The Truth in Lending Act and your solar loan

Federal protections · 10 min read · Updated May 5, 2026

If you financed your solar system with a loan, federal law requires the lender to give you a specific set of disclosures before you sign. The Truth in Lending Act (TILA) — implemented by Regulation Z — exists to make sure consumers understand what they’re signing.

What TILA requires

For consumer credit transactions secured by a dwelling (which includes most solar loans), the lender must disclose in writing, before consummation:

• Annual Percentage Rate (APR) — the true cost of credit, not just the interest rate.
• Finance charge — the dollar amount the credit will cost you.
• Amount financed — the credit provided to you.
• Total of payments — what you will have paid by the end of the loan.
• Payment schedule — number, amount, and timing of payments.
• Right to rescind — for loans secured by a principal dwelling, a 3-business-day right of rescission.

The “dealer fee” problem

Most solar loans include a hidden dealer fee — a percentage (often 20–30%) of the loan principal that goes to the installer/dealer as a kickback. This fee inflates the amount financed without giving the borrower additional value.

If the dealer fee is rolled into the principal but not disclosed as a finance charge, that may be a TILA violation. Several federal cases have addressed this directly. The CFPB has also issued guidance on solar dealer fees and disclosure obligations.

Right of rescission

For loans secured by your principal dwelling, you have a 3-business-day right to rescind after consummation, after delivery of the TILA disclosures, or after delivery of the rescission notice — whichever is later.

If the lender failed to deliver proper TILA disclosures, the rescission window can extend up to 3 years in some circumstances.

What to look for in your loan documents

• A separate document titled “Federal Truth-in-Lending Disclosure” or similar, with the five required boxes.
• A “Notice of Right to Cancel” with two copies (one to keep, one to return).
• The APR, which should match the rate disclosed verbally.
• The “Amount Financed” line — this is what compares to the system’s cash price.

What to do if disclosures look wrong

TILA violations are not minor — they can entitle you to actual damages, statutory damages, attorneys’ fees, and in rescission cases, the return of all finance charges paid. Submit your loan documents for a free review if any of these appear missing or wrong.

This article is general information, not legal advice. TILA case law is fact-specific and continues to evolve.