fees; it does not decide another transaction. Review the actual security interest, current holder, servicer, disclosures, and financing structure before asserting TILA, Holder Rule, or state-law theories.

Sunlight Financial. Verify the bankruptcy docket, plan, current owner or servicer, transfer notices, and account history. Bankruptcy does not automatically preserve or extinguish a homeowner's claim or payment obligation.

Mosaic (Solar Mosaic). It was named in the Minnesota AG complaint. Do not assume its loan structure or fee treatment matches another lender or every Mosaic account; review the specific contract and disclosures.

Dividend Finance. It was named in the Minnesota AG complaint. Ownership and institutional structure do not decide Holder Rule coverage, seller misconduct, or a remedy.

Service Finance Company. Identify its role, the seller connection, current creditor, disclosures, and account history. Do not assume its legal posture is identical to another lender.

EnerBank USA. Read the actual promotional period, interest, payment, expiration, and deferred-interest terms. The current documents control; a company-level description does not establish the terms of an individual account.

Send a factual written dispute to the designated address for the current creditor and servicer. A response directing you to the installer does not itself prove or disprove Holder Rule coverage. Preserve it and get transaction-specific advice.

Documents You Need Before Calling Anyone — Link to /solar-case-documents

Before you call a lawyer, file a CFPB complaint, or send a Holder Rule demand, get these documents into one folder. Attorneys cannot evaluate a solar-loan claim without them, and the eligibility review at solar-case-documents walks the full list. Short version:

• Installation contract with the dealer/installer. Every page, every addendum, every change order.
• Credit contract with the lender. GoodLeap, Sunlight, Mosaic, Dividend, Service Finance, EnerBank — the financing paperwork, including the TILA disclosures (the "loan estimate" or "promissory note") and the Holder Rule notice if present.
• Marketing materials and savings projections. The slide deck the salesperson showed you. Screenshots of tablet presentations. Any "savings calculator" outputs you signed off on.
• All written communications with the installer and the lender. Email threads, text messages, certified-mail receipts.
• Utility bills before and after install. The "savings" claim is tested against actual bills. Pull 12 months pre-install and as many post-install months as you have.
• Inverter monitoring portal exports. These can document reported production or alerts, but should be compared with utility, commissioning, inspection, and equipment records.
• Photographs of the installation. Every panel, every conduit, the inverter, the meter. Date-stamped.
• Permits and PTO documentation. City permit, utility interconnection agreement, Permission to Operate letter — or proof of their absence.
• Credit reports. Pulled at the start of the dispute, to baseline the credit posture before any delinquency event.
• State licensing lookups. Confirm the installer's contractor license status and any disciplinary history.

Get all of this into one folder before the first attorney call. The eligibility review goes faster, the Holder Rule demand is sharper, and the lender's "talk to the installer" deflection has nowhere to land.

If a company promises to make the loan disappear, vet the solar loan cancellation service before paying. Confirm who is actually providing legal or nonlegal work, what each fee buys, whether a licensed lawyer will handle your jurisdiction, and what the agreement says happens if the lender rejects the proposed theory.

FAQ

Can I cancel after the 3-day window?

Possibly, but there is no automatic post-deadline cancellation. A missing required notice may affect when a cancellation period began, and state law or contract defenses may provide other remedies. The FTC Holder Rule may also preserve qualifying claims and defenses against the lender without rescinding the contract. The right question is which rule, evidence, and remedy fit the transaction.

Does TILA rescission apply to my solar loan?

Probably not, unless your loan is secured by a lien on your home. TILA's right of rescission (15 U.S.C. § 1635) applies only to consumer credit transactions secured by a security interest in the principal dwelling, and only when the loan is not used to acquire the dwelling. Most solar loans from GoodLeap, Sunlight, Mosaic, Dividend, Service Finance, and EnerBank are unsecured installment loans — TILA rescission does not reach them. PACE financing and the rare HELOC- or mortgage-secured solar deal are different. Pull your loan documents and look for a deed of trust, mortgage, or recorded lien before relying on TILA. Counsel should confirm before any rescission letter is sent.

Can I cancel if the system was never turned on?

A system that was never finished, permitted, approved to operate, or producing may support a failure-of-consideration or breach claim. If the credit contract and seller-related claim are covered by the FTC Holder Rule, that claim may also be asserted against the lender. Document the non-operation with utility correspondence, permit records, photographs, and monitoring data, then send written notice to the installer and lender. Available defenses and any recovery of prior payments depend on the contract, facts, and controlling law.

What is the FTC Holder Rule and how does it help?

The FTC Holder Rule (16 CFR Part 433) requires a notice in specified seller-connected consumer credit contracts that preserves claims and defenses the debtor could assert against the seller. Coverage, the underlying seller claim, the current holder, available defenses, and any affirmative recovery require transaction-specific analysis. The lender's name alone does not establish coverage or relief.

Will canceling ruin my credit?

It can. A written dispute does not prevent a lender from reporting an accurate delinquency, and revoking ACH does not suspend the payment obligation. Preserve your records, ask the lender or servicer in writing about dispute and hardship procedures, monitor all three credit reports, and get case-specific advice before withholding payments. If information reported is inaccurate, use the credit-report dispute process for that inaccuracy.

Can I cancel a GoodLeap, Sunlight, or Mosaic loan?

The lender name does not create a guaranteed cancellation path. Cooling-off rights, TILA rescission, contract defenses, state law, and the FTC Holder Rule depend on the transaction and evidence. The companion company pages — GoodLeap, Sunlight Financial, and Mosaic — identify company-specific records and complaint channels, but a written dispute does not itself stop payments or collection.

Do I keep paying while I dispute?

There is no universal answer. A dispute letter, CFPB complaint, or ACH revocation does not suspend the contract, and nonpayment can trigger fees, collection, credit reporting, or litigation. Ask the lender or servicer in writing about available dispute or hardship procedures and get advice from a lawyer who has reviewed the contract before changing payments. For payment-method issues, see chargebacks, ACH disputes, and the Holder Rule.

What if the installer went bankrupt?

Installer bankruptcy does not automatically cancel a separate loan or establish a claim against its holder. A Holder Rule or state-law theory may exist in some transactions, but coverage and remedies depend on the contracts, seller claim, current holder, and controlling law. The full analysis is in solar installer bankruptcy and lender liability. See also solar arbitration with lenders after installer bankruptcy.

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Got blindsided by a solar deal that did not deliver?

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