Most "questions to ask before going solar" lists are really about vetting the salesperson — how long has the company been in business, are they licensed, can they give references. Those questions matter, but they're answered before a contract ever reaches your kitchen table. The document itself contains a separate set of clauses that don't come up in the sales pitch and rarely get read line by line: cancellation windows, lien filings, escalator math, arbitration waivers, and warranty splits that determine who's actually on the hook when something goes wrong. These are the 12 questions the contract itself should answer — not the installer's talking points.
1. Does this qualify for the FTC's 3-day cancellation window, and did I get the notice in writing?
Under the FTC's Cooling-Off Rule (16 CFR Part 429), most solar sales made at your home qualify as door-to-door sales, giving you three business days to cancel for any reason. The seller is legally required to give you two copies of a cancellation form in writing at the time of signing. If they didn't, the clock on your right to cancel may not have started at all — in some interpretations it stays open indefinitely until you receive that notice. Check the contract for the cancellation form itself, not just a mention of a right to cancel.
2. Is there a UCC-1 fixture filing, and who is responsible for terminating it?
If you're financing through a loan or lease, the lender likely files a UCC-1 fixture filing with your county, listing the panels as collateral attached to your property. It shows up in a title search like a lien. The contract should specify that the lender files a UCC-3 termination once the loan is paid off — and you should know that many 2018–2023 solar loans left that filing active well past payoff, which has stalled home sales and refinances when nobody filed the termination. Ask who is responsible for filing it, and get it in writing.
3. What is the annual escalator rate, and what does the payment look like in year 25?
If you're signing a lease or PPA, the contract will include an escalator — an annual rate increase, typically between 1% and 3%, with 2.9% being the industry default for many major providers. A 2.9% escalator roughly doubles your effective payment over 25 years: a $150/month payment grows to around $199 by year 10 and $305 by year 25. Ask for the year-25 number in writing, not just the starting payment, and ask whether the company will accept a lower escalator (1.5%–1.75% is a common negotiated floor) if you push back.
4. Is this a loan, lease, or PPA — and does that change who gets the tax credit?
Ownership structure determines who claims the federal tax credit. If you own the system (cash or loan), you claim the 30% credit yourself, but only if you pay the expenditure before it expires. If it's a lease or PPA, the solar company owns the system and claims the credit — not you. Some of that value may be baked into your monthly rate, but it never appears on your tax return. If your proposal shows a tax credit line item and you're leasing, ask who's actually claiming it.
5. What's the production guarantee, and how is a shortfall actually paid out?
Many contracts guarantee a minimum annual kWh output and promise "true-up" compensation if the system underperforms. In practice, this is usually cash compensation of $0.10–$0.20 per missing kWh, calculated against your utility's annual true-up bill, and it requires you to file a claim — it isn't paid automatically. Ask exactly how the shortfall is measured, whether shading, panel degradation, or "unusual weather" clauses can exclude a bad year from the calculation, and how long you have to file.
6. Does the contract include a mandatory arbitration clause?
Many residential solar contracts — including from some of the largest national installers — include mandatory binding arbitration clauses that waive your right to a jury trial and to join a class action, routing any dispute to a private arbitrator instead of a courtroom. This is legal, and it's common, but it's not something a salesperson volunteers. If the contract has one, understand that your only recourse for a dispute — including installation defects or a broken production guarantee — runs through arbitration, not small claims court.
7. What's the difference between the equipment warranty and the workmanship warranty — and who backs each one?
A "25-year warranty" usually bundles two different guarantees. The equipment warranty (10–25 years) comes from the panel or inverter manufacturer and generally survives if your installer goes out of business. The workmanship warranty (often just 5–10 years) covers the installation itself — roof penetrations, wiring, mounting — and is backed by the installer alone. If the installer folds, that workmanship coverage typically disappears with them; you'd be an unsecured creditor in a bankruptcy, and unsecured creditors are last in line. Ask for the workmanship warranty length in writing, separately from the equipment warranty.
8. What happens to the loan, lease, or PPA if I sell the house?
Loans are usually your personal debt and don't legally need to transfer, but the panels themselves stay with the house, which means an unresolved UCC-1 filing can hold up your closing regardless of loan status. Leases and PPAs generally must transfer to the buyer, and the buyer has to qualify — a credit check the new owner may not pass, which can force you to buy out the remaining contract to close the sale. Ask for the current buyout amount and how it declines over the contract term.
9. Are there change-order rules for cost increases discovered during installation?
Roof issues, panel upgrades, or unexpected electrical work can trigger a change order — a contract amendment that increases your price mid-installation. The original contract should specify that any change order requires your written signature before work proceeds and before additional charges apply. Without that clause, a verbal "we found some rot, it'll be a bit more" can turn into a bill you never agreed to in writing.
10. Is there a lien waiver process for subcontractors?
Solar installers frequently subcontract electrical work. If a subcontractor isn't paid by the installer, they can, in some states, file a mechanic's lien against your property — even though you paid the installer in full. Ask whether the contract includes lien waivers from subcontractors as a condition of each payment milestone, and don't release a final payment until you have them.
11. What are the milestone payment terms, and what percentage is due before permits are approved?
Some contracts front-load payment before permitting, interconnection approval, or even equipment delivery. A more protective structure ties payments to completed milestones: deposit, permit approval, installation complete, and utility permission-to-operate (PTO). If the contract asks for most of the money before PTO — the point at which your system is actually allowed to turn on — that's a red flag for negotiating leverage if something goes wrong later.
12. What's the actual timeline to permission-to-operate, and is there a penalty if it slips?
Your system can't legally produce power for your home until your utility issues PTO, and that step is outside the installer's direct control — it depends on the utility's interconnection queue, which has stretched past 90 days in some jurisdictions in 2026. A contract with no PTO estimate, or one that doesn't distinguish "installation complete" from "system operating," leaves you with no benchmark for delay. Ask for a specific PTO estimate and whether there's any credit or penalty if the installer's own paperwork delays cause you to miss it.
None of these questions are about whether the installer seems trustworthy in the sales meeting. They're about whether the document you're about to sign protects you after the truck leaves — because by the time a production shortfall, a lien on your title, or an installer bankruptcy actually happens, the contract is the only thing that decides what you're owed.