Texas Solar Homeowner Rights:
A Plain-Language Guide

Texas homeowners who signed a residential solar contract are covered by several state and federal consumer protection laws. The protections differ depending on whether the contract is a lease, a loan, a power purchase agreement, or a cash purchase; whether the contract was signed door-to-door or in another setting; whether the contract is recent or older; and what was promised at the sale. This page is a plain-language summary of the major laws — what each one covers, what it does not cover, and how each may apply to a homeowner’s specific situation.

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Texas SB 1036 — The 5-Business-Day Cancellation Right
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Solar panel on a tiled roof with palm trees in a sunlit backyard, showcasing clean energy.
Texas SB 1036 was signed into law in 2025 and took effect September 1, 2025. It is codified at Texas Occupations Code Chapter 1806. For residential solar contracts signed on or after that date, SB 1036 provides:
  • A 5-business-day right to cancel without penalty
  • A requirement that the contract include the cancellation address and the last day of the cancellation period
  • Mandatory TDLR registration for residential solar retailers and salespeople, with registration enforcement beginning September 1, 2026
What “5 business days” means in practice: weekends and Texas state holidays do not count. The clock starts the day after the contract is signed. The homeowner has until 11:59 p.m. on the fifth business day to cancel.
Solar panel on a tiled roof with palm trees in a sunlit backyard, showcasing clean energy.

How the cancellation is delivered: written notice to the cancellation address in the contract. If the contract does not include the required cancellation address, the cancellation window may not have started running — a fact-specific question a qualified attorney could review.

What cancellation triggers: the contract terminates without penalty. No early termination fees. No removal costs. The solar company must remove any equipment installed during the window and restore the property to its prior condition (subject to the specific terms of the contract and SB 1036).

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Texas Deceptive Trade Practices Act (DTPA)
Practices Act (DTPA)

The Texas DTPA, codified at Business & Commerce Code §17.41 et seq., is the central Texas consumer protection law. It applies broadly to consumer transactions — including residential solar contracts of every type.

What the DTPA Prohibits

  • 17.46(b) lists specific deceptive acts. The list relevant to solar contracts includes:
  • Misrepresenting that goods or services have characteristics they do not have
  • Misrepresenting the standard, quality, or grade of goods or services
  • Misrepresenting that goods or services are of a particular standard when they are of another
  • Misrepresenting tax credits, rebates, or other government benefits (specifically called out in §17.46(b)(12))
  • Failing to disclose material information that was known at the time of the transaction and that was intended to induce the consumer into the transaction
  • Engaging in unconscionable acts — acts that take advantage of the consumer’s lack of knowledge or ability to a grossly unfair degree

DTPA Damages

17.50 allows actual damages plus, for knowing violations, up to three times actual damages. Attorney’s fees are recoverable for the prevailing party.

DTPA Procedure

17.505 requires a 60-day pre-suit notice before filing a DTPA lawsuit. The notice describes the alleged conduct and the damages claimed. The general statute of limitations is two years from the date the deceptive act occurred (some claims may accrue later under the discovery rule).

Texas Home Act Solicitation Transactions

Texas Business & Commerce Code Chapter 601 governs door-to-door sales — including solar sales pitched at the homeowner’s residence. The Act provides:
  • A 3-business-day right to cancel home solicitation sales
  • A requirement that the seller provide a written cancellation notice at the time of sale
  • If the required written cancellation notice was not provided, the cancellation period may not have started running
Important: SB 1036’s 5-business-day cancellation right and the Home Solicitation Transactions Act’s 3-business-day right are separate provisions. For door-to-door solar sales signed on or after September 1, 2025, both may apply. A qualified attorney may review which framework provides the better path in a specific situation.

The Four Types of Texas Solar Contracts
(and Why They Matter)

Cancellation rights and remedies depend on which type of contract a Texas homeowner signed. The four most common are summarized below.

Solar Lease

A solar company owns the system on the homeowner's roof. The homeowner pays a monthly lease, often with an annual escalator (around 2.9–3.5%) over 20–25 years.

Why Texas homeowners want out

Bills higher than promised. Lease blocks home sale because the buyer must qualify to assume the lease. Solar property tax exemption does not apply to leased systems under Texas Tax Code §11.27.
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Solar PPA

Power Purchase Agreement. The solar company owns the panels and the homeowner buys the electricity the panels produce at a per-kWh rate.

Why Texas homeowners want out

Texas is a deregulated electricity market (ERCOT). The PPA rate may now be higher than the homeowner's REP (Retail Electric Provider) rate, eliminating the savings.
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Cash Purchase

The homeowner paid cash up front to install the system. The homeowner owns the panels outright with no ongoing payment.

Why Texas homeowners want out

Less common reason for cancellation, but homeowners may still have DTPA claims if the system was misrepresented at sale or if installation was defective.
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Texas Solar Cancellation collects information about all four contract types during intake. The contract type determines which Texas and federal laws may apply, and an attorney may review that combination as part of the legal review.

