Your South Dakota Solar Contract Is Costing You More Than You Were Told. Here's How to Fix It.
The short version: Most South Dakota solar leases have an escalator clause. It raises your payment 2.9% every year. Over 25 years, a $150 payment grows to more than $300. If your solar panels aren't saving what you were told, you have real rights. Start with a free Solar Relief Assessment to see what's actually in your contract.
South Dakota has some of the lowest electricity rates in the country. No state income tax. No state solar tax credit. So when a solar salesperson told you the panels on your roof would "pay for themselves," the question is simple: pay for themselves against what?
The savings margin in South Dakota is razor-thin. Your utility rates are already low. The only incentive backing your system is the federal tax credit. And if your salesperson built a savings projection on anything beyond that, the numbers were wrong before you signed.
Your payments are going up. Your savings aren't coming through. And the company that knocked on your door and made those promises? They might not exist anymore. More than 100 solar companies filed for bankruptcy in 2024 alone, according to SolarInsure. Sunnova - one of the largest residential solar companies in the country - filed Chapter 11 in June 2025. SunPower filed Chapter 11 in August 2024 and was acquired by Complete Solaria.
If you're a South Dakota homeowner and the solar math isn't adding up, there's a reason for that.
What's actually in your South Dakota solar contract
Here's what most South Dakota homeowners don't find out until they've been paying for a year or two: the deal you signed isn't the deal you were sold.
Your salesperson told you solar would lower your electric bill. But did they mention the escalator clause buried in your lease agreement? That's the line that raises your payment every year - by as much as 2.9%. On a 25-year lease, that turns a $150 monthly payment into more than $300!
Did they mention what South Dakota's hail, blizzards, and extreme temperature swings do to solar panels? Panel damage from severe weather reduces performance. But your contract payments don't stop for weather. If your salesperson skipped this part, you weren't getting the full picture.
Did your salesperson tell you what happens if your solar company goes bankrupt? SolarInsure counted more than 100 solar company bankruptcies in 2024. SunPower filed Chapter 11 in August 2024. Sunnova Energy was one of the biggest solar loan companies in the country. They filed Chapter 11 in June 2025. Titan Solar Power filed Chapter 7 in June 2024. Lumio Holdings filed Chapter 11 in September 2024. Freedom Forever filed Chapter 11 on April 15, 2026. Pink Energy shut down in October 2022. Vision Solar filed Chapter 7 in December 2023. When any of these companies goes bankrupt, your payments don't stop. Your contract doesn't cancel. But your warranty usually disappears.
Your rights under South Dakota law
South Dakota gives you real legal protections. Here's what your salesperson almost certainly didn't explain.
Your 3-day cancellation window. If a solar salesperson came to your home and you signed the contract there, federal law (the FTC Cooling-Off Rule) gives you 3 business days to cancel with no penalty. If your salesperson didn't tell you about this right - and most don't - that affects the enforceability of your agreement. Pull out your contract. If there's no cancellation notice on the front page, that's your answer.
South Dakota's Deceptive Trade Practices Act. SDCL §37-24-6 prohibits deceptive acts and practices. If your solar company made misleading claims about savings, performance, or contract terms, this statute applies. The South Dakota Attorney General's Consumer Protection Division investigates complaints.
No state solar tax credit - and no state income tax. South Dakota doesn't offer a state solar tax credit. It doesn't have a state income tax at all. That means the financial case for your system relied entirely on the federal credit and utility offset. If those numbers were inflated, the deal never made financial sense in the first place. Did your salesperson explain this, or did they let you assume there were state incentives backing the math?
Low electricity rates working against you. South Dakota's electricity rates are below the national average. That means the savings margin between your utility bill and your solar payment was thin from the start. If your salesperson projected big savings against rates that were already low, the math never worked.
The loan law question for South Dakota homeowners. Did you finance your solar system instead of leasing it? Look at your loan closely. Most solar loans have a dealer fee hidden in the balance. These fees usually run 15 to 30 percent of the loan. The federal Truth in Lending Act says every fee must be shown clearly. A hidden fee can be a federal violation. You're paying interest on money that went to the solar company's profit. Not to your panels.
What you can do right now
You don't have to figure this out alone. Here are the first steps for South Dakota homeowners.
File a complaint with the South Dakota Attorney General. Go to https://consumer.sd.gov/complaintform.aspx. Or call 605-773-4400. Filing is free. The AG's office reads every complaint.
Compare what the salesperson told you to what's in your contract. In most cases, the two don't match. That gap is what makes a case.
