Solar contractsNovember 20267 min read

The solar dealer fee: the hidden markup in financed solar

Short answer: A dealer fee is money a solar lender charges the installer in exchange for a low advertised interest rate. The installer usually builds it into the price you borrow, so the loan is bigger than the cash price, and the fee isn't counted in the stated APR. The federal consumer bureau found these fees often add 30% or more above the cash price, and at a home sale they show up in the loan payoff.

Selling or buying a home with a financed solar system? Upload the contract and see the price, payments and payoff in one place.

What is a solar dealer fee?

Solar loans are often sold with eye-catching rates like 0.99% or 1.99%. Lenders pay for that low rate by charging the installer an upfront fee. The installer then raises the system price for customers who finance, so the homeowner ends up paying the fee inside the loan.

In an August 2024 report, the Consumer Financial Protection Bureau (CFPB) said these dealer fees "often increase the loan cost by 30% or more above the cash price" of a solar project. The bureau also found that lenders frequently put the fee into the loan principal without including it in the stated APR, and rarely separate it clearly from the cash price.

Put simply: two neighbors buy the same panels from the same company. One pays cash. The other finances. The second neighbor's contract price can be thousands of dollars higher, and the interest rate on the paperwork won't show why.

Why does the dealer fee matter in the West?

The lenders named in the best-known dealer fee case lend across many states, the West included. GoodLeap, for example, is a California-based solar lender. So a homeowner in Phoenix, Las Vegas or Salt Lake City can be holding the same kind of loan that regulators have questioned elsewhere.

In March 2024, Minnesota's attorney general sued four solar lenders, GoodLeap, Sunlight Financial, Solar Mosaic and Dividend Solar Finance, over what the office called about $35 million in hidden fees on nearly 5,000 loans. The complaint says most of the fees raised borrowers' costs by 15% to 30%. The case is in Minnesota, but the loan model it describes isn't limited to Minnesota.

California lawmakers looked at the issue too. Senate Bill 784 would have required home improvement lenders to disclose the dealer fee in writing before signing. It was held in committee in August 2026 and hasn't become law.

What does a dealer fee cost? A worked example

Here's simple loan arithmetic with made-up round numbers. It isn't a quote and it isn't how any one company prices.

Say a system's cash price is $30,000. The lender offers 1.99% for 25 years, with a dealer fee equal to 25% of the loan. To net the installer $30,000, the loan has to be $40,000. The fee is $10,000.

Item	Amount
Cash price	$30,000
Loan amount with the fee	$40,000
Dealer fee	$10,000
Monthly payment (1.99%, 25 years)	About $169
Total of payments	About $50,800
Effective rate on the $30,000 cash price	About 4.65%
Loan balance after 5 years	About $33,500

Two things jump out. First, the true cost of borrowing is closer to 4.65% than 1.99%, once you measure against the cash price. Second, after five years of payments, the balance is still above the original cash price. That's the number that lands on a seller's settlement statement.

A low-rate loan with a fee isn't always worse than a higher-rate loan with no fee. Compare the total of payments on the same cash price. Our solar dealer fee calculator runs that math in your browser.

Where does the dealer fee show up in the paperwork?

Sometimes it's a line in the loan documents. Often it's only visible as a gap between a cash price and a financed price. And sometimes it doesn't appear at all. The Minnesota complaint says the fees were left out of sales proposals and loan disclosures.

Things to look for in the contract and loan file:

Two prices. A "cash price" and a "financed price" or "contract price." The difference is usually the fee.
Price per watt. Divide the amount financed by the system size in watts. A financed price far above local cash prices is a clue.
The Truth in Lending disclosure. Compare the "amount financed" with the system price on the installation contract.
A tax-credit prepayment. Many loans assume a lump-sum paydown equal to the federal credit. The CFPB warned that if the credit doesn't come through, payments can jump. The federal residential credit ended for systems installed after December 31, 2025, so newer contracts that still assume it deserve a hard look.

How does a dealer fee affect a home sale?

