Solar Lease & Savings Guarantee Fraud Demand Letters
Solar leases and PPAs promise decades of savings, but hidden escalators, inflated production estimates, and misleading transfer terms trap homeowners in contracts that cost more than utility power. This playbook helps you challenge broken savings guarantees and seek rescission.
Solar Lease vs. PPA: Key Differences
Feature
Solar Lease
Power Purchase Agreement (PPA)
Payment structure
Fixed monthly payment regardless of production
Pay per kWh generated by the system
Typical escalator
0-3% annual increase
1.5-3% annual increase
Risk if underperformance
You pay full amount even if panels produce less
You pay only for actual production
Contract length
20-25 years
20-25 years
Buyout option
Fair market value or scheduled amount
Fair market value or scheduled amount
Common Savings Guarantee Fraud Patterns
Escalator Concealment
Salesperson promises "locked-in" rate without mentioning annual escalators
2.9% escalator compounds to 76% increase over 20 years
By year 15-20, PPA rate often exceeds utility rate
Contract buries escalator in fine print or exhibits
Production Overestimation
Savings projections assume optimal sun exposure
Shading from trees or nearby structures ignored
Roof orientation and pitch not properly calculated
System degradation (0.5-1% per year) not disclosed
Transfer/Sale Misrepresentation
Salespeople claim lease transfers easily to buyers
Reality: buyers must qualify and often refuse
Buyout amounts of $15,000-$30,000 kill home sales
False claims that solar increases home value by lease amount
Inflated assumptions make solar look more attractive
No disclosure that projections are speculative
PACE Financing Alert: If your solar was financed through PACE (Property Assessed Clean Energy), a lien was placed on your property that takes priority over your mortgage. PACE loans have faced regulatory action for predatory practices, especially targeting seniors.
Legal Framework for Lease/PPA Disputes
FTC Enforcement and Industry Scrutiny
The FTC has warned solar companies about "savings" claims that lack substantiation. Projections based on unrealistic utility rate increases or optimal production are deceptive if not clearly disclosed as assumptions.
State attorneys general in California, Florida, Arizona, and Texas have investigated major solar lease providers for misleading sales practices.
The FTC Cooling-Off Rule requires three-day cancellation rights for door-to-door sales, which includes solar sales conducted at the consumer's home.
State Consumer Protection (UDAP) Claims
California: The CLRA and UCL prohibit deceptive practices. The CSLB has taken action against solar companies for license violations and false advertising.
Arizona: Consumer Fraud Act (ARS 44-1521) covers solar misrepresentation with actual damages and possible treble damages.
Florida: FDUTPA allows actual damages plus attorney fees for unfair or deceptive acts.
PACE Financing Regulations
Issue
Regulation
Consumer Protection
Ability to repay
California AB 1284 (2017)
Requires income verification and ability-to-pay analysis
Oral disclosures
CFPB guidance
Key terms must be disclosed verbally before signing
Senior protections
Various state laws
Enhanced disclosures for homeowners over 65
Lien priority
FHFA restrictions
Fannie/Freddie will not purchase mortgages with PACE liens
Proving Savings Fraud: Compare (1) what the salesperson promised verbally and in sales materials, (2) what the contract actually says about savings guarantees (usually disclaimed), and (3) actual performance. The gap between promise and reality is your fraud claim.
Documentation Checklist
Sales Process Evidence
Written savings estimates and production projections
Sales presentation materials, brochures, or proposals
Email and text communications with salesperson
Notes of verbal promises made during sales pitch
Names of salespeople and their representations
Contract Documents
Solar lease or PPA agreement (all pages and exhibits)
Escalator schedule and rate tables
Production guarantee terms (if any)
Transfer and buyout provisions
Cancellation and default terms
Financial Performance Data
Utility bills: Gather 24+ months of bills from before and after installation. Calculate actual net savings (utility cost before minus current utility cost plus lease payment).
Production data: Download monthly production reports from the monitoring system. Compare actual kWh to projected kWh in the contract.
Payment history: Document all lease or PPA payments made, including escalated amounts over time.
Escalator impact: Calculate your current per-kWh rate and compare to current utility rates to show when crossover occurred.
Home Sale/Transfer Issues
If you attempted to sell your home, document buyer objections to assuming the lease.
Obtain the buyout quote from the solar company and compare to what was represented at sale.
If the sale fell through due to solar, get documentation from the buyer or real estate agent.
Tip: Many solar companies record sales calls for "quality assurance." Request your recorded calls under state privacy laws. These recordings often capture verbal promises that contradict the written contract.
Letter Strategy
Core Legal Arguments
Fraudulent inducement: The salesperson made specific false promises about savings, escalators, or transfer terms that induced you to sign.
Negligent misrepresentation: Savings projections lacked reasonable basis and were made without adequate disclosure of assumptions.
UDAP violations: Deceptive trade practices under state consumer protection laws, often providing enhanced damages and attorney fees.
Unconscionability: Contract terms are so one-sided and were hidden in a way that shocks the conscience.
Failure to disclose: Material facts about escalators, transfer difficulty, or production limitations were concealed.
Specific Demands
Rescission: Cancel the lease/PPA, remove the system at company expense, refund all payments.
Lease modification: Alternatively, eliminate or reduce escalators to restore the bargain promised.
Damages: Compensate for the difference between promised savings and actual costs over the contract term.
UCC release: Remove any financing statements filed against your property.
