What should I check before signing a residential solar contract?

The rule

A residential solar contract is a consumer contract, and the rules that protect you come
from several places: federal consumer-protection rules, state contractor-licensing laws,
and the tax rules for the credit you plan to claim. The
FTC's guidance on going solar
is a good starting point: it tells homeowners to compare offers, understand the
financing, and be skeptical of high-pressure sales.

The FTC's cooling-off rule, in
16 CFR Part 429,
gives a three-day right to cancel a sale of $25 or more made at your home — including
door-to-door solar sales. The right must be disclosed in writing at the time of sale, and
the seller must honor a cancellation within three business days. Sales made at a store or
after your own inquiry may fall outside the federal rule; state rules can provide
additional protection.

What the rule means in practice

• The three-day right is specific. It applies to door-to-door sales of more than $25
  made at your home. It is not a general right to cancel any solar contract.
• Licensing is the first check. The
  California Contractors State License Board's Solar Smart guidance
  shows why: verify the license, get everything in writing, and compare at least three
  proposals. Other states run their own boards.
• The written proposal is the contract's backbone. Equipment make and model, system
  size, total price, payment schedule, financing terms, and the installer's performance
  assumptions should all be in writing before you sign.
• The tax credit has its own rules. The
  IRS home-energy tax credit page
  states the current eligibility, equipment, and placed-in-service requirements. A
  savings pitch that ignores those rules is not a reliable plan.

What may still be required or restricted

• State licensing and disclosure laws vary; the CSLB guidance is an example, not a
  national rule.
• Financing terms — loans, leases, and power-purchase agreements are contracts with
  their own disclosures, cancellation terms, and transfer rules.
• HOA, permit, and utility approvals are separate from the contract and are covered
  by other guides.
• The DOE Homeowner's Guide to Solar
  lists the approval and paperwork steps beyond the contract itself.

Facts that could change the answer

• Where and how the sale was made (door-to-door versus store or showroom).
• The state's licensing and consumer-protection rules.
• The financing structure (outright purchase, loan, lease, or PPA).
• The tax-credit eligibility and installation-date terms in effect for the year of
  installation.

Common mistakes

• Signing before the license check. An unlicensed contractor can leave you with
  permit, insurance, and warranty problems that no contract language fixes.
• Relying on verbal promises. Equipment, price, financing, and performance belong in
  the signed contract; what the salesperson said at the door is not the deal.
• Assuming the three-day right always applies. The federal cooling-off rule is
  specific to door-to-door sales; a store or showroom contract may have no cancellation
  right at all.
• Trusting savings numbers. Savings and credit estimates are assumptions. The credit
  amount, eligibility, and installation-date rules are set by the IRS page for the year
  of installation, not by the sales pitch.
• Losing the paperwork. The license verification, proposal, contract, and financing
  documents are the record you will need at sale, for insurance, or in a dispute.

Practical decision path

1. Verify the contractor's license with the state licensing board before signing.
2. Obtain and compare complete written proposals: equipment, price, financing, and
   performance assumptions.
3. Confirm the cancellation rules that apply to your sale, and get the written
   cancellation notice where required.
4. Confirm the current IRS credit terms and the placed-in-service date requirements.
5. Sign only when everything is in writing, and keep the complete record.

Before work begins, obtain the written requirement from the authority named in the guide and keep the record.

Records to keep

Keep the license verification, the complete written proposal, the signed contract, the
financing documents, the cancellation notice if provided, the IRS credit page for the
year of installation, and — after installation — the permit, inspection, and warranty
records.

When professional advice may help

If a solar contract involves large financing, a lease or PPA, or a dispute, consider
advice from an attorney or a tax professional familiar with the rules in your state
before signing or before cancelling.