Pull your utility bills from the last 12 months. Add up what you're paying the utility plus what you're paying for solar. Compare that to what you'd pay the utility alone. If the numbers don't work, that's a real gap — not just a feeling.
Find the escalator clause and the dealer fee in your contract. These two lines cause the biggest gap between what you were sold and what you're paying. You can spot both by reading your own paperwork.
Every contract is different. But the first step is the same for everyone. Understand what you signed. Solar Home Advocate built the free Solar Relief Assessment for this exact moment. Someone walks through your contract with you in plain English. They tell you your options.
You Signed a Solar Contract in South Dakota. Find Out What It's Actually Costing You.
South Dakota homeowners have rights under both federal and state consumer protection law - and with no state solar tax credit and some of the lowest electricity rates in the country, your savings math deserves a hard second look. A free Solar Relief Assessment helps you understand what's in your contract, what went wrong, and what you can do about it for you and your family.
[Get free Solar Relief Assessment →](https://solarhomeadvocate.com/free-assessment?utm_source=substack&utm_medium=article&utm_campaign=state-guide&utm_content=south-dakota)Get free Solar Relief Assessment →**
No charge. No obligation. No high-pressure pitch.
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"Sal says: A 2.9% escalator clause nearly doubles your payment over 25 years. If you signed a solar contract in South Dakota, these facts hit your math and your warranty."
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Frequently Asked Questions
What are my rights if I signed a solar contract in South Dakota?
Did a salesperson come to your home? If yes, you have a 3-day right to cancel. That's under SDCL §37-24-5.2 and the federal FTC Cooling-Off Rule. South Dakota also has South Dakota Deceptive Trade Practices and Consumer Protection Act (SDCL §37-24-1 et seq.). That law covers unfair or deceptive sales tactics. You can file a complaint with the South Dakota Attorney General. Go to https://consumer.sd.gov/complaintform.aspx or call 605-773-4400. If your salesperson didn't tell you about the 3-day cancel rule, that can affect your contract.
What consumer protection does South Dakota offer solar buyers?
South Dakota uses South Dakota Deceptive Trade Practices and Consumer Protection Act (SDCL §37-24-1 et seq.) for unfair sales practices. It uses SDCL §37-24-5.2 for door-to-door sales. The federal Truth in Lending Act covers your solar loan. Call the South Dakota Attorney General's office at 605-773-4400. Or file online at https://consumer.sd.gov/complaintform.aspx.
How does the escalator clause affect my South Dakota solar contract?
Most South Dakota solar leases have an escalator clause. It raises your payment about 2.9% every year. On a 25-year lease, a $150 payment grows to more than $300. South Dakota's average electricity rate is about 13.6 cents per kilowatt-hour in early 2026. That's well below the national average of 17.45 cents. So the gap between your solar payment and your utility bill was small from the start. Utility rates haven't always gone up 2.9% a year. So your solar payment can climb faster than your would-be utility bill. Your savings shrink instead of grow.
What happens if my South Dakota solar company went bankrupt?
SolarInsure counted more than 100 solar company bankruptcies in 2024. Big names include SunPower (Aug 2024), Sunnova Energy (June 2025), Titan Solar Power (June 2024), Freedom Forever (April 15, 2026), Pink Energy (Oct 2022), and Vision Solar (Dec 2023). If your installer went bankrupt, your contract still stands. Your payments still go out. But the workmanship warranty usually dies with the company. The panel maker's warranty (often 25 years) still exists. But filing a claim without an active installer is hard.
Can I cancel my South Dakota solar contract?
Did the salesperson come to your home? Then South Dakota law gives you 3 business days to cancel. That's under SDCL §37-24-5.2 and the federal FTC Cooling-Off Rule. If those 3 days have passed, you may still have options. Did they skip the cancel notice? Did they use deceptive sales tactics? Did your loan hide fees? Any of those can open a path to cancel. It depends on your specific contract and how it was sold.
What are hidden dealer fees on a South Dakota solar loan?
Solar finance companies add dealer fees of 15 to 30 percent to your loan. They roll the fee into the principal. They don't list it separately. That means you pay interest on fee money that went to the solar company. Not to your panels. The federal Truth in Lending Act says every fee must be listed clearly. A hidden fee can be a federal violation. That's one of the strongest paths to renegotiate or exit a solar loan.
How do I file a solar complaint in South Dakota?
Go to the South Dakota Attorney General's website at https://consumer.sd.gov/complaintform.aspx. Or call 605-773-4400. Filing is free. Write down what the salesperson told you at the sale. Save your contract. Save any texts, emails, and voicemails with the installer. If you have a solar loan, keep your loan paperwork. A formal complaint creates a record. That record strengthens any legal review later.