Solar loans and TILA rescission: a practical overview for intake teams

When the right to rescind applies

Under Regulation Z, 12 CFR 1026.23, a consumer can rescind a credit transaction in which a security interest is or will be retained or acquired in the consumer's principal dwelling. Residential mortgage transactions and certain refinancings by the same creditor are exempt.

So the first intake question is not whether the homeowner is unhappy, but what the lender took as security and whether the home is the homeowner's principal dwelling.

How long it lasts

The right generally lasts until midnight of the third business day after the latest of three events: consummation, delivery of the rescission notice, or delivery of all material disclosures.

If the notice or the material disclosures were never delivered, the right can last up to three years after consummation, ending earlier if the home is sold or transferred. That is why the loan documents and what the homeowner actually received matter so much.

The open question: fixture filings

Many solar loans are not secured by a mortgage on the home. Some are secured by a lien on the panels themselves, often recorded as a UCC fixture filing. The Consumer Financial Protection Bureau's August 2024 Solar Financing Market Issue Spotlight noted that some solar loans are secured this way.

Whether a loan secured only by a fixture filing on the panels counts as secured by the borrower's principal dwelling is unsettled. We found no CFPB rule or guidance resolving it. The closest appellate decision we found, Lankhorst v. Independent Savings Plan Co. (11th Cir. 2015), involved home water treatment equipment and held that a security interest in installed equipment, even if it is a fixture, is not a security interest in the home under TILA. Courts in other circuits may see it differently.

How it interacts with the Cooling-Off Rule

The FTC's Cooling-Off Rule, which gives buyers three business days to cancel many sales made at their home, excludes transactions that carry a TILA rescission right. Which right applies, if either, depends on the structure of the deal, so collect both the sales agreement and the loan documents.

What to collect at intake

• The loan agreement and every disclosure the homeowner received, with dates
• Any notice of the right to cancel or rescind, and how and when it was delivered
• What the lender took as security: a mortgage, a lien on the panels, a fixture filing, or nothing
• Any UCC filing record from the county
• Whether the home is the homeowner's principal dwelling, and whether it has been sold or refinanced
• The date of consummation and any date the homeowner tried to cancel

Where Telgrow fits

We talk with homeowners every week whose solar contract went wrong. Homeowners who ask to speak with a lawyer are told participating firms pay to advertise, then connected with a participating firm licensed in their state. You choose your states and topics, and contact details and state are confirmed before you get the lead.

Telgrow is not a law firm. We do not evaluate claims or recommend a firm to homeowners. Firms pay for advertising only, price never depends on whether a homeowner hires you, and we take no part of your fees.

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