Like any industry, home solar is very competitive, and companies that manufacture solar equipment like panels, inverters, and batteries do sometimes go out of business. As a homeowner with solar, you may call your manufacturer with a service or maintenance request, only to find your solar manufacturer out of business.
What do you do when you find yourself 'orphaned' in this way? In this article, we look at why solar manufacturers stop making equipment, and how to service your solar equipment if the manufacturer is no longer around.
Why do solar equipment manufacturers go out of business?
At a time when the solar industry is booming, you may be wondering why there are bankrupt solar manufacturers. One major reason is the high cost of starting and operating a solar manufacturing company. It can cost hundreds of millions of dollars to build a manufacturing facility and develop all of the tooling and equipment needed to make solar products. Any company with high costs like that has the potential to go out of business if they can't get a good return on their investment.
In addition, rapid advances in technology mean that sometimes a new manufacturer is already obsolete before they can even start producing equipment. Even companies that have already brought products to market need to continue investing in their manufacturing capabilities to lower costs, upgrade equipment, and integrate the latest technological advances in order to stay competitive.
Another thing forcing some solar equipment companies to go out of business is how they handle claims against products with manufacturing issues or defects. Solar equipment can be complicated to produce, and businesses go into liquidation when they repeatedly face claims due to product failure, malfunctions, or workmanship issues, and cannot offer solutions. When solar equipment is still under warranty, manufacturers lose money when they have to replace products, so they try to limit the types of issues that are covered by their warranty, which can lead to unhappy customers and a bad reputation.
When a company decides to overlook consumer claims repeatedly, liabilities can accumulate fast, especially if the company is producing cheap, low-quality equipment. This is because inexpensive solutions often fail or break down faster, leaving the company with numerous replacement requests over a short amount of time. Faced with a mounting number of warranty claims and the cost associated with replacing equipment, companies may opt to declare bankruptcy instead of replacing that failed equipment.
A solar manufacturer's actions, such as bad or false advertising, may also result in a shutdown. SOLON, for example, was forced to pull a marketing campaign after realizing it was insulting potential customers, and the company filed for solar bankruptcy soon after.
The decline in solar equipment prices is yet another reason why a bankrupt solar manufacturer can’t survive, as even a small difference in price can cause a huge shift in demand. Manufacturers in the United States have struggled to compete with foreign producers when consumers aren't willing to pay a premium for "Made in the U.S.A." products, and overseas manufacturers are sometimes subsidized to help lower their price even further and knock out the competition. Unexpected changes like added tariffs can cause a sudden shift in the competitive landscape, forcing some bankrupt solar companies to go out of business when their prices go up and demand goes down.
History Of Solar Manufacturers Going Out Of Business
Though mass-market solar is a relatively new industry, the list of solar manufacturers out of business starts as early as 2009, when initial producers like OptiSolar, SV Solar, Senergen Devices, and Signet Solar exited the market.
Between 2011 and 2012, price pressure and overcapacity caused many U.S. manufacturers to cease domestic production, relocate to other countries, or declare bankruptcy. Big names like Solyndra, Stirling Energy Systems, GlobalWatt, and SolarDay are examples of producers that went out of business during this time.
Since then, the number of solar manufacturers going out of business has slowed, but companies like TSMC and Xunlight have ceased their manufacturing operations during this period.
Challenges such as poor management, subpar business practices, and mis-handled claims against their products have been among the main issues that force a solar manufacturer out of business.
Here are a few of the bigger names in solar that have gone out of business, and the reason for their struggles:
- Solyndra: Perhaps the most well-known solar bankruptcy, Solyndra was founded in 2005, and received over $700 million in venture capital funding and $535 million in guaranteed federal loans to develop a new cylindrical solar panel. Despite that large investment, Solyndra succumbed to pressure from Chinese rivals whose panel prices were lower in comparison, and never managed to bring any product to market.
- Suntech: Once one of the world's biggest solar panel manufacturers, and a leading force in China's fast-growing renewable energy industry, Suntech filed for bankruptcy in 2013 amid a slump in global solar demand, after missing a $541 million payment to bondholders.
- HelioVolt: Founded in 2001, HelioVolt aimed to fabricate CIGS (Copper-Indium-Gallium-Selenide) solar panels. However, 13 years and over $200 million in VC funding later, it still hadn't shipped any commercial products, and eventually went out of business in 2014.
- LDK Solar: Founded in 2005, LDK Solar was a Chinese company that manufactured multicrystalline solar wafers used in solar cells. At one point a publicly-traded company on the U.S. Stock Exchange, with over $3 billion in reported yearly revenue, LDK Solar filed for bankruptcy in 2016 with around $5.2 billion in liabilities.
