Texas SB 1036: The Residential Solar Retailer Regulatory Act
What Texas Homeowners Need to Know About the 5-Business-Day Cancellation Right, Required Contract Disclosures, and the New TDLR Registration Rules.
In June 2025, the Texas Legislature passed Senate Bill 1036 — the Residential Solar Retailer Regulatory Act. The law creates Chapter 1806 of the Texas Occupations Code and is the most significant consumer protection law for Texas solar buyers and lessees in the state’s history. Parts of the law took effect on September 1, 2025. Additional requirements, including mandatory TDLR registration for residential solar retailers and salespersons, take effect on September 1, 2026.
If you signed a Texas residential solar contract on or after September 1, 2025, SB 1036 may give you cancellation rights and disclosure protections that did not exist under Texas law before. If your contract was signed before that date, you may still have protections under the Texas Deceptive Trade Practices Act (DTPA), the Home Solicitation Transactions Act, and the federal Truth in Lending Act. The information on this page is general only — a qualified Texas-licensed attorney is the appropriate person to review whether any of these laws apply to your specific contract.
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What Is Texas SB 1036?
Senate Bill 1036 was introduced by State Senator Judith Zaffirini and passed by the 89th Texas Legislature on June 20, 2025. The law became effective without Governor Abbott’s signature when the deadline to sign or veto expired. SB 1036 codifies a new Chapter 1806 in the Texas Occupations Code titled the Residential Solar Retailer Regulatory Act, abbreviated RSRRA.
The law was passed in response to a documented surge in solar-related consumer complaints. According to the Texas Office of the Attorney General, solar panel complaints rose from 154 in 2020 to 696 in 2024 — an increase of more than 350 percent. The Better Business Bureau saw similar growth, with solar-related complaints climbing from 166 in 2019 to 1,069 in 2024. Senator Zaffirini stated in public remarks that the law was designed to address tactics that disproportionately harmed elderly and non-English-speaking Texans.
At a high level, SB 1036 does three things. First, it gives Texas homeowners a five-business-day right to cancel a residential solar sale or lease agreement without penalty. Second, it requires specific disclosures and contract provisions in every residential solar agreement signed on or after September 1, 2025. Third, beginning September 1, 2026, it requires every residential solar retailer and solar salesperson in Texas to be registered with the Texas Department of Licensing and Regulation (TDLR), with civil and administrative penalties for non-compliance.
Who is covered by SB 1036?
SB 1036 applies to the sale or lease of a residential solar energy system that is installed at a person’s residence in Texas. This includes solar panels and solar shingles. The law also covers the contract terms and the conduct of the retailer and salesperson, regardless of whether the homeowner financed the system, leased it, or signed a Power Purchase Agreement (PPA).
The following are exempt from SB 1036 and are NOT regulated under the RSRRA, although the installation of those systems may be regulated separately by TDLR through electrical contractor licensing:
- Solar systems installed on multifamily buildings with four or more dwelling units or four or more stories.
- Systems installed on nonresidential property.
- Systems intended only for temporary or emergency use.
- Systems intended to power only a single appliance.
- Small systems that generate less than one kilowatt of peak output power in the aggregate.
IMPORTANT: SB 1036 IS NOT RETROACTIVE
SB 1036 applies only to residential solar sale or lease agreements signed on or after September 1, 2025. Contracts signed before that date are not covered by SB 1036’s five-day cancellation right or its contract-disclosure requirements.
However, contracts signed before September 1, 2025 may still be reviewable under other Texas and federal laws — including the Texas DTPA, the Home Solicitation Transactions Act, and the federal Truth in Lending Act. A qualified attorney may review which laws apply to a homeowner’s specific contract based on the date and the facts of the sale.
The Five-Business-Day Cancellation Right
The cornerstone of SB 1036 is the right of a buyer or lessee to cancel a residential solar contract without penalty or further obligation, provided the homeowner gives written notice of cancellation on or before the fifth business day after the date the agreement was executed. This is codified in Texas Occupations Code §1806.156.
Five business days is longer than the three-day cancellation window that applies under the federal Cooling-Off Rule for door-to-door sales (16 CFR Part 429), and longer than the three-business-day cancellation period under the Texas Home Solicitation Transactions Act (Business and Commerce Code Chapter 601). For Texas solar contracts signed on or after September 1, 2025, the SB 1036 five-day right is the more protective rule and typically applies regardless of how the sale occurred.
