If you've read through your solar agreement, you may have noticed a section titled "Arbitration," "Dispute Resolution," or something similar, often in capital letters near the end. Most residential solar leases, power purchase agreements, and loans include one.
That clause shapes how a dispute with the solar company or lender will be handled. Here's what arbitration is, how it works, and what homeowners should know.
Arbitration in plain English
Arbitration is a private process for resolving disputes. Instead of a public trial before a judge and jury, both sides present their positions to a neutral person, the arbitrator, who reviews the evidence and makes a decision, called an award.
A few key features:
- It's private. Proceedings and outcomes are generally not public records.
- It's usually binding. In most consumer arbitrations, the arbitrator's decision is final, with very limited ability to appeal.
- It's often remote. Many hearings happen by video or phone, and smaller cases may be decided on written submissions alone.
- It's governed by rules. Most solar agreements name an arbitration provider, such as the American Arbitration Association (AAA) or JAMS, and their consumer rules control the process.
Why solar agreements include arbitration clauses
Businesses generally prefer arbitration because it's private, often faster than a traditional public process, and limits group proceedings. For consumers, arbitration can have advantages too: it's typically less formal, it can move faster, and under major providers' consumer rules, the business usually pays most of the provider's fees.
Whether arbitration is good or bad for you depends on your situation. But if your agreement requires it, it's usually the path a contested dispute will follow.
What's in a typical solar arbitration clause
When we review an arbitration clause, we look for:
- The provider and rules. Which organization administers the arbitration, and which set of rules applies (for example, consumer rules).
- Location. Where any in-person hearing would take place. Consumer rules often favor the consumer's home area or remote hearings.
- Fees. Who pays filing fees, arbitrator compensation, and other costs.
- Opt-out window. Some agreements let you opt out of arbitration by sending written notice within a set period after signing, often 30 days. Most homeowners never know this window existed.
- Individual claims only. Many clauses require each homeowner to bring an individual claim rather than join with others.
- Small-dispute exceptions. Some clauses let either side bring small disputes in a different forum.
- Informal dispute steps. Many require you to send a written notice of dispute and wait a set number of days before filing.
How the process works, step by step
1. Notice and negotiation. Most agreements require a written notice describing the dispute and the resolution sought, followed by a period to try to resolve it informally. In practice, a well-documented formal demand often leads to negotiation, and many disputes settle at this stage.
2. Filing. If negotiation fails, a claim is filed with the arbitration provider. The filing describes the dispute and what's being requested. Under many consumer fee schedules, the consumer pays a limited filing fee and the business pays the rest of the provider's fees. Check the current fee schedule for the provider named in your agreement.
3. Selecting the arbitrator. The provider supplies a list of neutral arbitrators, often experienced professionals or retired judges, and the parties select one according to the rules.
4. Preliminary conference. A short call to set a schedule, decide what documents will be exchanged, and plan the hearing.
5. Exchange of information. Each side shares relevant documents. In solar cases, that often includes the agreement, sales materials, the electronic signature audit trail, installation and inspection records, utility interconnection records, production data, and bills.
6. The hearing. Each side presents evidence and explanations. Witnesses may testify, often by video. Smaller cases may be handled entirely in writing.
7. The award. The arbitrator issues a written decision, usually within a set number of days after the hearing. Awards in consumer cases are generally final and enforceable.
How long does solar arbitration take?
It varies. Many disputes resolve during the notice and negotiation phase, which can take weeks to a few months. A case that proceeds through a full arbitration commonly takes several months to a year or more, depending on the provider's caseload, the complexity of the case, and scheduling.
What can an arbitrator decide?
An arbitrator can generally award the kinds of relief available under the contract and applicable law. In solar disputes, outcomes may include cancellation of the agreement, refunds or credits, reduced amounts owed, or other remedies. An arbitrator can also rule against the homeowner. Results depend entirely on the facts, the agreement, and the law.
Separately, many disputes end in a negotiated settlement before an award, which may include a reduced buyout, removal of the system, repairs, or adjusted payments.
Do I need someone to represent me?
Consumers are generally allowed to represent themselves in arbitration. But arbitration is a formal process with rules, deadlines, and evidence requirements, and the solar company will almost certainly have experienced professionals on its side.
At Solar Resolution Group, we are not a law firm and do not represent homeowners in arbitration. When a case is headed toward a formal demand or arbitration, it's handled by independent, licensed counsel that the homeowner chooses to retain. We support that process by organizing documents, building a clear timeline, and keeping the homeowner informed.
What homeowners can do now
- Find your arbitration clause and note the provider, the rules, and any opt-out deadline.
- Organize your evidence: the agreement, proposal, bills, monitoring data, photos, and any messages with the sales rep.
- Write a timeline of key dates: the sales visit, signing, installation, inspection, activation, and every problem since.
- Keep making your payments.
For more background, see whether you can cancel a solar contract after installation and the signs a solar contract was misrepresented.
Key takeaways
- Arbitration is a private, usually binding way to resolve disputes, and most solar agreements require it.
- Hearings are often remote, and businesses usually pay most provider fees under consumer rules.
- Many cases resolve through negotiation before an award.
- Preparation and documentation matter. Results vary.
Every agreement and every situation is different. Results vary, and no one can promise a specific outcome.
This article is general information, not legal advice. Laws and utility rules change, and your situation may differ. Solar Resolution Group is not a law firm.