Understanding Equipment Ownership vs. Service Responsibility in Solar Agreements
May 18, 2026 No Comments
Read More » On September 1, 2025, Texas Senate Bill 1036 — the Residential Solar Retailer Regulatory Act — took effect. It gives Texas homeowners a five-business-day right to cancel a residential solar contract without penalty, and it requires solar retailers to include specific disclosures in every contract. SB 1036 is now codified at Texas Occupations Code Chapter 1806.
Two more recent developments make SB 1036 newly important. On April 3, 2026, Texas Attorney General Ken Paxton announced a major fraud investigation against four residential solar companies, citing more than 100 formal complaints. Nine days later, on April 15, 2026, Freedom Forever — the second-largest residential solar installer in the United States and one of the four companies named in the AG investigation — filed for Chapter 11 bankruptcy in Delaware.
This page explains what SB 1036 actually says, how the five-business-day cancellation window works, what changes on September 1, 2026 when TDLR registration becomes mandatory, and what Texas homeowners should think about if their installer is in legal trouble or has filed for bankruptcy.
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SB 1036 is the most significant solar consumer protection law passed in Texas. The summary below covers the provisions most relevant to homeowners. The full statute is in Texas Occupations Code Chapter 1806.
The five-business-day window is straightforward in concept but has details that matter.
The five business days begin on the date the homeowner signs the contract. “Business days” means Monday through Friday excluding state holidays — weekends and holidays do not count.
By sending written notice of cancellation to the solar retailer. SB 1036 §1806.155 requires the contract to list the address (mailing or email) where the cancellation notice should be sent. If the contract lists that address, send the notice there. Use a method that creates a record of delivery — certified mail with return receipt is common, and email creates its own timestamp.
This is one of the most important provisions in SB 1036. If the contract does not include the required cancellation address, the homeowner may cancel “by any reasonable method” — meaning a written notice sent to the company’s general business address, the company’s customer service email, or another reasonable method may be sufficient. A qualified attorney may want to review whether the contract was missing this disclosure.
Under SB 1036, cancellation within the five-day window is “without penalty or further obligation.” The homeowner is not required to pay early termination fees or other cancellation charges for cancelling within the window.
On April 3, 2026, Texas Attorney General Ken Paxton announced what his office called a “major initiative to combat widespread fraud by companies selling solar panel systems.” The Office of the Attorney General issued Civil Investigative Demands (CIDs) to four residential solar companies:
⦁ Sunrun, Inc. — based in San Francisco; the largest residential solar installer in the U.S.
⦁ Freedom Forever, LLC (also doing business as “Freedom Solar”) — formerly the second-largest U.S. residential installer; filed Chapter 11 nine days after the CID
⦁ Lone Star Solar Services LLC — headquartered in Houston
⦁ CAM Solar, Inc. — corporate offices in San Antonio and Austin
According to the OAG, more than 100 formal complaints have been filed against these companies, with thousands more posted online. The investigation is examining potential violations of the Texas Deceptive Trade Practices-Consumer Protection Act, including misrepresentations about energy bill savings, solar system performance, equipment installation, and contract terms.
The CIDs require these companies to disclose documents about how they track changes to electricity bills used to calculate savings claims, warranties, service plans, marketing materials, contracts, and sales-rep compensation and scripts. Read the official announcement on the Texas Attorney General’s website.
Nine business days after being named in the AG Paxton investigation, Freedom Forever, LLC filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the District of Delaware (lead case 26-10522). The company listed estimated assets of $100 million to $500 million against estimated liabilities of $500 million to $1 billion. Its largest creditor is the solar finance company Mosaic Funding, owed approximately $114 million.
Freedom Forever was the second-largest U.S. residential solar installer in 2025, with roughly 6.1% of the national residential market and nearly 2 GW of installed capacity across 35 states, Puerto Rico, and Washington, D.C. according to industry tracking by Wood Mackenzie. The company also did business under the trade name “Freedom Solar.”
For Texas homeowners with a Freedom Forever contract, the bankruptcy creates several distinct concerns:
Beginning September 1, 2026, residential solar retailers AND individual solar salespeople must be registered with the Texas Department of Licensing and Regulation. The registration process includes background information, insurance requirements, and ongoing compliance obligations. Texas-licensed electrical contractors who already engage in solar retail are exempt from the new registration requirement, but they remain subject to most other SB 1036 obligations and to disciplinary action by TDLR.