How the cancellation address requirement protects homeowners
SB 1036 requires that every covered solar agreement contain two specific disclosures regarding cancellation:
- The last calendar date of the cancellation period (so the homeowner does not have to calculate the deadline themselves).
- A mailing address or e-mail address where the homeowner can send the notice of cancellation.
This is a critical protection. Under §1806.156, if the agreement does NOT contain the required cancellation address, the buyer or lessee may cancel the agreement by providing written notice to the solar retailer by any reasonable method. In effect, a missing cancellation address may extend the homeowner’s cancellation window beyond the five-business-day default. A qualified attorney may review whether a specific contract included the required address and, if not, what cancellation options may still be available.
Required contract provisions under §1806.155
Beyond the cancellation language, SB 1036 requires that every residential solar sale or lease agreement contain several specific provisions when the contract involves installation at the homeowner’s residence. Under §1806.155, the agreement must:
- Provide that the installation of the system will be performed by a licensed electrical contractor.
- Conspicuously state the name and license number of the electrical contractor performing the installation. A list of approved contractors from which the homeowner selects one is acceptable.
- Provide that the solar retailer or electrical contractor will obtain any permit required by a government entity for the installation.
- Provide that the retailer or contractor will obtain the electric utility’s approval of the interconnection of the solar system, where applicable under Texas Utilities Code §39.554 or §39.916.
- If the homeowner is a customer of an electric cooperative or a municipally owned utility (such as Austin Energy or CPS Energy), provide that the cooperative’s or utility’s approval of the interconnection will be obtained.
The third-party lender cancellation clause
One of the most significant homeowner protections in SB 1036 is the third-party lender cancellation requirement. If a residential solar agreement involves a third-party lender that is affiliated with the solar retailer or referred by the solar retailer, the agreement must include a provision that requires the third-party lender to cancel any accompanying loan made to the buyer or lessee upon cancellation of the solar agreement.
In practice, this addresses a long-standing problem in the Texas solar industry. Homeowners who cancelled a solar contract in the past sometimes discovered that the financing loan — made by a separate lender like GoodLeap, Mosaic, Sunlight Financial, or Service Finance Company — remained in place even though the underlying solar contract was cancelled. The homeowner was then left paying on a loan for equipment they no longer had a contract to receive. SB 1036’s third-party lender cancellation clause is designed to prevent that outcome going forward.
A qualified attorney may review a homeowner’s contract to determine whether the third-party lender clause is present, whether it is enforceable as written, and how cancellation of the solar agreement may affect any associated loan.
Was your contract signed on or after September 1, 2025?
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TDLR Registration: What Changes on September 1, 2026
SB 1036 is being implemented in two phases. Phase one — the contract provisions and the five-day cancellation right — took effect on September 1, 2025. Phase two takes effect on September 1, 2026, when registration with TDLR becomes mandatory for every residential solar retailer and solar salesperson in Texas.
Beginning September 1, 2026, a person or company may not conduct sales or leases of residential solar panels or residential solar energy systems in Texas without being registered with TDLR. TDLR is preparing the licensing applications and is in the process of adopting administrative rules that will be in place no later than June 1, 2026. As of the publication date of this page, TDLR has issued proposed rule changes in the Texas Register and is collecting stakeholder feedback through a workgroup that includes solar retailers, salespersons, electrical contractors, and consumer protection advocates.
Prohibited acts under §1806.201 (effective September 1, 2026)
- Stating or implying that the retailer is affiliated with a public utility or government agency when no such affiliation exists.
- Attempting to sell a system at a residence that has a posted ‘No Soliciting’ sign, unless the retailer is invited by the occupant of the residence.
- Other deceptive and misleading practices that TDLR may identify through its rulemaking process before June 1, 2026.
How to check whether a Texas solar retailer is registered
Beginning September 1, 2026, Texas homeowners will be able to verify whether a residential solar retailer or salesperson is registered with TDLR by using TDLR’s License Search tool at tdlr.texas.gov. If a Texas homeowner is approached by a solar retailer or salesperson who is not registered after September 1, 2026, that lack of registration may itself be a basis for review by a qualified attorney — both under SB 1036 and under the Texas DTPA’s prohibition on misrepresenting authority to do business.
