Solar power can provide your home with clean, renewable energy for decades. Since solar equipment lasts so long, you may be wondering, "What happens if my solar company goes out of business and I need service?"
With stiff competition among an ever-growing number of installers, many solar companies have declared solar bankruptcy or stopped operating. So what happens when your solar company is no longer around? This guide covers the causes of solar company bankruptcy, and what to do if your solar installer goes out of business.
Why do solar companies go out of business?
The solar industry is growing, so you may be wondering why a solar company goes out of business. There are many reasons why, including poor customer service, low-quality equipment, legal action, and fly-by-night solar companies.
Poor Customer Service
Many solar companies are more interested in installing solar equipment on the homes of new customers than they are in supporting the solar equipment of their existing customers. For these companies, ongoing customer service is not a priority.
In some cases, companies lure consumers into buying cheap, substandard solar products with low prices and ‘too good to be true’ offers. When users experience problems, installers might ignore these claims because they can't fix the underlying issues, or they aren’t experienced in solar service so they try and fail to find a solution.
A business that cannot provide solutions to customer complaints isn’t going to have a good reputation, and those unhappy customers spread the word about their unfortunate experiences, making it hard for that company to get new business. Eventually, their reputation catches up with them, and the company declares solar bankruptcy.
Cheap solar equipment might bring the initial cost of going solar down, but that low-cost equipment is more likely to develop problems over time. This can result in customers making multiple requests for service, repairs, and replacements, which can strain the company's resources. If an installer isn’t able to service equipment that fails, they might be forced to go out of business.
False advertising and violating consumer laws can wipe a business out of existence if someone takes legal action. One reason for lawsuits against solar companies is that some companies will mislead consumers into purchasing products that don't meet their promised specifications.
Consumers have also complained about companies misleading them about the total cost of installing solar power, or overestimating their solar savings. The Federal Trade Commission levies hefty fines on these dishonest businesses, sometimes forcing them to close.
'Fly-by-Night' Solar Companies
Government incentives like the investment tax credit for solar and a steady reduction in solar energy system prices have resulted in a strong demand for solar power. As a result, many fly-by-night solar companies popped up to try and capture some of that demand.
These companies were often experienced in other parts of the construction industry, such as roofing contractors, electricians, general contractors, and investment firms, but they didn’t have the expertise needed to run a solar business.
Since the solar business was new to many, the learning curve was quite steep. Some inexperienced companies had challenges installing and maintaining their systems, while others offered warranties they couldn't honor.
Eventually, these companies either closed down or moved on to the next ‘hot’ construction market, leaving consumers with no clear options for solar maintenance and support.
History Of Solar Companies Going Out Of Business
Between 2000 and 2016, about 8,700 unique solar companies installed at least one solar energy system in American homes. By the end of 2016, only 2,900 installers were still active, meaning two-thirds of all solar companies had faced solar bankruptcy, or simply vanished.
Most of the companies that closed were smaller solar businesses that only serviced a few homes, but even some solar heavyweights, like the examples below, have struggled to stay in business over the long term. The list of bankrupt solar companies is long, and filled with companies of all shapes and sizes.
2020 was an especially tough year for solar companies, as the COVID-19 pandemic placed restrictions on how companies could do marketing and how they could install solar power systems. Customers were hesitant to have anyone in their home, and this resulted in some big names facing big challenges to stay in business.
Real Goods Solar - As a pioneer in the U.S. solar industry, installing rooftop solar panels as early as 1978, Real Goods Solar raised more than $50 million from investors when it went public in 2008. Unfortunately, they struggled to make the business profitable and tried to pivot to selling Dow’s Powerhouse solar shingles in 2019, before finally declaring solar company bankruptcy in January of 2020.
Sungevity - At one time the fourth-largest U.S. rooftop solar company in terms of market share, Sungevity was founded in 2007, and had raised $70 million in equity from investors by 2014. In 2017, following a Chapter 11 bankruptcy filing and private equity acquisition, they created two separate companies, Solar Spectrum and Horizon Solar Power, that were going to operate under the Sungevity umbrella. Unfortunately, that plan didn’t work, and they laid off 400 employees in March of 2020, before ceasing operations entirely in November of 2020.
EnergyONE - From their start in 2013, EnergyONE was once a national brand with several divisions, installing commercial, residential, and rural PV solar energy systems in the midwestern states of Kansas, Missouri, Iowa, Nebraska, and Oklahoma. As business slowed, they consolidated over a two-year period, before eventually merging with KC Energy Solar in October of 2020 to become EnergyONE Renewables.
NRG Home Solar - NRG is one of America's largest power providers, and NRG Home Solar was their attempt at entering the solar market, including the acquisition of the portable solar power company Goal Zero. At one point in 2015, NRG Home Solar was the fourth-largest residential solar installer in the country, but that same year, their solar division lost $175 million. In 2016, they tried to restructure, pulling out of California, Connecticut, and North Carolina to focus on Massachusetts, New Jersey, and New York, but they still couldn’t make the solar business work. Eventually NRG announced that they would shutter their NRG Home Solar installation business, and focus instead on generating solar leads through their retail business to pass along to third parties.
Petersen-Dean - Founded by Jim Petersen in 1984, Petersen-Dean was once one of the nation’s largest independently owned solar and roofing companies, with nearly 3,000 solar and roofing employees in nine states: Arizona, California, Colorado, Florida, Hawaii, Louisiana, Nevada, Oklahoma, and Texas. COVID-19 hit Petersen-Dean especially hard, and they said their solar leads dropped 87% between March and May of 2020. Facing mounting debts, they filed for Chapter 11 bankruptcy protection in June of 2020.
What happens if my solar company goes out of business?
