A Power Purchase Agreement — usually called a PPA — is a third type of solar contract that homeowners often confuse with a lease. The two look similar from a distance: a solar company installs equipment on your roof, you don’t own the equipment, and you make payments for 20 to 25 years. But the math is different, the legal structure is different, and the cancellation considerations are different.
If you have a PPA you want out of, the first step is being clear on what you actually signed. This page covers what a PPA is, how it differs from a lease and a loan, the common reasons homeowners want to exit, and the legal grounds that may support cancellation.
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Under a Power Purchase Agreement, the solar company owns the equipment installed on your roof. You don’t pay the company a flat monthly amount for the use of the equipment (that would be a lease). You don’t pay a lender for a loan that financed the purchase (that would be a financed system). Instead, you pay the solar company for the power the system generates, at a rate set in the PPA — measured in cents or dollars per kilowatt-hour.
| Solar Lease | Solar PPA | Solar Loan |
|---|---|---|
| Solar company owns the equipment | Solar company owns the equipment | Homeowner owns the equipment |
| Pay a fixed monthly amount | Pay per kilowatt-hour produced | Pay a fixed monthly loan payment |
| Higher production doesn’t change what you pay | Higher production = higher payment to the solar company | Production doesn’t affect loan payments |
| Solar company gets the tax credit | Solar company gets the tax credit | Homeowner may be eligible (subject to current law) |
| Typical term: 20–25 years | Typical term: 20–25 years | Typical term: 10–25 years |
| Escalator clauses common (~2.9–3.9%/yr) | Escalator clauses common (~2.9–3.9%/yr) | Loan rate typically fixed |
The PPA structure creates a specific risk many homeowners don’t fully understand at the point of sale: when the system produces more power than expected, your payment goes up.
Solar companies often advertise this as “you only pay for what you use,” which sounds appealing — but in practice, an oversized system in a sunny climate can generate more electricity than the household actually consumes, and the homeowner may still owe payment for every kilowatt-hour produced by the system.
Combined with an annual escalator clause, a PPA payment can rise substantially over a 20–25 year contract term.
PPA-specific cancellation requests EMS receives generally describe one or more of the following patterns.
The salesperson promised the PPA would replace the utility bill at a lower rate. After installation, the PPA payment ended up higher than what the utility bill used to be — sometimes because the system produces more than expected, sometimes because the PPA rate was higher than presented, sometimes both.
With a PPA, the homeowner pays for every kilowatt-hour produced — even if the household doesn't consume it. In some states the homeowner gets credit for excess production through net metering; in many states the credit rate is far less than the PPA rate, so the homeowner pays more for power than they receive back.
Most PPAs include an annual escalator that increases the per-kilowatt-hour price every year. Over a 25-year PPA, a 2.9% annual escalator nearly doubles the rate. By year 10 or 15, many PPA holders are paying more per kilowatt-hour to the solar company than they would have paid the utility for the same power.
The original sales proposal showed specific production estimates. Actual production has been significantly below those estimates — but the homeowner still pays for every kilowatt-hour the system does generate.
Selling a home with a PPA is harder than selling a home with an owned solar system. The PPA needs to be either transferred to the buyer (with buyer qualifying) or paid off through a buyout. Buyout amounts on PPAs can be substantial. Some homeowners discover their PPA is blocking the sale entirely.
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PPAs are subject to the same general consumer protection frameworks as other solar contracts. Whether a specific PPA may be cancellable depends on the facts and the laws of the homeowner's state. A qualified attorney evaluates these matters case by case.
State consumer protection statutes prohibit unfair or deceptive practices in consumer transactions. PPAs are consumer transactions. Misrepresentations at the point of sale about savings, system performance, the escalator clause, the per-kWh rate compared to the utility rate, or tax benefits may give rise to claims under state UDAP statutes. These statutes typically allow actual damages, sometimes doubled or tripled for willful violations, and often include attorney-fee shifting.
If the PPA was signed at the homeowner's home — as most door-to-door solar sales are — the FTC Cooling-Off Rule (16 CFR Part 429) typically applies. It provides a three-business-day right to cancel and requires the seller to give written notice of the right. Missing notice can extend the cancellation window significantly.
Some states have enacted residential-solar-specific cancellation statutes. Texas SB 1036 (effective September 1, 2025) provides five business days. Other states have varying provisions. Which statute applies depends on where the PPA was signed and where the homeowner lives.
PPAs typically include production guarantees — language stating that the system will generate a minimum number of kilowatt-hours over a defined period. If the system has materially underperformed the guarantee and the solar company has not addressed it, that may be a breach of the contract. State contract law applies.
PPAs have specific representations that frequently come up in cancellation matters: the per-kilowatt-hour rate compared to the utility rate; the escalator clause; how excess production is credited; what happens if the homeowner sells the home; what the buyout cost would be. Misrepresentations about any of these may support state UDAP claims. A qualified attorney evaluates the specifics of the sales pitch and the contract.