How SB 1036 Interacts With Other Texas and Federal Laws
SB 1036 does not replace existing Texas or federal consumer protection laws — it adds to them. Texas Occupations Code §1806.103 specifically provides that solar retailers must continue to comply with all other state and federal laws. For a Texas homeowner reviewing whether a contract may be cancellable, the relevant body of law typically includes some combination of the following:
Law
SB 1036 / Texas Occupations Code Chapter 1806
Texas DTPA — Bus. & Com. Code §17.46(b), §17.50
Home Solicitation Transactions Act — Bus. & Com. Code Chapter 601
Truth in Lending Act (TILA) — 15 U.S.C. §1601 et seq.
FTC Cooling-Off Rule — 16 CFR Part 429
Bus. & Com. Code Chapter 115
What it covers
Five-business-day cancellation right. Required contract provisions. TDLR registration (Sept 1, 2026). Civil penalties up to $100,000 (enhanced for victims 65+).
Prohibits false, misleading, or deceptive acts and practices. Allows actual damages plus up to three times damages for knowing violations, plus attorney's fees. Requires a 60-day pre-suit notice under §17.505.
Three-business-day right to cancel home solicitation sales. Seller must provide written cancellation notice. Failure to do so can extend the cancellation period.
Federal. Requires lenders to disclose APR, finance charges, and payment terms. For certain home-secured loans, provides a three-day right of rescission.
Federal. Three-day cancellation right for door-to-door sales of $25 or more. Generally less protective than SB 1036's five-day right for Texas solar contracts signed on or after Sept. 1, 2025.
Sales and leasing of distributed renewable generation. SB 1036 expressly preserves this law as a parallel framework.
Texas Solar Cancellation does not interpret these laws. We collect and organize a homeowner’s contract documents, and that documentation may be reviewed by attorneys during the intake review process. The attorney determines which combination of laws may apply to a specific Texas homeowner’s situation.
What to Do if You Think SB 1036 May Apply to Your Contract
The five-business-day cancellation window under SB 1036 is short. If a Texas homeowner believes the window is still open — meaning the contract was signed within the past five business days, or the contract did not contain the required cancellation address — the homeowner generally does not need legal assistance to cancel directly. The homeowner can send written notice of cancellation to the address specified in the contract.
If the contract did not include the required cancellation address, the homeowner may cancel by any reasonable written method under §1806.156. Even in that case, it is generally a good idea to send the cancellation notice by a method that creates a record — such as certified mail with return receipt, or e-mail to a documented address — so the homeowner has proof of the cancellation date.
If the five-day window has passed
If the SB 1036 five-business-day window has expired, cancellation generally requires a legal basis under one or more of the other Texas or federal laws described above. The most common bases for review after the five-day window include:
- Misrepresentations at the point of sale (savings claims, federal tax credit claims, system performance claims, etc.) — potentially reviewable under the Texas DTPA.
- Missing or defective contract disclosures — potentially reviewable under SB 1036 §1806.155 itself, as well as the Texas DTPA.
- Federal Truth in Lending Act disclosure violations on financed transactions.
- Door-to-door sales conducted without compliance with the Home Solicitation Transactions Act.
- Non-performance of the solar system after installation — potentially reviewable as a breach of contract or warranty issue.
A qualified Texas-licensed attorney is the appropriate person to evaluate which, if any, of these grounds may apply to a Texas homeowner’s specific situation. Texas Solar Cancellation provides intake support to help organize the homeowner’s documentation for that review.
IMPORTANT: DO NOT STOP MAKING PAYMENTS WITHOUT LEGAL ADVICE
Texas homeowners sometimes assume that submitting an intake review, or sending a cancellation notice under SB 1036, gives them permission to stop making payments on a solar lease, loan, or PPA. That is not the case.
Continuing to make payments is generally the safest course of action until a qualified Texas-licensed attorney has reviewed the contract and provided specific advice. Stopping payments without legal advice may result in default, damage to credit, collections, or other consequences that could complicate the case the homeowner is trying to bring. The law firm engaged by the homeowner — not Texas Solar Cancellation — is the only party who can advise on payment decisions specific to the homeowner’s situation.
How Texas Solar Cancellation Supports the Process
Texas Solar Cancellation is a marketing and intake service focused exclusively on Texas residential solar contract matters. We are not a law firm, and we do not provide legal advice. Our role is to collect and organize Texas homeowners’ contract documentation and connect qualifying homeowners with lawyers who handle Texas solar contract cancellation matters.
The intake process is straightforward:
The legal review is performed by attorneys. Any attorney-client relationship is between the homeowner and the law firm — not with Texas Solar Cancellation.