PACE remediation: If PACE financed, demand the company work with the PACE administrator to resolve the lien.
Escalation Leverage
Mention intent to file with the state contractor licensing board, attorney general, and CFPB.
Reference class actions or regulatory enforcement against the same company.
Note that the company's BBB rating, Yelp reviews, or AG complaint volume shows pattern of similar conduct.
Explain that UDAP claims provide attorney fee recovery, making litigation economically viable.
Arbitration Clauses: Most solar leases contain mandatory arbitration provisions. Review your contract and be prepared to proceed in arbitration if needed. Demand letters are still valuable for creating a record and opening negotiations.
Sample Solar Lease Fraud Demand Letter
[Date]
Via Certified Mail and Email
[Solar Lease Company Name]
[Address]
[City, State ZIP]
Re: Demand for Rescission - Fraudulent Savings Representations
Customer: [Your Name]
Agreement Date: [Date]
Property Address: [Installation Address]
Account/Contract Number: [Number]
Dear Sir or Madam:
I represent [Customer Name] regarding the solar Power Purchase Agreement your company sold for the above property. This letter demands rescission based on material misrepresentations made during the sales process.
FACTUAL BACKGROUND
On [Date], your sales representative [Name] conducted a presentation at my client's home. The representative made the following express representations:
1. My client would save "at least $50 per month from day one" with a "locked-in" rate that would protect against utility rate increases.
2. The system would produce approximately 9,500 kWh annually, eliminating 85% of my client's electricity costs.
3. If my client sold the home, the lease would "easily transfer to the new buyer" with "no impact on the sale."
4. My client's total energy costs (utility plus PPA payment) would "always be less" than utility-only costs.
Based on these representations, my client signed a 25-year PPA at $0.15/kWh with a 2.9% annual escalator.
THE REPRESENTATIONS WERE FALSE AND MISLEADING
After three years of operation, the following facts demonstrate the fraud:
1. SAVINGS: My client's combined costs (utility plus PPA) now EXCEED what utility-only costs would have been. In Year 1, savings were $32/month. In Year 3, my client now pays $15/month MORE than utility-only would cost.
2. ESCALATOR: The "locked-in rate" of $0.15/kWh has increased to $0.164/kWh (Year 3), and will reach $0.32/kWh by Year 20. The local utility rate is currently $0.14/kWh. Your representative never explained that the rate would nearly double.
3. PRODUCTION: The system has produced an average of 7,800 kWh annually, 18% below the promised 9,500 kWh. Combined with the escalator, my client's cost per kWh of actual production is now $0.20.
4. HOME SALE: My client attempted to sell the property in [Year]. Two qualified buyers withdrew offers after learning of the PPA obligation and $22,000 buyout requirement. This directly contradicts the "easy transfer" representation.
5. TOTAL COST COMPARISON: Over the remaining 22 years, the PPA will cost my client approximately $58,000 (with escalators). Utility power at current rates with 2% annual increases would cost approximately $42,000. My client was induced into a contract that will cost $16,000 MORE than doing nothing.
LEGAL CLAIMS
These misrepresentations violate:
- [State] Consumer Protection Act, prohibiting unfair and deceptive trade practices
- Common law fraud and negligent misrepresentation
- FTC Act Section 5 and FTC guidance on substantiation of savings claims
- [State] Home Solicitation Sales Act (failure to provide proper cancellation notice)
Under [State] law, willful UDAP violations entitle consumers to treble damages and attorney fees.
DEMANDS
Within twenty-one (21) days of this letter, [Company] must:
1. Agree to rescind the PPA and remove the solar panel system at your expense;
2. Refund all PPA payments made to date, totaling approximately $[Amount];
3. Release my client from all future obligations under the agreement;
4. File a UCC-3 termination statement for any financing statements recorded;
5. Compensate my client $[Amount] for documented harm from the failed home sale.
ALTERNATIVE RESOLUTION: If full rescission is not acceptable, my client will consider a contract modification that (a) eliminates the escalator provision, (b) reduces the per-kWh rate to $0.10 for the remainder of the term, and (c) includes a guaranteed buyout option at $5,000 or less.
If you fail to respond satisfactorily, my client will file complaints with the [State] Attorney General's Consumer Protection Division, the [State] Contractors State License Board, and the Federal Trade Commission. We will pursue all legal remedies including arbitration if required by the contract.
Contact me at [email/phone] to discuss resolution.
Sincerely,
[Attorney Name]
[Firm Name]
[Address]
[Phone]
[Email]
Enclosures: Utility bill comparison chart, production data report, escalator projection spreadsheet
cc: [State] Attorney General - Consumer Protection Division
Yes, if the contract terms are grossly unfair (substantive unconscionability) AND you had no meaningful choice or the terms were hidden (procedural unconscionability). High-pressure door-to-door sales, elderly consumers, and buried escalator provisions support unconscionability arguments.
The acquiring company typically assumes liabilities. Check assignment language in your contract. Major consolidation in the solar industry (Sunrun acquiring Vivint, etc.) means the current servicer may be liable for predecessor fraud. Demand letters should go to both the original company and the current owner.
Attorney Services & Contact
Solar Lease Dispute Representation
I represent homeowners trapped in solar leases and PPAs where savings promises were false, escalators were hidden, or home sales were blocked. Cases with documented misrepresentation and significant financial harm are strong candidates for rescission or damages.
Email owner@terms.law or use Calendly for a paid strategy session.