Orphaned Solar & Installer Bankruptcy Survival Vault

Salespeople often claim that if an installer folds, your system loses all warranty protection. That is false. Under the federal Magnuson-Moss Warranty Act, equipment manufacturers must honor their written 12-to-25-year hardware warranties regardless of whether the original dealer is still operating.

Did your installer file for Chapter 7 bankruptcy after your loan funded, leaving panels sitting on your roof without Utility Permission to Operate (PTO), a failed city electrical inspection, or a non-functioning inverter? Lenders will often tell you: “We only provided the loan; you still have to pay us even if the installer went bankrupt.”

Federal law says otherwise. Under the Federal Trade Commission (FTC) Preservation of Consumers' Claims and Defenses Rule (16 CFR Part 433, known as the FTC Holder Rule), every consumer installment loan arranged by a solar dealer contains a mandatory bold-print notice stating that any holder of the credit contract is subject to all claims and defenses which the debtor could assert against the seller.

TO: [Loan Servicer Name: e.g., GoodLeap, LLC / Solar Mosaic LLC / Sunlight Financial]
VIA USPS CERTIFIED MAIL — RETURN RECEIPT REQUESTED
RE: Formal Notice of Claims and Defenses Under FTC Holder Rule (16 C.F.R. § 433.2)
Account / Loan Number: [INSERT LOAN NUMBER]
Property Address: [INSERT PROPERTY ADDRESS]

Dear Compliance & Legal Department:

Take notice that I am asserting formal legal claims and defenses against this credit contract pursuant to the Federal Trade Commission Holder Rule (16 C.F.R. Part 433), which is expressly incorporated into my solar loan agreement.

The dealer/installer that originated this loan ([INSERT BANKRUPT INSTALLER NAME]) committed material breach of contract and breach of warranty by failing to deliver a code-compliant, operational solar energy system with Utility Permission to Operate (PTO) prior to ceasing operations / filing bankruptcy.

Because the Holder Rule places the lender in the exact legal shoes of the defunct dealer:
1. I formally dispute the validity and enforceability of the balance attributable to unperformed work and non-functioning equipment.
2. Demand is hereby made to place this account in administrative forbearance with zero negative credit reporting under the Fair Credit Reporting Act (FCRA) while you either (a) fund completion/commissioning of the system via a licensed electrical contractor, or (b) cancel the disputed indebtedness.

Sincerely,
[YOUR NAME & DATE]

Solar lenders and PPA providers record a UCC-1 Financing Statement (Fixture Filing) against your county property title. Even when an installer goes bankrupt—or after you pay off a loan—an orphaned UCC-1 filing will freeze a home sale or mortgage refinance at the title company table.

1. Pull the Exact Instrument Number: Search your County Recorder's grantor/grantee index for your name to find the Secured Party of Record on the UCC-1 (it is usually a securitization trust or servicer like GoodLeap/Mosaic/Launch Servicing, not the local installer).
2. Demand a UCC-3 Termination or Subordination: Under Uniform Commercial Code § 9-513, once an obligation is satisfied or invalidated, the secured party must file or send a UCC-3 Termination Statement within 20 days of an authenticated demand. For a mortgage refinance where the loan stays active, request a short-term Lien Release & Re-filing Agreement (Subordination) (standard processing fee: $150–$250).
3. File a Statutory UCC-5 Information Statement if Dissolved: If the listed Secured Party was the bankrupt installer itself and its Chapter 7 trustee has abandoned the asset, your title company attorney can file a statutory termination/correction affidavit attaching the federal Bankruptcy Court Order of Discharge/Closure.

After every major solar bankruptcy, telemarketers buy the defunct installer's customer list and call homeowners claiming: “We took over your warranty—pay us $1,995 or $39/month to keep your system covered!” Hang up immediately.

• Never pay a monthly subscription for solar monitoring. Enphase Enlighten and SolarEdge mySolarEdge apps are 100% free for the life of the hardware.
• Use the Official OEM O&M Locator: Both Enphase (Installer Network Locator → filter by “Services Orphaned Systems”) and SolarEdge maintain directories of vetted local electrical contractors who accept direct manufacturer RMA labor vouchers.
• Benchmark Labor Rates Before Authorizing Work: A standard residential solar diagnostic truck roll and single microinverter/optimizer RMA swap should cost $195 to $350 total, or $350 to $600 for a full string inverter wall swap once the OEM warranty unit arrives at your door.