Frequently Asked Questions About Texas SB 1036
The questions below come up most often during Texas homeowner intakes related to SB 1036. They are general information only — they are not legal advice. A qualified Texas-licensed attorney is the appropriate person to evaluate how SB 1036 may apply to a specific contract.
When did Texas SB 1036 take effect?
SB 1036 was passed by the 89th Texas Legislature on June 20, 2025. The contract-disclosure and five-business-day cancellation provisions took effect on September 1, 2025. The mandatory TDLR registration requirements for residential solar retailers and salespersons take effect on September 1, 2026.
Does SB 1036 apply to a solar contract signed before September 1, 2025?
No. SB 1036 is not retroactive. Its provisions apply only to residential solar sale or lease agreements signed on or after September 1, 2025. Texas homeowners with contracts signed before that date may still have protections under the Texas Deceptive Trade Practices Act, the Home Solicitation Transactions Act, and the federal Truth in Lending Act. A qualified attorney may review which laws apply to a specific contract.
How long do I have to cancel a residential solar contract in Texas under SB 1036?
Five business days after the date the agreement was executed by the buyer or lessee. This is longer than the federal three-day Cooling-Off Rule and longer than the Texas Home Solicitation Transactions Act’s three-day cancellation window. The five-day clock starts when the homeowner signs.
What happens if my contract didn't include the cancellation address?
Under §1806.156, if the agreement does not contain the required cancellation mailing address or e-mail address, the buyer or lessee may cancel by providing written notice to the solar retailer by any reasonable method. In effect, a missing cancellation address may extend the homeowner’s cancellation window beyond the five-day default. A qualified attorney may review whether a specific contract complied with this requirement.
Does SB 1036 cancel my solar loan if I cancel the solar contract?
If the loan was made by a third-party lender that is affiliated with or referred by the solar retailer, the SB 1036-required contract language obligates that lender to cancel the loan upon cancellation of the solar agreement. The enforceability and application of this clause in any specific case is a question for a qualified attorney to evaluate based on the contract’s actual language and the loan’s structure.
What is TDLR registration and when does it become mandatory?
TDLR is the Texas Department of Licensing and Regulation. Beginning September 1, 2026, every residential solar retailer and solar salesperson conducting business in Texas must be registered with TDLR. TDLR is in the process of finalizing the program rules, which must be in place by June 1, 2026. After September 1, 2026, Texas homeowners will be able to verify whether a retailer or salesperson is registered using TDLR’s License Search tool.
Are there penalties under SB 1036?
Yes. Beginning September 1, 2026, SB 1036 authorizes civil and administrative penalties for violations of the Act. Penalties can reach up to $100,000 in severe cases. The law specifically provides enhanced penalties when the victim of a violation is 65 years of age or older. Penalties are administered by TDLR through the rules being finalized for June 1, 2026.
Does SB 1036 apply to my apartment building's solar system or my commercial solar system?
No. SB 1036 specifically exempts systems installed on multifamily buildings with four or more dwelling units or four or more stories, systems on nonresidential property, temporary or emergency-use systems, single-appliance systems, and small systems under one kilowatt of peak output. The Act is designed for residential single-family installations.
Does SB 1036 require my solar installer to be a licensed electrical contractor?
Yes. SB 1036 §1806.155 requires that the residential solar agreement provide that the installation will be performed by a licensed electrical contractor, and that the contract conspicuously state the contractor’s name and license number. If a Texas homeowner’s contract does not contain that information, a qualified attorney may review whether the contract met the requirements of §1806.155.
Can I cancel under SB 1036 if I bought my system with cash?
SB 1036’s five-day cancellation right applies to the sale or lease of a residential solar energy system, which generally includes cash purchases of a residential solar system. The application of the law to any specific cash-purchase contract is a question a qualified attorney can address based on the documentation.
What if my solar salesperson said they were affiliated with my utility company or the government?
Beginning September 1, 2026, §1806.201 will expressly prohibit a residential solar retailer or salesperson from stating or implying an affiliation with a public utility or government agency when none exists. Conduct of that kind may also be reviewable under the Texas DTPA, regardless of when the sale occurred. A qualified attorney may review whether specific statements at the point of sale may have violated either law.
How do I file a complaint with TDLR about a Texas solar retailer?
TDLR accepts complaints through its online portal at tdlr.texas.gov/complaints/. Filing a TDLR complaint is separate from any potential private legal action under the DTPA or other laws. A qualified attorney may advise on whether filing a TDLR complaint is appropriate in a specific case and how it may interact with other legal options.
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