Bill Summary
The "Sunshine on Solar Lending Act" is a proposed amendment to the Truth in Lending Act aimed at enhancing transparency in solar financing transactions. Its primary purpose is to require creditors involved in these transactions to disclose any dealer fees associated with solar energy system financing, which can include costs related to the installation of solar panels, battery storage systems, and other relevant services.
Key provisions of the Act include:
1. **Disclosure Requirements**: Creditors must clearly disclose in writing all fees associated with the solar financing transaction, including any dealer fees charged by third parties. This is intended to ensure consumers are fully informed about the total costs involved.
2. **Comparison of Costs**: Creditors are also required to provide a comparison of the financed amount against the total cash prices for the products and services involved, including installation and maintenance.
3. **In-Person Transactions**: For transactions negotiated in person, consumers must receive a paper copy of these disclosures.
4. **Prohibition of Arbitration Clauses**: The Act prohibits the inclusion of mandatory arbitration clauses in solar financing agreements, allowing consumers to pursue legal action in court rather than being limited to nonjudicial resolutions.
The Act is designed to address the lack of transparency that has historically characterized solar financing, ensuring consumers can make informed decisions when financing solar energy systems. It will take effect within 60 days of enactment and apply to all relevant transactions entered into thereafter.
Possible Impacts
The "Sunshine on Solar Lending Act" has several implications for individuals involved in solar financing transactions. Here are three examples of how this legislation could affect people:
1. **Increased Transparency for Consumers**: Homeowners seeking to finance solar energy systems will benefit from clearer disclosures regarding dealer fees and other charges. This increased transparency means consumers can better understand the total cost of financing, including any additional fees they may incur, allowing for more informed decision-making. This could lead to homeowners selecting financing options that are more favorable and potentially less costly.
2. **Greater Accountability for Creditors and Installers**: The requirement for creditors to disclose all fees related to solar financing transactions places an obligation on both lenders and solar installers to be more accountable in their pricing practices. This could help reduce instances of hidden fees and misleading sales tactics, ultimately protecting consumers from inflated costs and ensuring a fairer marketplace for solar energy systems.
3. **Enhanced Consumer Rights and Protections**: By prohibiting mandatory arbitration clauses in solar financing transactions, the legislation strengthens consumer rights by allowing individuals to pursue legal action in case of disputes. This could deter creditors from engaging in unfair practices, knowing that consumers have the option to seek redress through the judicial system, thus enhancing overall consumer protection in the solar financing sector.
[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4489 Introduced in House (IH)]
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119th CONGRESS
1st Session
H. R. 4489
To amend the Truth in Lending Act to require certain creditors to
disclose dealer fees in solar financing transactions, and for other
purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
July 17, 2025
Mr. Castro of Texas (for himself and Ms. Norton) introduced the
following bill; which was referred to the Committee on Financial
Services
_______________________________________________________________________
A BILL
To amend the Truth in Lending Act to require certain creditors to
disclose dealer fees in solar financing transactions, and for other
purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Sunshine on Solar Lending Act''.
SEC. 2. FINDINGS.
Congress finds the following:
(1) Homeowners are increasingly installing solar energy
systems, including battery storage systems and other related
systems, to reduce electricity costs and maintain power during
grid outages.
(2) The high upfront cost of purchasing and installing
solar energy systems often requires consumers to obtain
financing, typically through loans or leases facilitated by
solar installers and originated by third-party creditors.
(3) Solar financing arrangements are frequently marketed by
third-party sales representatives or installers who partner
with creditors to offer loans at the point of sale. In some
cases, these arrangements include dealer fees that are not
clearly disclosed to consumers, leading to inflated financing
costs and a lack of transparency regarding the true cost of
credit.
(4) The ``Seller's Point'' exemption under Regulation Z is
sometimes improperly used to exclude dealer fees from the
calculation of the finance charge in solar financing
transactions. The use of this exemption has led to confusion
and inconsistent treatment of such fees, particularly in
transactions involving third-party financing and indirect
compensation structures.
(5) The Truth in Lending Act applies to creditors, as
defined in the Act, that offer or extend credit for solar
energy systems. All such creditors are required to comply with
the disclosure and consumer protection provisions of the Act.
(6) This Act is necessary to clarify and reinforce the
application of the Truth in Lending Act to solar financing
transactions, ensure consistent treatment of dealer fees as
finance charges where applicable, and promote transparency and
accountability in credit transactions related to solar energy
systems.
SEC. 3. DISCLOSURE OF DEALER FEES IN SOLAR FINANCING TRANSACTIONS.
Section 106 of the Truth in Lending Act (15 U.S.C. 1605) is
amended--
(1) in subsection (a), by adding at the end the following:
``(7) in any consumer credit transaction for solar
financing, as defined in subsection (h), any seller's points or
other charges imposed by the creditor upon a noncreditor seller
for providing credit to the consumer or for providing credit on
certain terms.''; and
(2) by adding at the end the following:
``(g) Disclosure of Dealer Fees for Solar Financing Transactions.--
``(1) In general.--A creditor for a solar financing
transaction shall clearly and conspicuously disclose in writing
to the consumer--
``(A) any fee charged to a third party by the
creditor relating to the solar financing transaction;
``(B) any fee imposed directly or indirectly by the
creditor or a third party, that is payable directly or
indirectly by the consumer, relating to the solar
financing transaction;
``(C) the identification of any third party that is
a party to the solar financing transaction; and
``(D) a comparison of the amount financed by the
solar financing transaction, including the amount of
any finance charges with--
``(i) the total cash price for each product
obtained by the consumer through the solar
financing transaction, including infrastructure
and labor costs; and
``(ii) the total cash price for each
service obtained by the consumer through the
solar financing transaction, including
maintenance and repair costs.
``(2) In-person transactions.--With respect to a solar
financing transaction negotiated (in part or in whole) with the
consumer in person, a creditor or third party (as applicable)
shall provide the consumer with a paper copy of the disclosures
described in paragraph (1).
``(3) Arbitration.--A solar financing transaction may not
include terms which require arbitration or any other
nonjudicial procedure as the method for resolving any
controversy or settling any claims arising out of the
transaction.
``(h) Solar Financing Transaction Defined.--In this section, the
term `solar financing transaction' means a consumer credit transaction
to finance the purchase, installation, or associated costs of a solar
energy system, including solar panels, inverters, battery storage
systems, electric vehicle charging stations, and any related
infrastructure required for the operation of such solar energy
system.''.
SEC. 4. EFFECTIVE DATE; APPLICABILITY.
This Act and the amendments made by this Act shall take effect not
later than 60 days after the date of the enactment of this Act and
shall apply with respect to a solar financing transaction (as defined
in subsection (h) of section 106 of the Truth in Lending Act (15 U.S.C.
1605), as added by this Act) entered into on or after such effective
date.
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