- SolarWorld: A European manufacturer of solar panels that, for a time, had one of the largest solar manufacturing plants in the U.S. SolarWorld filed for insolvency in 2017, citing price erosion as the main reason. After a restructuring, Solar World filed for insolvency again in 2018, this time citing price dumping from China and a new 30% import tariff as the reason. SolarWorld Americas was separated from the company as part of the restructuring and was eventually acquired by SunPower in 2018.
- Suniva: The Norcross, Georgia-based producer of monocrystalline and polycrystalline solar panels filed for Chapter 11 bankruptcy in 2017. Following a reorganization, Suniva is now owned by Lion Point Capital, a New York-based investment firm.
- LG Solar: Citing "the impact of increasing material and logistics costs, as well as severe supply chain constraints affecting the solar industry" LG decided to close its solar panel business in February of 2022. Since LG as a company did not go out of business, they committed to "honor the limited warranty with each product sold in accordance with applicable regulations and contractual obligations".
What happens if my solar manufacturer goes out of business?
The good news is, if your solar equipment manufacturer goes out of business, your solar power system will continue to work as usual. Nothing will change immediately, but you may want to take some steps to protect yourself from potential issues in the future. Otherwise, you might find yourself in a dilemma if your system needs service or maintenance work.
The bad news is, if you need service or maintenance right away, it’s not going to be as simple as calling up the manufacturer and asking them to make things right. You’ll need to connect with a solar service provider on your own, and you may end up paying more for the repair. However, programs like Palmetto Protect can let you hand over the management of that maintenance project to a team of solar experts, help you save on the cost of that service, and also protect you from having to deal with future issues down the road.
Normally, the biggest change that happens if your solar manufacturer goes out of business is that your warranty stops being enforceable, unless another solar company purchases the manufacturer's assets and is ready to honor their original warranty. Some manufacturers do have insurance on their warranties that keep the solar warranty valid, even if the manufacturer goes out of business, but a situation like that can still cause headaches if you need your equipment serviced. It’s best to assume that your original manufacturer’s warranty won’t cover your solar support needs, and take steps to protect yourself.
What steps can I take to protect my home’s solar equipment?
If you want to be proactive about protecting your home solar, so that you don’t have to worry about any service or maintenance needs in the future, regardless of what happens to your equipment manufacturer, you can sign up for an O&M service package, purchase an extended solar warranty, insure your solar power, and find out if your equipment was manufactured by a warranty-insuring company.
Sign Up For An Operations and Maintenance Service Package
Operations & Maintenance (O&M) service packages like Palmetto Protect come in different forms, but all serve the same purpose: to give you extra peace of mind. They are protection plans for your solar power system that can help with regular check-ups, service, maintenance, and repair costs. You can think of them as a support team that comes to your aid when your system is underperforming due to equipment issues, environment changes, or other factors. O&M service packages can also provide many other benefits to homeowners with solar panel systems, including performance monitoring, cleaning, pest control, and equipment maintenance.
To ensure you get the most out of your O&M package, make sure to consider a plan like Palmetto Protect that is available to any homeowner, regardless of what company manufactured the solar equipment, or who installed it. Palmetto Protect is backed by our 11+ years of experience in the solar industry, and we’re one of the few solar companies that specialize in solar maintenance and service, not just installations.
Purchase An Extended Warranty
An extended warranty is worth paying for, as it can help add protection to the life of the solar power system, providing additional years of coverage on top of the normal manufacturer warranty. A third-party warranty may also provide coverage for your solar equipment even if the manufacturer goes out of business, and thus, their original warranty is no longer valid.
Get Insurance For Your Solar Power Installation
Your equipment warranty usually covers things like manufacturing defects, but it won’t help protect you against other damage, like a tree falling on your roof and breaking some panels. That’s where solar insurance comes in to provide added protection.
There are many insurers today that offer plans for renewable energy and solar. Residential solar energy installations are often covered as part of a standard homeowner's policy, but in some cases, you may need to increase the amount of coverage on your home to account for the system's cost.
If your system isn’t attached to your home, such as a ground-mount system or solar panels on a carport, you may need an add-on or separate policy to get coverage. And some homeowner policies may exclude damages to solar power systems if it’s caused by a particular threat, such as extreme wind, so make sure to review your coverage closely to verify what’s included.
Use A Warranty-Insuring Manufacturer
If your panels were produced by a warranty-insuring manufacturer, that company is paying a third-party to make sure their warranties stay valid, even if they are no longer in business. Many top manufacturers have insured their warranty to provide extra peace of mind, although you should consider signing up for a solar support plan to help navigate the process of getting equipment replaced if you ever need to, since it can still be a complicated process if the manufacturer is no longer in business.
What kind of service and maintenance do solar panels need?