A solar loan usually has to be paid off or assumed when the house sells. Because the fee is in the principal, it's in the payoff too. The seller pays it back out of the sale proceeds, often without ever knowing it was there.

The fee also skews the numbers buyers and appraisers see. A system financed at $40,000 looks like a $40,000 asset. Its cash value may be closer to $30,000. If a loan lien or fixture filing is recorded, our post on UCC-1 solar filings explains how it gets cleared at closing.

Sellers can ask the lender for a written payoff early, before listing. Buyers can ask for the original contract, the loan disclosure and the current balance. An experienced agent who has closed solar homes will usually ask for all three on day one, because surprises found in week five are the expensive kind.

Quick tips: dealer fees and your solar loan

ContractBefore you sign, ask for the cash price in writing next to the financed price. The gap between them is usually the fee.
ContractCompare loans by total of payments on the same system, not by the APR alone.
Monthly billCheck whether your loan payment assumes a tax-credit paydown. If it does, write down the deadline and what the payment becomes if you skip it.
Monthly billAdd your solar loan payment to your utility bill each month. That total, not either bill alone, is what your power really costs.
Home saleAsk the lender for a written payoff statement and whether the loan can be assumed before you list, not after you're in escrow.
UpkeepOpen the monitoring app once a month. The loan payment stays the same even when production drops, so catch problems early.

How can RateMySolar help?

Upload the solar contract and we lay out the price, payments, payoff and transfer terms next to published local data. The report covers five areas, from contract terms to financial value; How we grade describes what each one looks at. For a step-by-step checklist, see how to review a solar contract before a home sale.

Your first upload is free and gives you a locked preview of the report. The full graded report is $49.99 per contract and includes the MLS solar fields and remarks.

Our reports are AI-assisted and only partly reliable, so check them against the contract and have the contract reviewed before closing. A report is information, not legal, financial or tax advice.

How does this work in other states?

Dealer fees come from how national solar lenders price their loans, so they can turn up in any state. What differs is how far regulators have gone. Here's what our research found as of November 2026.

Where	Dealer fee action
All states (federal)	CFPB report (Aug. 2024) flagged dealer fees left out of the APR and markups over the cash price
California	SB 784 would have required written dealer fee disclosure; held in committee Aug. 2026, not law
Minnesota	Attorney general sued GoodLeap, Sunlight, Mosaic and Dividend (Mar. 2024) over about $35 million in hidden fees
Arizona, Nevada, Texas, Utah, Colorado	No dealer-fee-specific disclosure law found; general solar-sales and consumer laws apply
Florida, North Carolina, New Jersey, Massachusetts, New York	No dealer-fee-specific disclosure law found; general solar-sales and consumer laws apply

Laws change, and many states have their own solar sales rules on cancellation rights and contract disclosures. Find yours on our solar laws by state page, or go straight to California, Arizona, Nevada or Texas. Your state attorney general's consumer office is the place to report a problem.

Frequently asked questions

What is a dealer fee on a solar loan?

It's a fee a solar lender charges the installer in exchange for offering a low interest rate. The installer usually adds it to the price the homeowner borrows, so the loan is larger than the cash price.

How big are solar dealer fees?

The CFPB said in 2024 that dealer fees often raise the loan cost by 30% or more above the cash price. Minnesota's attorney general alleged most fees in its case raised costs by 15% to 30%.

Is the dealer fee included in the APR?

Often not. The CFPB found lenders frequently put dealer fees into the loan principal without including them in the stated APR, so the true cost of borrowing is higher than the rate suggests.

Do I pay the dealer fee back when I sell my house?

If the solar loan is paid off at closing, yes, in effect. The fee is part of the loan balance, so it's part of the payoff the seller covers from the sale proceeds.

How can I tell if my solar loan has a dealer fee?

Compare the cash price with the amount financed, check the price per watt against local cash prices, and read the Truth in Lending disclosure. A big gap between the cash and financed price usually points to a fee.

Does California require dealer fee disclosure?

Not as of November 2026. Senate Bill 784 would have required lenders to disclose dealer fees in writing, but it was held in committee in August 2026.

Sources

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