What happens if you stop
paying for solar?

The short answer

Stopping payments does not cancel a solar loan, lease, or power purchase agreement (PPA). The contract stays in place, and the balance keeps growing with fees and interest. The exact consequences depend on your contract and your state, but they usually build in stages.

This guide is general information, not legal advice. If you are thinking about stopping payments, talk to a consumer protection attorney first.

Late fees and your credit report

Your contract may charge a late fee once a payment is past due. Look for the late charge section in your loan agreement or lease to see the amount and when it applies.

Late payments can also be reported to the credit reporting companies. Under federal law, a financial institution that reports negative information, such as late payments or a default, must send you a written notice before it reports or within 30 days after. The CFPB says most negative information can stay on your credit report for seven years.

Credit damage has real costs for homeowners. It can make it harder to refinance your mortgage, qualify for other credit, or get a good rate, right when you may need those options most.

If a late payment is reported that you believe is wrong, for example because you canceled on time, you can dispute it. See solar company sent me to collections for how credit disputes work.

Default: what your contract allows

Every solar loan, lease, and PPA has a section on default. It says what counts as default and what the company can do next. Read it before you make any decision. Look for:

• What triggers default. How many missed payments, and whether there is a grace period.
• Demand for the full balance. Whether the company can demand everything owed, not just the missed payments.
• Fees and costs. Whether you would owe collection costs, attorney’s fees, or extra interest.
• Removal or repossession. Whether the company can take the equipment back, and who pays for roof repairs.
• For leases and PPAs. Whether the company can end the agreement and charge a termination amount.

If your agreement is a lease or PPA, the company owns the panels. If it is a loan, you own them, but the lender may hold a security interest. Not sure which you have? See lease vs. PPA vs. loan.

Before you change anything you pay

Whatever is driving the decision, get the facts in front of you first. This takes an afternoon, and it can save you years of trouble.

1. Get your full paperwork. Ask the servicer in writing for a copy of your signed contract and your payment history.
2. Read three sections. Late charges, default, and termination or removal. Write down what each says in your own words.
3. Look for the Holder Rule notice in your loan agreement. It is explained in the misled section below.
4. Check your credit reports to see how the account is being reported today.
5. Search your county records for a UCC-1 fixture filing in the company’s name.
6. Name your goal. A lower payment, a cancellation, a refund, or getting out entirely each point to a different path.
7. Talk to an attorney before you miss any payment on purpose.

Our document checklist lists what to gather, and the solar options check can help you sort your situation.

UCC filings, liens, and repossession

Many solar lenders and leasing companies record a UCC-1 fixture filing in your county land records. It gives public notice that the company claims an interest in the panels. The CFPB’s 2024 solar financing report says lenders commonly file these liens, and cited a finding that a UCC lien is technically not on the property but can muddy the title. When you refinance or sell, the lien may need to be released or subordinated. Read more in solar UCC-1 filings and selling your home.

What a filing can mean if you stop paying:

• Repossession of the panels. The CFPB notes that with secured solar loans, the lender has the right to repossess the panels for nonpayment.
• Removal rules. Under the Uniform Commercial Code, which each state adopts in its own version, a secured party whose fixture interest ranks first may remove the collateral after default. It must pay to repair physical damage from the removal, but not for any loss in your home’s value.
• PACE financing is different. If your solar was financed through PACE, it is tied to your property taxes. The Treasury Department says a PACE lien takes priority over your mortgage, and that default or foreclosure could follow from not paying.

A removal can leave you with roof work, no solar, and possibly a remaining balance. Ask your servicer what it would do in a default, and get the answer in writing.

Collections and lawsuits

If payments stay unpaid, the account may be sent to a collection agency or sold to a debt buyer. Collectors must follow federal rules, including sending a validation notice and pausing collection if you dispute in writing within 30 days. See solar company sent me to collections.

The company or collector may also sue. If you are sued, the CFPB says:

• Respond by the deadline in the court papers, yourself or through a lawyer. Responding does not mean you admit the debt.
• If you do not respond, the court may enter a default judgment, which can include the amount claimed plus allowed fees, interest, and costs.
• A judgment may let the creditor garnish wages, place a lien on property, or freeze funds in a bank account, depending on your state.

Court deadlines can be short. Get legal help as soon as you receive papers, and keep every letter, notice, and envelope you receive, because dates on them can matter.

Why stopping payments is a risky strategy

Some homeowners stop paying to get the company’s attention. It may get attention, but often not the kind that helps.

• It shifts the story. Your complaint is that you were misled. Once you stop paying, the company can point to your default instead.
• It adds costs. Late fees, interest, and collection costs can grow the balance you are trying to fight.
• It can hurt you later. Credit damage can follow you for years and can make a refinance or home sale harder.
• It does not end the contract. Even a removed system can leave a balance.
• It can limit settlement options. A homeowner who is current, organized, and documented usually has more choices.

If someone, including an exit company, tells you to stop paying, ask a licensed attorney in your state first. Read do you need a solar lawyer for red flags in exit services.

If you truly cannot afford the payment

If the problem is money, not a dispute, call your servicer before you miss a payment, not after.

1. Find your servicer. The company you pay may not be the company you signed with. See who services my solar loan.
2. Check for a payment jump. Many solar loans raise the payment if you did not make a large prepayment, often from a tax credit. The CFPB flagged this in its 2024 report. See how to get out of a solar loan and the solar tax credit and your loan.
3. Ask about hardship options. Ask whether the servicer offers a deferral, a temporary reduced payment, a changed due date, or a re-amortization. Ask what each does to your interest, term, and credit report.
4. Get it in writing. Do not rely on a phone promise. Ask for the terms by email or letter before you change what you pay.
5. Keep paying what you can, on time, while you wait for an answer, unless the servicer confirms in writing that a payment is paused.

Nonprofit legal services can help if you are struggling. The Treasury Department points to lsc.gov and lawhelp.org to find them.

If you were misled, do this instead

If you are tempted to stop paying because the deal itself was wrong, there are better levers than default.

• Document what you were told. Write down the promises about savings, tax credits, or payments, who made them, and when. Save ads, texts, and proposals. Read misled by a solar salesperson.
• Dispute in writing while you keep paying. Send a written complaint to the seller and the lender or leasing company. Say you are continuing to pay while you dispute the contract.
• Know the Holder Rule. Under an FTC rule, many consumer credit contracts used to finance a sale must include a notice that any holder of the contract is subject to the claims and defenses you could raise against the seller. Recovery under that notice is capped at what you have paid. Check your loan agreement for this notice.
• File complaints. Your state attorney general, the FTC at ReportFraud.ftc.gov, and the CFPB for loans, online or at 1-855-411-2372. See our complaint guide.
• Check your dealer fee. A large hidden markup in the loan balance can be part of the story. Try our dealer fee calculator.
• Talk to a lawyer. An attorney can tell you whether your facts support cancellation, a settlement, or a claim, and whether any change in payments makes sense in your situation.

Want a second look? Tell us what happened, and you decide what happens next.

Related guides

• How to get out of a solar loan
• Solar lease exit guide
• Solar debt in collections
• Solar UCC-1 filings and selling
• Who services my solar loan