Submitting an intake with EMS does not pause your obligations under the PPA. Stopping payments without specific advice from a qualified attorney may result in default, damage to credit, collections, lawsuits from the solar company, removal of the equipment, and other consequences that can complicate the case you are trying to bring.
Continuing to make payments is generally the safest course of action until a qualified attorney has reviewed your specific PPA and provided advice based on your specific facts.
PPA cases often depend on documentation. These are the core records attorneys typically review.
The signed Power Purchase Agreement, including exhibits and production guarantee language.
The original sales proposal showing pricing, production estimates, and projected savings.
Sales materials, emails, text messages, or recorded calls discussing pricing or savings promises.
Utility bills from the 12 months before installation and every month since installation.
Monthly statements from the solar company showing kilowatt-hours produced and amounts charged.
Production data from the monitoring app showing actual system output.
Correspondence involving service issues, warranty claims, or production complaints.
EMS is a marketing and intake service. Legal review and any legal action are performed by qualified attorneys, not by EMS.
An EMS specialist talks through what the PPA actually says, what was promised at the point of sale, and what has happened since installation.
You provide the PPA, the sales proposal, utility bills, and production statements. EMS collects and organizes these documents. EMS does not analyze them for legal violations.
If the case meets EMS’s initial criteria, documentation may be reviewed by a qualified attorney to determine whether the facts may support a legal review under applicable consumer-protection frameworks.
If a qualified attorney accepts the case, the homeowner enters a flat-fee engagement directly with the law firm. Any fee is disclosed in writing before agreement.
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These are the questions homeowners with PPAs ask most often. Answers are general information only — not legal advice. A qualified attorney evaluates how any issue applies to a specific PPA.
Under a lease, you pay a fixed monthly amount to the solar company for the use of the equipment regardless of how much power it produces. Under a PPA, you pay the solar company per kilowatt-hour the system actually produces. If the system produces more power, you pay more. If it produces less, you pay less — but you may also be relying on the utility for more of your power, at the utility's rate. The legal frameworks for cancelling each are similar, but the specific facts that matter differ.
Two reasons typically. First, the escalator clause — most PPAs include an annual price increase, commonly 2.9% or 3.9%. Over a 25-year term, that nearly doubles the per-kilowatt-hour rate. Second, system production can vary year to year. Sunnier years produce more kilowatt-hours, and you pay for every one of them. A qualified attorney evaluates whether the escalator clause was adequately disclosed at the point of sale and how that interacts with state UDAP law.
Production guarantees are common in PPA contracts and they are enforceable contractual terms. If the system has materially underperformed the guarantee and the solar company has not addressed it through the contract's remedy mechanism (typically a credit or payment for the shortfall), that may be a breach of the contract. The first step is documenting the actual production against the guarantee — utility bills, production data, and monthly statements. A qualified attorney evaluates whether the documentation supports a breach claim.
PPA buyout amounts can be substantial — sometimes tens of thousands of dollars. Common options when selling a home with a PPA include having the buyer assume the PPA (which requires the buyer to qualify and agree), paying the buyout amount yourself, or pursuing cancellation through a legal review if there are grounds. If the PPA is blocking a sale entirely, that's one of the situations where a legal review may be appropriate. A qualified attorney evaluates the contract and the specific facts.
Submitting an intake is free. The initial review is free. There is no cost until the case is accepted by a qualified attorney and you agree in writing to the flat-fee engagement. The flat fee is disclosed up front. If the attorney does not accept the matter, you owe nothing.
Because the solar company owns the equipment under a PPA, the company is generally responsible for handling it after cancellation. Common outcomes include removal of the equipment by the solar company at their expense, transfer of the equipment to the homeowner with or without payment, or other negotiated arrangements. The specifics are part of what the attorney handles.
When a PPA provider is bankrupt or shut down, the PPA itself typically remains in place — the contract is often sold to another company during bankruptcy. The new owner of the contract may be a different entity than the one that installed the system, which can create service and warranty issues. A qualified attorney evaluates how the change in ownership affects the homeowner's options under the PPA.
EMS does not provide guidance on credit. Decisions about credit, payment, and the financial consequences of a particular legal action are not within the scope of what we provide. A qualified attorney evaluates how a particular legal action may interact with your specific financial situation.
Timelines vary. The EMS intake and document gathering typically takes one to three weeks. If the case proceeds to attorney review and the attorney accepts the matter, the legal process typically takes several months. Some state UDAP statutes have pre-suit notice requirements that add delay. Complex matters may take longer.
State attorneys general accept consumer complaints about deceptive solar sales practices and many state AGs have brought enforcement actions against solar companies. Filing a complaint with the AG is a separate path from pursuing private legal action. A qualified attorney may advise on whether and when to file an AG complaint in a specific case — sometimes the two pathways work in parallel.
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Submit your information for review. EMS helps homeowners understand possible legal and contract-related options involving solar agreements, financing disputes, installation concerns, and misleading sales practices.
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