With no moving parts, solar power systems typically require very little maintenance to function well, with only an occasional light cleaning needed to ensure dirt, debris, leaves, etc., aren't blocking the sun's rays. That said, solar maintenance may be necessary if you notice that your energy output starts to decrease. If you think your solar panels need service, make sure to call a reputable solar expert for the job, since companies that offer solar service packages have the experience needed to get the job done right the first time.
Service and maintenance needs that are often covered by a service package include:
- Site Visits: Regular site visits allow a solar expert with experience identifying issues to physically inspect your equipment and spot any potential issues before they become larger problems.
- Cleaning: If you live in areas with a high amount of dust or pollen floating around, regular panel cleaning may be necessary.
- Inverter Maintenance: Solar inverters generally have a shorter lifespan than solar panels. They should be inspected regularly to ensure they are converting all of the energy created by your solar panels into usable electricity.
- Pest Control: Rodents and birds like to nest in and around solar power systems, causing potential damage to your panels. A service package can help with the removal of any existing pests, and put preventative measures in place to reduce future issues.
- Electrical Checks: Regularly inspecting all of the wiring, equipment, and electrical connections is crucial to making sure your system is generating the maximum amount of electricity.
- Crew and Personnel: A good solar O&M plan should include trustworthy solar repair experts that can perform any regular or one-off maintenance you need in a timely and professional manner.
Solar Power Maintenance Tips
There are a few things you can do yourself to maintain your solar power system and help prevent future issues:
- Keep an eye on the solar panels and make sure the inverter is working properly. Many inverters will have a status indicator, so make sure it is showing the system is working correctly, or you may be losing money by no longer compensating for your electricity use.
- Keep an eye on any trees that may shade the panels, and get them trimmed back when necessary to prevent that shade from covering the panels and reducing their power output.
- Record the performance of your system over time, as this can help identify issues that lower your electricity output but don’t eliminate it completely. One easy way of doing that is with a solar data tracking dashboard like the Palmetto App.
Solar Panel Cleaning Tips
Keeping your solar panels clean is one of the best things you can do to maximize their lifespan, maintain their performance, and prevent any issues that might need service down the road. Here are a few tips for how to clean your solar panels:
- If you live in an area with a lot of rain, your panels will naturally stay clean on their own, but if the weather has been dry, spraying your panels down with a hose can help remove dirt, pollen, or residue that may be stuck to the panels.
- Never use abrasive sponges, coarse materials, or harsh soaps for your solar panel cleaning, as you may scratch the glass. Always use a soft rag, and (preferably biodegradable) soap.
- Use a long-handled wiper to clean the panels while standing on the ground. Getting up on the roof to clean your panels is best left to the professionals with proper safety equipment, as the roof can become slippery during cleaning, and you could fall off and injure yourself. If you’re looking for an easy way to get your panels clean, consider signing up for Palmetto Protect, which offers regular panel cleaning for a reduced cost.
Does every solar company offer service?
Not all solar companies offer service and maintenance, as most companies only focus on installation. It’s a lot easier to just put new panels on roofs, so very few local solar companies will come to your aid when issues with your system arise. Nationally, there are around 3-5 companies focused on solar service, which is about 0.10% of all solar companies. Palmetto is one of those companies providing after-installation solar services, and with a long track record in the solar industry, we’re a service company you can count on.
What if I want to upgrade my solar power system?
The good news is, it’s possible to upgrade your solar power system with new equipment, even if the manufacturer of your old equipment has gone out of business. A lot of solar equipment can be made to work together, so if you want to add more panels, or you need to upgrade your inverter, it’s possible to get that work done.
Just like when you need service for your solar power system, when upgrading your solar equipment, it's important to work with a trusted solar company that has experience working with a wide range of equipment from various manufacturers. Palmetto has a long history of helping solar homeowners upgrade and expand their solar power, so we can assess your current system, recommend the best solution to your upgrade needs, and give you a budget to get the work done right. Even better, if you sign up for Palmetto Protect, you can save on those upgrades to keep even more money in your pocket.
My solar power system isn't working and the equipment manufacturer is out of business. What are my options?
Finding out that your solar equipment manufacturer went bankrupt can rub you the wrong way, especially if you need service. However, if you happen to find yourself in such a situation, there’s no need to worry!
If your solar power system isn't working, companies like Palmetto that have extensive experience servicing and maintaining solar equipment can get you back to producing power in no time. We can diagnose any issues, make a list of what needs to be fixed, and then offer a lasting solution that’s backed by our superior workmanship guarantee.
Plus, we offer a variety of Palmetto Protect plans that provide real-time energy monitoring, one-click customer support, comprehensive energy recommendations, and discounts on best-in-class service and maintenance.
Even if you don’t currently have an issue, you can still sign up for Palmetto Protect to get the peace of mind that comes with knowing you’re protected against any future problems that may occur, no matter what happens to the company that manufactured your equipment.
