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Why You Shouldn’t Stop Paying Your Solar Loan Without a Legal Strategy
If you’re stuck in a bad solar panel loan, you might be wondering: Why don’t I just stop making payments? It’s a common question that homeowners ask, especially if the solar company that sold them the system has gone out of business or failed to deliver on its promises.
At first, refusing to pay may seem like a simple solution. After all, if the company that sold you the solar system is no longer around, who’s going to enforce the agreement? But before you decide to stop paying, it’s important to understand the hidden consequences that could come back to haunt you.
What Happens If You Stop Paying?
One reason some homeowners consider stopping their loan payments is the assumption that lenders won’t take immediate action. And in many cases, this is true—lenders often won’t sue you right away. That’s because it can cost them around $7,000 to initiate arbitration, and most lenders aren’t eager to spend that money immediately.
However, that doesn’t mean you’re in the clear. Here’s what really happens when you stop paying:
The lender waits for the right moment – Instead of immediately taking legal action, lenders often take a passive approach, lying in wait for a critical event: the sale of your home.
Your home sale triggers the UCC lien – If you financed your solar panels, there’s a high likelihood that the lender has placed a UCC-1 lien on your solar system. This is a legal claim against the solar panels, meaning you cannot sell your home without addressing the debt.
The lender gets paid in full at closing – When you sell your home, the title company will uncover the lien in the closing process. In most cases, the lender will demand full repayment—including principal, interest, and fees—before the lien can be released.
You lose negotiating power – Because you’re forced to clear the lien before completing the home sale, you’re in a weak position to negotiate a settlement. The lender essentially has all the leverage, and you may end up paying the full amount whether you like it or not.
What Should You Do Instead?
Instead of simply quitting payments and hoping for the best, homeowners should take proactive steps to challenge the validity of their solar loan. If your solar system was misrepresented to you, or if your lender is enforcing a contract that was based on false promises, you may have legal grounds to fight the debt rather than simply stop paying.
Here’s what you should consider:
Legal Action Against the Lender – Under federal law, lenders can be held responsible for fraudulent or deceptive sales practices by the solar companies they finance. Many homeowners are suing their lenders to cancel their contracts, rather than waiting until they sell their home and face an unavoidable payout.
Challenging the UCC Lien – If your lender has placed a lien on your solar panels, there may be legal ways to challenge or remove it, particularly if the original contract was based on misrepresentation.
Seeking Legal Guidance – Every case is different, so it’s critical to speak with an attorney who understands solar panel financing disputes and consumer protection laws.
Conclusion
While stopping your payments might seem like an easy way out of a bad solar loan, it’s actually a short-term solution that leads to long-term headaches. Instead of setting yourself up for an unpleasant surprise when selling your home, consider taking legal action now to protect your rights and challenge an unfair loan agreement.
If you believe you were misled by a solar company or lender, we can help. Contact us today to explore your options and take control of your financial future.
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The Law Firm Solely Focused on Solar Panel Lawsuits
Neal Prevost, Trial Attorney With 31 Years of Experience
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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.