A solar installation cancellation policy operates across two phases with very different financial exposure. Phase one is the site assessment and proposal stage, where the costs are professional time and the deposit is modest. Phase two is the post-contract stage, where equipment has been ordered, permits have been pulled, and utility interconnection has been applied for. A cancellation in phase two is expensive for everyone and your policy needs to address both phases separately.
Free solar installation cancellation policy template
[Business Name]: Solar Installation Booking and Cancellation Policy Site Assessment: A deposit of [$100 to $200] is required to confirm your site assessment appointment. This deposit applies toward your installation project if you proceed. Site assessment cancellation terms: - More than 48 hours before appointment: Full deposit refund. - Within 48 hours: Deposit retained as a site visit fee. - No-show: Deposit retained. Installation Project (post-contract): A deposit of [10 to 20% of total system cost] is required at contract signing. Project cancellation terms: - Before permit application submitted: Full deposit refund less any design fees. - After permit application, before equipment ordered: Deposit retained. Permit application fees are non-refundable. - After equipment ordered: Deposit retained plus cost of non-returnable equipment. Equipment restocking fees (typically 15 to 25%) apply. - After utility interconnection application: Deposit retained. Interconnection filing fees are non-refundable and passed to customer. If we cancel for any reason: Full deposit refund within 5 business days. Any permit or utility fees already submitted are credited toward a future project or refunded if the filing can be withdrawn. By signing this agreement, you accept these cancellation terms.
The permit cost pass-through clause
Permit costs for residential solar vary by jurisdiction from $100 to $500. Utility interconnection application fees are typically $50 to $200 but some jurisdictions charge more for larger systems. These costs are incurred early in the project timeline, often before equipment is ordered, and are non-refundable once submitted.
Your contract should include a clear clause: costs for permits and utility interconnection applications submitted prior to customer cancellation are the customer's responsibility. Include the specific fees in the contract or as a project cost disclosure so the homeowner knows what they are authorizing when they sign.
A homeowner who cancels after permits are pulled is not surprised by a $300 permit cost pass-through when the contract explicitly listed that cost. A homeowner who cancels and then discovers an unexpected charge is a homeowner who disputes it and leaves a negative review.
Equipment cancellation: the expensive phase
Solar panels, inverters, and mounting hardware are ordered per system specification. A 7.2 kW system with specific panel and inverter choices is not generic inventory. If a homeowner cancels after equipment is ordered and delivered to your warehouse, you may be holding panels and an inverter that can only be returned with a 15 to 25 percent restocking fee, if they can be returned at all.
Your contract should state clearly: equipment ordered specifically for the customer's system that cannot be returned, or that incurs a restocking fee on return, is the customer's cost in an owner-initiated cancellation. The deposit typically covers the restocking fee for standard equipment. For custom or large systems where the equipment cost exceeds the deposit, a specific equipment cost clause protects you.
Protecting the assessment stage without damaging your pipeline
The site assessment deposit should be positioned as a qualifier, not a barrier. Solar installers who frame the assessment deposit as a down payment on the project, rather than a fee, lose fewer prospects at the booking stage. The homeowners who decline the deposit and go to a free-assessment competitor were often not serious buyers. The homeowners who accept the deposit and show up for the assessment are disproportionately likely to be in the decision phase.
Track your close rate on deposited assessments versus your historical close rate on free assessments. Most solar installers who make this switch find that their close rate on deposited assessments is meaningfully higher than on free assessments, which more than offsets any reduction in total assessment volume.
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What to do when a customer cancels mid-installation
A mid-installation cancellation is rare but not unheard of. A homeowner who gets cold feet after installation has begun, or whose financial circumstances change after panels are on the roof but before the system is activated, creates a genuinely difficult situation. Partial systems cannot easily be sold to another homeowner. A half-installed system on a roof is a liability.
For mid-installation cancellations, your contract should specify that work completed is billed at the contract rate for completed stages, that materials installed remain the property of the customer, and that removal of partially installed equipment is a separate charge if requested. Most homeowners who get this far do not actually cancel, because they can see the physical progress. But having the terms in writing protects you from the rare situation where they do.
Contact your solar installation attorney or your state's contractor licensing board for jurisdiction-specific guidance on what mid-installation cancellation terms are enforceable in your market. Solar contract terms are governed by both contractor licensing law and, in some states, specific solar consumer protection regulations. What is standard practice in one state may not be enforceable in another.
