Solar Panels Are Common in South Florida. So Is the Debt That Comes With Them.
Florida ranks among the top states for residential solar installations. Homeowners across Miami-Dade, Broward, and Palm Beach counties have added panels to cut electricity costs. But solar energy does not come free. Most households finance it through a loan, a lease, or a Property Assessed Clean Energy (PACE) program. When financial trouble hits, those solar obligations become part of a much bigger picture.
This post explains how different types of solar financing behave inside a Florida bankruptcy case. It is general education, not legal advice for your specific situation. Every household's finances are different, and many variables affect what happens in any given case.
Three Ways People Finance Solar Panels
Before diving into bankruptcy rules, it helps to understand the three main financing structures:
Solar loan. The homeowner borrows money to purchase the panels outright. The panels become personal property or a fixture attached to the home. The lender may or may not record a lien against the real property.
Solar lease or power purchase agreement (PPA). The homeowner never owns the panels. A solar company installs them and charges a monthly fee for the electricity they produce. The company retains ownership of the equipment.
PACE financing. A government-sponsored program that funds energy improvements and collects repayment through the property tax bill. PACE assessments attach directly to the real estate, similar to a tax lien, and they typically take priority over other mortgage liens.
Each structure creates a different legal relationship, and bankruptcy treats them differently.
Solar Loans in a Chapter 7 Case
Chapter 7 is a liquidation bankruptcy. Most filers keep their exempt property. Florida law offers a powerful homestead exemption for your primary residence, with no dollar cap, though acreage limits apply (half an acre inside a municipality, up to 160 acres outside one). A trustee appointed by the court reviews non-exempt assets.
If the solar loan is unsecured, meaning no lien was recorded against your home or the panels, it may be dischargeable in Chapter 7 along with other unsecured debts like credit cards. A discharge wipes out your personal obligation to repay that debt.
If the solar loan is secured by a recorded lien, the lien survives discharge even if your personal liability is eliminated. That means the lender could still pursue the collateral. Homeowners who want to keep the panels would generally need to either reaffirm the loan or negotiate with the lender.
Chapter 7 also requires passing a means test. Your household income is compared to Florida's median income for your household size. If your income is above the median, additional calculations determine eligibility. A credit counseling course from an approved agency is required before filing.
Solar Leases and PPAs: The Equipment Is Not Yours
A solar lease is not really a debt in the traditional sense. The solar company owns the panels on your roof. When you file bankruptcy, the lease becomes an executory contract, a contract where both sides still have obligations to perform.
In Chapter 7, the trustee decides whether to assume (keep) or reject (walk away from) an executory contract. If the trustee rejects the lease, the solar company may have the right to remove its equipment. If you want to keep the panels and the lease, the trustee would need to assume it, or you may be able to negotiate to keep it as part of your case.
In Chapter 13, you have more control. Chapter 13 is a three-to-five year repayment plan confirmed by the bankruptcy court. You can propose to assume or reject the solar lease as part of your reorganization plan. Many filers who want to stay in their home and keep their solar agreement find Chapter 13 gives them more flexibility. See our overview of how Chapter 7 and Chapter 13 compare on timeline and outcomes for more context.
One practical note: some solar leases include assignment restrictions or early termination penalties. Those contract terms do not disappear in bankruptcy, but bankruptcy law governs how they are treated.
PACE Loans: A Special and Serious Problem
PACE financing is treated very differently from a regular loan. Because repayment runs through the property tax bill, PACE assessments attach to the real estate itself. They are not ordinary unsecured debt.
In bankruptcy, a PACE lien generally cannot be stripped away simply by filing. It stays with the property. If you are behind on your PACE assessment, those arrears may need to be addressed in a Chapter 13 plan much like mortgage arrears. Failing to deal with a PACE lien can put your homestead at risk, because PACE lenders have argued priority rights that can complicate even a protected homestead.
If you have a PACE loan, it is especially important to understand how it interacts with your first mortgage and Florida's homestead exemption before making any decisions.
The Automatic Stay and Solar Creditors
When a bankruptcy case is filed, the automatic stay (11 U.S.C. 362) goes into effect immediately. Filing triggers the automatic stay, which generally pauses collection actions, lawsuits, and most creditor contact while the case is open. This applies to solar lenders just like any other creditor.
However, the automatic stay has exceptions and does not last forever. A secured solar lender can ask the court for relief from the stay if the collateral is not being protected or if payments are not being made. Repeat filings within a short period can also limit how long the stay applies. For a plain-language overview, see our post on the automatic stay explained.
Schedules, Disclosure, and the 341 Meeting
Every bankruptcy filer must list all debts and assets accurately on court schedules. That includes solar loans, leases, and PACE assessments. Omitting a debt or an obligation is a serious problem and can lead to the denial of a discharge.
About a month after filing, filers attend the 341 meeting of creditors. In the Southern District of Florida, which covers Miami, Fort Lauderdale, and West Palm Beach, these meetings are routinely held by video or phone. The trustee may ask about your solar financing, especially if it involves a lien on the home or a lease agreement.
What Happens to the Panels Physically?
In a Chapter 7 where the panels are owned outright and the loan is unsecured, the panels stay on your roof. There is no one with a security interest to repossess them.
If the loan is secured or if a lease is rejected, the lender or solar company may seek to recover the equipment. Removal of roof-mounted panels is complicated and costly, so outcomes vary. What the law allows and what actually happens in practice are not always the same thing. Past results do not predict future outcomes.
Key Takeaways for Florida Homeowners
- Solar loans may be unsecured or secured. Treatment in bankruptcy depends on whether a lien was recorded.
- Solar leases are executory contracts. The trustee, or you in Chapter 13, must decide whether to assume or reject them.
- PACE assessments attach to real property and require careful attention in any bankruptcy case.
- Florida's homestead exemption is powerful but does not automatically eliminate recorded liens or PACE assessments.
- Before filing, a debtor must complete credit counseling from an approved agency. Before discharge, a debtor education course is also required.
- Attorney fees, court costs and filing fees are explained in writing before any case begins.
Solar debt is manageable in bankruptcy, but the type of financing matters enormously. Understanding the structure of your solar agreement is the first step toward knowing your options.
Wondering if a fresh start fits your situation?
Attorney fees, court costs and filing fees are explained in writing before any case begins. Take the free 2-minute case review or call Recalde Law Firm at (305) 792-9100.