The FTC Holder Rule: What It Actually Gets You When Your Solar Installer Is Gone

Here is the one sentence worth remembering: when your installer sold you a solar loan, the company that now holds that loan can be held responsible for what the installer did wrong. Not maybe. That is federal law, and it does not go away because the installer went bankrupt.

It also does not work the way most homeowners hope it will. This is the honest version.

What the rule actually is

Almost no residential solar company lends its own money. The installer sells you the system, then hands you paperwork for a separate lender, GoodLeap, Mosaic, Dividend, Sunlight, or one of a handful of others that fund solar loans nationwide. That structure has a name in federal law: a seller-arranged purchase-money loan. And a rule from the Federal Trade Commission, 16 C.F.R. Part 433, says that whoever ends up holding that loan, the original lender, a bank that bought it, a servicer collecting your payments now, inherits the same claims and defenses you had against the installer that sold you the system.

In plain terms: if the installer misrepresented your savings, walked away from an unfinished job, or breached the contract, you are not limited to suing a company that no longer exists or has nothing left to take. You can raise the same claim against whoever is collecting your monthly payment today. The lender’s own bankruptcy does not change this either; when Solar Mosaic, one of the largest solar lenders in the country, filed for bankruptcy in 2025, the loans themselves did not evaporate, and neither did the Holder Rule protection attached to them. Someone still holds each loan. That someone still answers for the installer’s conduct.

Where it actually stops

This is the part sales-adjacent websites tend to skip, and it matters more than the part above.

Your recovery under the Holder Rule is capped at the amount you have actually paid on the loan. Not the full contract value, not what you were promised in savings, not what it would cost to fix the system. What you have paid, and no more. If you are three years into a twenty-year loan, that ceiling is real and it is low.

The rule is also not self-executing. Nothing happens automatically. You do not invoke it and receive a refund. Asserting a Holder Rule claim is a legal step, typically a formal demand to the loan holder, sometimes a complaint through a regulator, sometimes representation by a consumer attorney, and most solar loan contracts include an arbitration clause that keeps the dispute out of court entirely. None of that makes the rule worthless. It means the rule is leverage, not a button.

One more distinction worth holding onto: the entity holding your loan and the company servicing it, taking your calls, sending your statements, are frequently different businesses, and the loan can be sold more than once over its life. Your claim follows the loan to whoever holds it now, even if that is not the name on your first year of statements.

Where this fits if your installer just went bankrupt

If you found your way here after your installer disappeared, this is one piece of a larger picture. We cover the full recovery sequence, in order, in our orphaned-system guide, and the mechanics of what a bankruptcy filing does and does not touch in our companion piece. The short version: keep paying your loan regardless of what follows below. Stopping payment does not punish the installer. It damages your credit and adds a second problem to the one you already have.

Inside California specifically, the Holder Rule sits alongside two other partial-recovery paths: a bankruptcy proof of claim, which puts you in line as an unsecured creditor for often a small fraction of what you’re owed, and a claim against the contractor’s license bond, currently $25,000, held by every licensed California contractor and filed directly with the surety, not the state board. Residential homeowners get priority against that bond, but it is a single pool shared by everyone claiming against the same failed contractor, and it exhausts fast. None of these three paths is a full recovery on its own. Together they are the realistic menu, and the Holder Rule is generally the strongest of the three for anyone who financed through a loan.

How you would actually use it

Start by identifying who currently holds and who currently services your loan; they are not always the same, and your statements or a phone call will tell you. Write down, in plain terms, what the installer did or promised that turned out to be false or unfinished, and gather whatever documentation supports it: your original proposal, the contract, any savings projections, photos if the work itself was the problem.

From there, this becomes a legal step rather than a do-it-yourself one. A consumer attorney can send a formal demand to the loan holder and knows how the arbitration clause in your contract affects your options. You can also file a complaint with the Consumer Financial Protection Bureau, which requires the company to respond. One honest caution here: the CFPB itself has been in the middle of a significant internal reorganization since early 2025, with reduced staffing and changes to how it processes incoming complaints, so treat a CFPB complaint as a documented record and a point of pressure, not a fast or guaranteed path to a resolution the way it might have been a few years ago.

The bottom line

The Holder Rule is real, it applies to the great majority of solar financing arrangements, and it survives both the installer’s bankruptcy and the lender’s. It is also capped, not automatic, and often funneled into arbitration rather than court. Know that it exists, know its real ceiling, and if real money is involved, put the actual asserting of the claim in the hands of someone who does this for a living. This page is general information, not legal advice for your specific contract.