Sue Solar Company: Can I Sue for Damages in a Solar Panel Lawsuit?

One of the most frequently asked questions we receive from homeowners dealing with problematic solar panel installations and considering whether or not to sue solar company is: “Can I sue for damages?”

If your home has suffered damage due to a faulty solar panel installation—such as roof leaks, interior water damage, or electrical issues—you may be wondering if legal action can help recover those costs. The answer depends on who you’re suing and the nature of your case.

The solar industry has expanded rapidly in recent years, but with its growth has come a surge of deceptive trade practices, unfair contracts, and aggressive sales tactics. Many solar panel companies and solar installers promise lower energy bills, government tax credits, and long-term energy savings, only to trap homeowners in costly monthly payments and confusing long-term contracts.

Across the United States, regulators like the Federal Trade Commission, state offices of the attorney general, and even federal courts are stepping in to curb these abuses. From Titan, to Vision Solar to Solar Mosaic and other major solar panel lenders, investigations reveal patterns of false advertising, hidden fees, and failures to obtain necessary permits for residential solar systems. 

Understanding the Legal Limitations in Solar Panel Lawsuits

When pursuing legal action against your solar panel lender, the scope of recoverable damages is somewhat limited. Under the FTC Holder Rule, which protects consumers in financed transactions, you can sue your lender for damages. However, this is only for up to the amount of money you’ve already paid into the loan, plus the total loan balance.

If you suffer additional damages—like roof leaks causing mold or electrical failures damaging appliances—you might not recover those costs fully in a lawsuit against the lender. Instead, the main legal remedy focuses on reducing or eliminating your loan obligation. This effectively credits you for the financial burden you’ve faced.

What If You Want More Than Just Loan Cancellation?

To seek damages beyond your loan balance, you would need to file a separate lawsuit against the solar panel seller or installer. This type of lawsuit could include claims for:

• Breach of Contract: If the installer failed to meet the terms of the agreement.
• Negligence: If their work caused physical damage to your home.
• Fraudulent Misrepresentation: If they misled you about the system’s capabilities, performance, or installation process.

However, one major obstacle homeowners face is that many of these solar companies have gone out of business. If your solar installer is no longer in operation, suing them may not be a viable option. This is because there would be no entity to recover damages from.

How Can a Lawsuit Against the Lender Help You?

Suing the lender may not cover your home repair costs directly. However, it can eliminate your financial obligation for a defective or misrepresented solar system. This frees up the money you would have spent on payments for the faulty system, letting you invest in the repairs you need.

When filing a legal claim against your lender, you may be able to seek:

• Cancellation of your solar loan
• Refunds of previous payments made toward the loan
• Compensation for damages—up to the amount of the loan balance
• Rectification of negative credit reporting

What Legal Protections Exist for Solar Customers?

Homeowners dealing with predatory solar panel companies are not without protection. Both federal and state laws exist to shield consumers from deceptive trade practices, false advertising, and unfair loan terms. Understanding these protections can help you determine your best legal strategy if you’ve been misled by a solar installer or lender.

Federal Protections

• FTC Holder Rule: This rule makes solar panel lenders legally responsible for the misconduct of the solar company that arranged your loan. If the installer engaged in deceptive sales practices or failed to deliver on promised performance, you may be able to cancel your loan or recover payments already made.
• Truth in Lending Act (TILA): This federal law requires lenders to disclose the true cost of financing, including interest rates and fees. If your solar panel contract hid the actual cost of financing or misrepresented terms, that could violate TILA.
• Home Ownership and Equity Protection Act (HOEPA): This law offers additional protections against predatory lending, especially for high-interest loans tied to home improvements such as residential solar systems.

State-Level Protections
Many states provide added safeguards through consumer protection laws and specific rules regulating door-to-door sales and solar installations. For example:

• In Texas, state law requires proper licensing and disclosures, and violations can lead to civil penalties or lawsuits for deceptive business practices.
• In New York and Connecticut, attorneys general have pursued enforcement actions against Sunrun Inc. and other solar panel companies for false claims, forged contracts, and failing to obtain necessary permits. Attorney General William Tong has been particularly vocal about protecting Connecticut consumers, while Attorney General Ellison in Minnesota has taken similar action against bad actors.
• The Florida Attorney General’s Office has also investigated solar lenders for unfair trade practices, emphasizing that consumer rights apply across the renewable energy industry.

What Should You Do Next?

If you believe you have a case against your lender due to a misrepresented or defective solar panel system, it’s important to act quickly. The longer you wait, the more difficult it can be to gather evidence and build a strong claim.

Steps to Take:

1. Gather Your Documentation: Collect your contract, installation records, loan statements, and any communications with the solar company.

2. Document Any Damage: Take photos and keep records of any home damage caused by the solar panels.

3. Consult with a Solar Litigation Attorney: A skilled attorney can evaluate your case and guide you on the strongest legal strategy.

At the end of the day, the promise of clean energy and lower energy costs should not come at the expense of homeowners being misled by deceptive practices. If your solar panel contract involves high-pressure sales tactics, hidden dealer fees, or misrepresented potential savings, you may have legal options. From breach of contract actions to claims of deceptive business practices, the potential outcomes range from loan cancellation to refunds and relief from negative credit reporting.

At Prevost Law Firm, protecting solar customers from unfair and misleading contracts is our top priority. If you’ve been harmed by deceptive sales practices or defective solar installations, don’t wait, seek legal assistance today to understand your rights, safeguard your finances, and hold fraudulent companies accountable.

Get a no-cost case review here.

Final Thoughts

While suing for direct damages may not always be an option in solar panel lawsuits against lenders, eliminating or reducing your loan obligation can be a significant financial relief. If you have experienced misleading sales practices, defective installation, or a non-functioning solar system, you may have legal grounds to fight back.