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What If I Used the Tax Rebate to Pay Down My Solar Loan?
A common question many homeowners ask when dealing with solar panel loans is, "What happens if I used my tax rebate to pay down my loan?" This scenario is particularly relevant for those looking to cancel their solar loan due to misrepresentations or breaches of contract by the solar installer. Let’s break it down and explain why pursuing a legal remedy can still work in your favor.
Understanding Tax Rebates and Solar Loans
When you install solar panels, you’re often eligible for a federal tax credit—an incentive meant to reduce the overall cost of your solar system. Many homeowners use this rebate to make a lump-sum payment toward their solar loan. While this seems like a practical decision at the time, complications can arise if the solar company later fails to fulfill its obligations, such as honoring warranties or completing installations.
Homeowners often worry that having paid a significant portion of their loan through the tax rebate might limit their ability to seek refunds or loan cancellations. However, the good news is that legal options are available to recover those payments.
What Does the Holder Rule Say?
The short answer is yes. When you sue for rescission of your solar loan contract, the goal is to restore you to the financial position you were in before entering into the agreement. If your legal claim is successful, the lender is required to:
Refund all payments you’ve made toward the loan, including any lump-sum payments made using your tax rebate.
Cancel the remaining balance of the loan.
This means that even if you’ve paid down a substantial portion of your loan, you’re still entitled to seek a full refund and loan cancellation.
Real-Life Example: A Success Story
To illustrate this point, consider the case of one of our clients in Nevada. This homeowner used their federal tax credit to pay off $23,000 of their solar loan. Later, they discovered that the solar company had gone out of business, leaving them with a loan for an incomplete and problematic system. By pursuing legal action, we were able to recover the $23,000 they had already paid and cancel the rest of the loan. This case highlights why it’s worth pursuing your legal rights, even if you’ve paid a significant chunk of your loan.
Why It’s Important to Act
If you’ve used your tax rebate to pay down your solar loan but now find yourself in a dispute over the system, don’t hesitate to seek legal advice. Misrepresentations by solar companies or breaches of contract often give rise to actionable claims under consumer protection laws. In many cases, lenders can also be held accountable under the Federal Trade Commission’s Holder Rule, which allows you to assert the same claims against the lender that you could against the solar company.
What’s the Next Step?
If you’re in this situation, consult with an experienced attorney who specializes in solar panel disputes. They can evaluate your case, guide you through the process of filing a lawsuit, and help you recover the money you’ve already paid. Remember, the sooner you act, the better your chances of achieving a favorable outcome.
Final Thoughts
Using your tax rebate to pay down your solar loan doesn’t disqualify you from seeking a refund or loan cancellation. Even if you’ve paid off a substantial portion of the loan, you still have legal options to recover your money and cancel the remaining balance. Cases like these are common, and many homeowners have successfully reclaimed their investments with the right legal assistance.
If you’re facing issues with your solar loan, don’t let past payments hold you back. Reach out to a legal professional to explore your options and protect your rights.
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What clients are saying
"Took Care of Everything"
I felt completely stuck when Encor went out of business, leaving me with an unfinished solar system that didn’t work, failed inspections, and a loan I still had to pay. On top of that, they misled me about tax credits and savings, and I ended up paying more in taxes and insurance instead. Prevost Law Firm stepped in and took care of everything. Their team handled my case with professionalism and compassion, and I’m so grateful for the outcome. If you're struggling with solar issues, you need to call them. (Cara J.)
"Exceeded My Expectations"
My experience with Encor Solar was a disaster. They installed a system that didn’t work, used an unlicensed subcontractor, voided my roof warranty, and lied about the need for batteries during power outages. When they went out of business, they left me with an unfinished system and no way to fix the mess they created. Prevost Law Firm was amazing—taking on my case and delivering results that exceeded my expectations. They are true advocates for homeowners, and I’m so grateful for their help. If you're facing a similar situation, I can’t recommend them enough! (John S.)
"Pleasure To Work With"
Would recommend 100%. Neal and his staff did an excellent job keeping me informed about the process every step of the way. He was able to get a settlement. He was a pleasure to deal with. (Gabrielle S.)
"Communicated Each Stage Clearly"
Working directly with Mr. Prevost was excellent. Having worked with several attorneys in several fields regarding general real estate matters, I was very pleased with my specific niche case against UCC-1 filings regarding solar liens. Mr. Prevost knew exactly how things would play out in handling the matter and communicated each stage clearly with me as to what I should do and what his team would need from me in the process. (Cody McDonald)
"Changed Our Lives
We can’t thank Prevost Law Firm enough for what they’ve done for us. My wife and I felt utterly defeated and trapped by the $73,590 loan for a solar panel system that never even worked. Encor, the installer, went out of business before the system passed inspection, but Solar Mosaic still demanded we pay for it. As disabled homeowners, we felt taken advantage of and didn’t know where to turn.
From the first phone call, their team made us feel like we weren’t alone in this fight. They listened to our story, fought tirelessly on our behalf, and never gave up until they got results. Thanks to them, our $73,590 loan was completely canceled, and we were refunded every single dollar of the $28,493 we had already paid into the loan. Best of all, we got to keep the solar panels for free!
When we got the news, we were overwhelmed with relief and gratitude. My stroke has already made life challenging enough, and this financial nightmare had only added more stress. Now, thanks to Prevost Law Firm, we can breathe again and finally focus on getting the panels working for us.
To anyone dealing with a solar panel loan disaster: don’t wait—call Prevost Law Firm. They are incredible, and they truly fight for people like us. We are so grateful we found them, and we hope others in similar situations will reach out for their help.
Bart and Diana Daniels
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Nothing herein is intended, and does not, create an attorney client relationship and is for informational purposes only. The Prevost law firm is licensed in Texas and is licensed to practice law in all Texas state courts and in multiple Federal Courts and Arbitration in 46 states. Solar sales are governed by both state and federal law. The attorney client relationship will only be created after the parties enter into a signed letter of representation.