For homeowners, this means: solar contracts signed on or after September 1, 2026 should be from companies and salespeople who appear in the TDLR registration system. Homeowners can verify a company’s or salesperson’s registration on the TDLR website.
§1806.201 — the section that lists prohibited acts (intentional misrepresentation, falsely implying utility or government affiliation, ignoring no-soliciting signs, allowing unlicensed installation, etc.) — becomes administratively enforceable on September 1, 2026. TDLR can take disciplinary action and impose civil penalties for violations.
Whether the homeowner is inside the five-day SB 1036 cancellation window, has a contract with one of the AG-investigated companies, has a Freedom Forever contract affected by the bankruptcy, or is just starting to consider their options, the practical first steps are similar.
Pull out the original solar contract, financing paperwork, sales emails or text messages, and any correspondence with the solar company.
If the contract was signed on or after September 1, 2025, look for the last day of the cancellation period AND the mailing or email address for cancellation. Both must be present.
practical breakdown of the guarantee may be a potential issue.
Stopping payments without legal advice may result in default, damage to credit, collections, or other consequences. Continue paying until a qualified attorney has reviewed the situation and provided specific advice
Texas Solar Cancellation Resource Center collects and organizes the homeowner’s documentation and connects qualifying homeowners to Consumer Advocacy Law Group for legal review.
TDLR accepts complaints about residential solar retailers and electrical work. The Texas Office of the Attorney General accepts consumer protection complaints. Filing a complaint is a separate process from any private legal review.
The questions below come up most often during Texas homeowner intakes about SB 1036 and the related news developments. They are general information only — they are not legal advice.
SB 1036 applies to most residential solar contracts signed on or after September 1, 2025. The law covers solar panels, solar shingles, and most residential solar energy systems. Some exemptions exist — including systems on multifamily buildings with four or more units or stories, systems on nonresidential property, systems for temporary or emergency use only, systems intended to power a single appliance, and certain small systems generating less than one kilowatt of peak output. A qualified attorney may review whether SB 1036 applies to your specific contract.
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Contracts signed before September 1, 2025 are not covered by SB 1036’s five-business-day cancellation right. However, the Texas DTPA, the Home Solicitation Transactions Act (which provides a three-business-day right to cancel for door-to-door sales), the federal Truth in Lending Act, and other Texas and federal laws may still apply. A qualified attorney may review which laws apply to your specific contract.
The federal FTC Cooling-Off Rule provides a three-business-day right to cancel certain door-to-door sales of $25 or more. SB 1036 provides a five-business-day right to cancel residential solar contracts in Texas — two days longer. SB 1036 also requires the contract to include the cancellation address; if the address is missing, the cancellation period may be extended.
These four companies received Civil Investigative Demands from the Texas Attorney General on April 3, 2026. The CIDs require the companies to provide documents to the AG’s office. Whether a homeowner with a contract from one of these companies has individual legal claims is a separate question that depends on the facts of the homeowner’s specific situation. A qualified attorney may review the contract and the homeowner’s documentation.
A Chapter 11 filing does not automatically cancel a homeowner’s contract or obligations. Payments may still be owed under the lease, loan, or PPA terms. Warranty and service obligations may be impaired. If the financing was provided by a separate lender (e.g., Mosaic, GoodLeap), that lender is a separate company and the financing relationship continues. Texas homeowners with Freedom Forever or Freedom Solar contracts should organize documentation and consider an intake review. Decisions about filing a proof of claim in the bankruptcy proceeding should be made with a qualified attorney.
Beginning September 1, 2026, residential solar retailers and individual salespeople must be registered with TDLR. Registration status will be searchable on the TDLR website at tdlr.texas.gov. Until September 1, 2026, registration is not yet required. After that date, signing with an unregistered company or salesperson may be a separate issue a qualified attorney could review.
Yes. Texas homeowners can file complaints with two state agencies. TDLR accepts complaints about residential solar retailers and about electrical contractors performing solar installation work. The Texas Office of the Attorney General Consumer Protection Division accepts complaints about deceptive trade practices. Filing a complaint is separate from — and does not substitute for — a private legal review.
No. The Attorney General’s investigation is a state regulatory action — it is not a private lawsuit on behalf of individual homeowners. Even if the AG ultimately takes legal action against any of the named companies, that action does not automatically cancel any individual homeowner’s contract. Homeowners who want their own contract reviewed for potential cancellation grounds need to pursue that separately, typically through a qualified consumer protection attorney.
Law Group reviews matters under the law applicable to each homeowner’s state.
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