Section 1 Short title
This Act may be cited as the “Sunshine on Solar Lending Act”.
Sunshine on Solar Lending Act
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.
Sec. 2 Findings
Congress finds the following:
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.
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.
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.
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.
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.
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—
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.”
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.