Texas Solar Panel Fraud Law
Texas has some of the strongest consumer protection laws in the country. Here’s how the law protects homeowners who were lied to about solar panels.
The Texas Deceptive Trade Practices Act (DTPA)
Texas protects its consumers from deceptive business practices through a set of laws referred to as the Deceptive Trade Practices – Consumer Protection Act (DTPA).
This set of laws was built to deter fraudulent business practices. Since its inception, the DTPA has been revised throughout the years to ensure consumers have the legal relief they need to be compensated for fraud.
The DTPA also includes a provision authorizing punitive damages if the judge or jury determines that the company knowingly or intentionally committed acts that violate the DTPA. This means a company can be ordered to pay additional damages beyond the actual economic harm they caused.
The DTPA is a powerful tool that consumers in Texas can use to combat the epidemic of solar panel fraud occurring throughout the state. Not only does the DTPA offer remedies that make consumers whole; the DTPA functions as a deterrent by forcing companies to pay additional, punitive damages for their fraud.
Common DTPA Violations in Solar Cases
Under the DTPA, a solar company violates the law when it makes false, misleading, or deceptive representations to sell you a solar panel system. Common violations include:
- Promising a $0 electric bill — then the homeowner continues receiving electric bills after installation
- Promising a tax refund — misrepresenting how the federal solar tax credit works or promising a refund that never materializes
- Promising a “buyback program” — claiming the homeowner can sell excess electricity back to the grid for credits or cash
- Promising power during outages — claiming the system will keep the home powered independently during grid outages
- Misrepresenting system performance — overstating how much electricity the panels will generate
- Misrepresenting loan terms — concealing the true cost of financing or failing to disclose lien placement
The Texas Home Solicitation Act (THSA)
Most solar panel sales start with a knock on the door. When a salesperson comes to your home to sell you solar panels, the transaction is governed by the Texas Home Solicitation Act.
The THSA provides important protections for consumers, including:
- A 3-day right to cancel after signing the contract
- An obligation of the solar panel company to provide you with copies of your contracts at the time of signing
The Holder Rule — Lender Liability
Many homeowners ask: “But I didn’t buy the panels from the loan company — why would they be responsible?”
The answer lies in the FTC Holder Rule. This federal regulation requires that certain consumer credit contracts contain a provision preserving the consumer’s right to assert claims and defenses against the holder of the loan — even if the loan was sold or assigned to a different company.
In practice, this means that the loan company can be held liable for the solar company’s fraud. If the solar company lied to sell you panels and financed the purchase through a lender, the lender may be responsible for the same claims you have against the solar company.
What Damages Can You Recover?
Under the DTPA, consumers may be entitled to:
- Economic damages — the amount of the loan, past loan payments, electric bills, and other out-of-pocket expenses
- Additional (treble) damages — up to three times the economic damages if the company acted knowingly
- Attorney’s fees — the company may be ordered to pay your attorney’s fees
- Loan cancellation — the court can void the loan and order the lender to release you from the debt
- Lien termination — removal of any UCC filing or mechanic’s lien on your home
Think You Have a Case?
If someone misrepresented the benefits of solar panels to you, or if the company failed to uphold their end of the deal, you may have legal rights under the DTPA. Contact us for a free consultation.