Cancelling a community solar contract: What's involved?

In the past, long-term contracts have been a significant barrier to widespread community solar adoption: 10, 20, or 25-year-long agreements left many hesitant to subscribe, and understandably so considering how unpredictable the future is (2020 being the BEST example).

Fortunately, this has changed: community solar contracts today are much more flexible than they used to be, and many options allow you to sign up with no commitment and opt out early for free. That said, there is still no standard for community solar cancellation policies – they can vary by project, utility, and community solar company. Hence, reviewing your community solar agreement's specific cancellation terms is essential before signing on the dotted line.

While cancellation policies can differ from one community solar project to the next, there are some common factors you can keep an eye out for. In this article, we'll review the most common details and terminology for community solar cancellation policies and discuss what to look for as you're comparing your options. 

First, check if your community solar agreement requires minimum notice when canceling your subscription. With some projects, you can cancel at any time – others will stipulate a 60-day or 90-day minimum notice for canceling your subscription. Why? Community solar companies want a heads-up before you opt out so they have enough time to find someone else to fill your vacated spot.

Often, you will still need to pay for any bill credits from your share when you ask to cancel. When your subscription ends – if you cancel your subscription on April 1st and there's a 60-day notice period, you'll likely need to pay for any bill credits that your share of the solar farm generates until May 31st.

Next, review your contract to see if the company charges any fees for canceling your subscription. Community solar cancellation fees are far less standard than they used to be, but you should watch for them just in case.  

If there happens to be a cancellation fee in your community solar agreement, expect it to be under $250 (in fact, New York State has even instituted a $200 cap for these fees to help protect community solar subscribers!) Plus, many community solar companies that include a cancellation fee will waive it under certain circumstances (e.g., if you provide sufficient notice if you're moving or find someone to take over your subscription) – more on that below.

Have a friend looking to join a community solar program? Some community solar options allow you to skirt specific minimum notice requirements or early termination fees if you find your replacement for your community solar share. The replacement you find will likely need to live in the same utility service area, agree to take over your full subscription share and meet any other requirements for the project (like a credit check). However, having a friend or neighbor take over your community solar subscription is not always an option. Some companies have an ongoing waitlist of customers seeking to join a specific project they'll tap into first, and others prefer to find new subscribers themselves.

Lastly, review your community solar agreement for any fine print around moving. If your new home is within the same utility service area, you can likely transfer your community solar subscription to your new electric utility account. But if you move further away or out of state, you will probably need to cancel your subscription and find a new community solar program to join. 

If you anticipate a move in your future, check your subscriber agreement to see if your community solar company offers more flexible minimum notice requirements or termination fees for movers; while not particularly common, the cancellation terms might be different for subscribers who are no longer customers of an eligible utility than those who cancel for other reasons. 

Want to compare community solar options in your area? Check out the EnergySage Community Solar Marketplace, where you can see a list of open community projects near you and get a quick estimate of potential savings. You can also find the cancellation terms for each project listed in its details. If there aren't community solar projects in your region yet, sign up to receive updates as new projects go live on the Marketplace.