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Federal Truth in Lending Act (TILA)

TILA is the federal consumer credit disclosure law, codified at 15 U.S.C. §1601 et seq. and implemented through Regulation Z. For financed solar transactions, TILA requires the lender to disclose:
  • Annual percentage rate (APR)
  • Finance charge — total interest and fees over the life of the loan
  • Amount financed
  • Total of payments
  • Payment schedule
  • Right to rescind, for transactions secured by the consumer’s principal dwelling
For certain home-secured solar loans (typically transactions that put a lien on the home), TILA provides a 3-business-day right to rescind. If the required TILA disclosures were not provided correctly, the rescission window may extend up to 3 years from the date the loan was consummated under 15 U.S.C. §1635(f). TILA enforcement is separate from state law. A homeowner may have both Texas DTPA claims and federal TILA claims arising from the same transaction. A qualified attorney may review which framework applies in a specific situation.

Texas Tax Code §11.27 — Solar Property Tax Exemption

Texas Tax Code §11.27 provides a 100-percent property tax exemption on the added value of an owned solar energy device installed on residential property. The exemption is among the most generous in the country and is one reason Texas residential solar deployment grew rapidly through the late 2010s and early 2020s.

Who Qualifies

  • Texas homeowners with owned solar systems — purchased outright or financed with a loan where the homeowner is the owner

Who Does NOT Qualify

  • Texas homeowners with leased solar systems — the system is owned by the lessor, not the homeowner
  • Texas homeowners with PPA contracts — same reason; the system is owned by the PPA provider

Why this matters: some Texas homeowners were sold a lease while being told they would receive the §11.27 property tax benefit. That representation may be a potential §17.46(b) disclosure issue under the Texas DTPA, since the homeowner under a lease was never eligible for the exemption.

Texas Department of Licensing and Regulation (TDLR)

TDLR has regulatory oversight over electrical contractors under Occupations Code Chapter 1305 — and, beginning September 1, 2026, oversight of residential solar retailers and salespeople under SB 1036 (Chapter 1806). TDLR maintains licensing records and accepts complaints at tdlr.texas.gov.

TDLR enforcement is separate from private legal remedies. A homeowner may file a TDLR complaint about an unlicensed installer or a registered solar retailer and may also pursue private legal remedies under the DTPA or other laws.

Texas Office of the Attorney General (OAG)

The Texas OAG Consumer Protection Division enforces the DTPA on behalf of the State of Texas. The OAG investigates patterns of consumer harm, brings civil enforcement actions, and may obtain injunctions, civil penalties, and restitution orders. The OAG does not represent individual consumers; private legal remedies are pursued separately.

In April 2026, Attorney General Paxton announced a major initiative targeting alleged solar industry fraud. Civil Investigative Demands were issued to Sunrun, Freedom Forever (dba Freedom Solar), Lone Star Solar Services, and CAM Solar. Texas homeowners can file complaints at oag.my.texas.gov. Complaint filings are independent of any private legal review.

UCC-1 Financing Statements — How They Work in Texas Solar Transactions

Solar finance companies sometimes file UCC-1 financing statements as part of a financed solar transaction. UCC-1 liens, where filed, are filed against the solar equipment — not against the homeowner’s home. The lien serves to perfect the finance company’s security interest in the equipment.

Even though the lien is on the equipment, UCC-1 filings sometimes show up during a home sale title search. The buyer’s title company or lender may require subordination or release of the UCC-1 before closing. Release of a UCC-1 generally requires resolution of the underlying obligation. UCC-1 filings are governed by Texas Business & Commerce Code Chapter 9.

Quick Reference — What Each Right Provides

Right / Law

SB 1036 (Tex. Occ. Code Ch. 1806)

Home Solicitation Transactions Act (Tex. Bus. & Com. Code Ch. 601)

TILA Right of Rescission (15 U.S.C. §1635)

Texas DTPA §17.46(b) / §17.50

Texas Tax Code §11.27

UCC Article 9 (Tex. Bus. & Com. Code Ch. 9)

Tex. Occ. Code Ch. 1305 (TDLR)

What It Provides

5-business-day cancellation without penalty

3-business-day cancellation; written notice requirement

3 business days to rescind, extended up to 3 years if disclosures defective

Actual damages + up to 3x for knowing violations + attorney's fees

100% property tax exemption on added value

Governs UCC-1 financing statements on equipment

Electrical contractor licensing oversight

When It Applies

Residential solar contracts signed on or after 9/1/2025

Door-to-door sales

Financed transactions secured by the home

Deceptive acts in consumer transactions

OWNED solar systems on residential property

Financed solar transactions with security interest

All solar installation involving electrical work

How These Rights Work Together

A single Texas solar contract may implicate multiple frameworks at once. For example: a door-to-door financed solar sale signed October 1, 2025 may simultaneously involve SB 1036 (5-business-day cancellation), the Home Solicitation Transactions Act (3-business-day cancellation), TILA (rescission window), and the DTPA (substantive deceptive trade practices claims). The applicable timing windows and procedural requirements interact in ways that benefit from legal review. Different frameworks have different procedural requirements:
  • SB 1036 cancellation requires written notice to the cancellation address in the contract
  • Home Solicitation Act cancellation requires written notice; the form is specified in Chapter 601
  • TILA rescission requires written notice to the lender; the form is specified in Regulation Z
  • DTPA litigation requires a 60-day pre-suit notice under §17.505
Getting the procedure wrong can forfeit the right. A qualified attorney may review which framework provides the cleanest path in the homeowner’s specific situation.

IMPORTANT: Do Not Stop Making Payments Without Legal Advice

Continuing to make payments on a solar lease, loan, or PPA is generally the safest course of action until a qualified Texas-licensed attorney has reviewed the homeowner’s documents and provided specific advice. Stopping payments without legal advice may result in default, damage to credit, collections, or other consequences. The decision to stop making payments must only be considered under advice and representation of a qualified attorney.

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Frequently Asked Questions

These questions come up most often during Texas homeowner intakes. They are general information only and not legal advice.

Which Texas law gives me the strongest right to cancel?

It depends on when the contract was signed, how it was sold, and what was promised. For contracts signed on or after September 1, 2025, SB 1036 provides a 5-business-day cancellation right with no penalty. For door-to-door sales, the Home Solicitation Transactions Act provides a 3-business-day cancellation right. For financed transactions, TILA may provide a rescission window. Outside these windows, cancellation generally requires legal grounds — typically a DTPA misrepresentation or another fact-specific claim.

When did Texas SB 1036 take effect?

SB 1036 took effect September 1, 2025. The 5-business-day cancellation right applies to residential solar contracts signed on or after that date. TDLR registration enforcement begins September 1, 2026.

Can I still cancel if I am past all the cancellation windows?

Cancellation outside the cancellation windows generally requires legal grounds — typically a DTPA misrepresentation claim or another fact-specific issue. The specific facts of the homeowner’s situation, the documentation, and applicable Texas and federal law all matter. A qualified attorney may review whether the matter may merit further legal review.

What is the DTPA 60-day pre-suit notice?

Texas DTPA §17.505 requires the homeowner to send a written notice to the solar company at least 60 days before filing a DTPA lawsuit. The notice describes the alleged conduct and the damages claimed. The 60 days gives the solar company a window to make a settlement offer.

What is the statute of limitations for a DTPA claim?

Generally two years from the date the deceptive act occurred. Some claims may accrue later under the discovery rule. Time-sensitive matters should be reviewed promptly — a qualified attorney would evaluate the specific timing during the intake review.

If my system is leased, can I get the Texas property tax exemption?

No. Texas Tax Code §11.27 provides a 100-percent property tax exemption on the added value of OWNED solar energy devices. Leased systems do not qualify because the lessor — not the homeowner — owns the system. If a homeowner was sold a lease while being told they would receive the §11.27 benefit, that representation may be a potential disclosure issue under the DTPA.

What if my contract does not include the SB 1036 cancellation address?

SB 1036 requires the contract to include the cancellation address and the last day of the cancellation period. If those disclosures are missing, the cancellation window may not have started running. A qualified attorney may review whether the specific contract complies with SB 1036’s disclosure requirements.

How does the OAG investigation affect my individual case?

The April 2026 OAG investigation is an enforcement action by the State of Texas against named solar companies. It does not, by itself, cancel any individual contract or recover damages for any individual homeowner. Filing a complaint at oag.my.texas.gov adds to the OAG’s record. Individual legal review proceeds on a separate track.

Should I report the solar company to TDLR?

TDLR has regulatory oversight over electrical contractors and, beginning September 1, 2026, residential solar retailers and salespeople. Complaints can be filed at tdlr.texas.gov. TDLR enforcement is separate from private legal remedies — both can be pursued.

Where can I read the actual text of these laws?

Texas Occupations Code Chapter 1806 (SB 1036), Business & Commerce Code Chapter 17 (DTPA), Business & Commerce Code Chapter 601 (Home Solicitation Transactions Act), Tax Code §11.27 (solar property tax exemption), and Business & Commerce Code Chapter 9 (UCC Article 9) are all available at statutes.capitol.texas.gov. Federal TILA is at 15 U.S.C. §1601 et seq. and Regulation Z at 12 CFR Part 1026.

Ready to See How These Rights May Apply to Your Situation?

Each Texas solar matter is fact-specific. The summary on this page is general information, not legal advice. A free intake gets the homeowner’s documentation in front of a qualified attorney to find out which frameworks may apply and what next steps may make sense.

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