What happens when your solar company goes out of business depends on your installer. Did you work with a large national or regional installer, or a relatively small local contractor? Here is how each situation might affect you:
Large, National-Scale Installers
When a large solar installation company shuts down or goes out of business, another company in the clean energy space usually comes in and acquires the remaining assets, and takes over solar support for their existing customers.
For example, when Sungevity declared solar company bankruptcy in 2017, Sunrun acquired all of the existing solar lease agreements, so Sunrun became the service provider for Sungevity customers, ensuring their continued solar service.
Small, Local Installers
Depending on the size of the company, when a local solar installer goes out of business, sometimes larger clean energy companies will come in and acquire the existing customers. In this case, the acquirer assumes responsibility for all services promised to the customer, and you get a new provider to maintain and service your solar power equipment like your original installer would have.
However, not all small-scale solar companies find a willing buyer, and even if your original company gets purchased, you might not like working with the new company. For this reason, we suggest that solar customers should invest in a Solar Operations and Maintenance (O&M) program like Palmetto Protect.
An O&M Plan, which you purchase from a third-party solar service provider, offers long-term solar maintenance and support. Think of it like solar insurance that makes sure everything is working correctly, and helps you save when things don’t work like they should.
If your solar company goes out of business, your O&M provider will continue to service and repair your solar energy system, just like your original installer would have, so you never have to worry about getting solar support when needed.
If your solar installer goes out of business, you may still have a warranty that covers potential issues with your equipment, but solar warranty work can be tricky to manage, so it’s a lot easier to let the O&M provider negotiate with the solar equipment manufacturer on your behalf, as they may be able to save you money, and they can definitely save you a lot of headache.
What happens to my solar lease if the company goes out of business?
If your solar power was acquired through a lease, you may have some protection if your solar company goes out of business. Solar leases typically include a production guarantee, since the lease company owns the equipment, not the homeowner. Thus, if the solar power system isn’t generating power because of a maintenance or service issue, the lease company is incentivised to get that system working properly as soon as possible.
If your original solar lease company goes out of business, it’s almost guaranteed that your lease contract will be acquired by another company that will then become your main provider of service and support, in exchange for your continued lease payments.
When a solar leasing company goes bankrupt, the liquidation process treats your lease contract like an asset. Therefore, other solar companies will look to acquire those assets for a price that make them profit over the long term. The new entity that acquires the old company then assumes the responsibility of maintaining your solar panel system.
What kind of service and maintenance do solar panels need?
Regular service and maintenance is essential to keeping your solar energy system operating correctly, safely, and efficiently. Optimum performance lets you enjoy maximum savings on your energy bills, and a well-mainted system can last for decades.
One of the main service and maintenance requirements for solar panels is to keep them clean. Dust and debris can accumulate on the surface of the solar panels, which can compromise the whole system's performance. Additionally, water seepage and extreme weather like hail storms and excessive heat can cause system damage or production degradation.
The following is a list of some of the service and maintenance tasks that a solar service specialist might perform:
- Cleaning the panels and ensuring they are free of defects
- Inspecting parts for corrosion and deterioration
- Removing dust and debris from vents
- Confirming all electrical components are functioning properly
- Checking the wiring and switches for defects
- Ensuring that fittings and cables are secure
- Clearing the access to isolator switches
- Reviewing inverter data for any recorded faults
- Ensuring that emergency procedures are visible and legible
Pro Tip: Keep all the paperwork from your original solar installer, since the product warranty might cover some issues, but you’ll need to know who manufactured the equipment, when it was purchased, and other details that your paperwork should contain. In addition, keep in mind that many warranties require you to keep your solar equipment in good working order, so a service plan like Palmetto Protect is an easy way to show that you’ve stayed current with any maintenance and support needs.
Does every solar company offer service?
If you want to install new solar equipment on your home, it’s easy to find multiple installers that are ready to do that work. Unfortunately, locating a company that can diagnose and repair solar equipment is not as easy. Only about 0.1% of all solar companies focus on service, so it can be difficult to know who you can trust to get your solar equipment working properly in a safe and efficient manner.
The shortage of qualified solar maintenance technicians is because many companies don’t want to invest in training people to do service. It’s easier to train people to install new solar equipment, compared to learning the details of a wide range of older equipment types and manufacturers, some of which may have gone out of business since the equipment was first installed.
For a high-performance solar energy system that serves you reliably throughout the year, partner with a full-service provider. Palmetto is proud to be one of the top five solar service companies in the United States, and we’re trained and equipped to deal with any issues that your photovoltaic power system might have.
What if I want to upgrade my solar power system?
The good news is, even if your solar company goes out of business, it’s usually still possible to upgrade your solar equipment or add additional solar panels. This work doesn’t have to be done by the original installer, but it is good to find a company that’s experienced with working on a wide range of solar equipment types, since they’ll know what equipment can be made to work together.
Keep in mind, most solar companies do have a minimum number of panels that can be installed, but they don't specify a maximum limit. The minimum number helps ensure that the installation makes economic sense, but it might not take into account the future growth of your family and your long-term energy needs. Also, unplanned additions like the purchase of an electric vehicle might mean it’s time to upgrade your solar power system.
As with most solar projects, the cost associated with permitting and labor can be considerable, so you’ll want any upgrade project to be cost-effective. If you’re interested in learning more about your upgrade options, Contact Palmetto today so we can review your home and help create a plan for solar upgrades.
My solar power system isn't working. What are my options?
There are a few things you can do yourself to fix minor problems with your solar energy system. For instance, you can remove obstructions like tree branches that may be preventing the panels from receiving maximum sunlight. You can also confirm that the inverter LED light is on (usually green) or switch on any circuit breaker switches that may have tripped.
However, if your solar power system isn’t working and your solar company goes out of business, it’s best to contact a solar service professional for any repairs. An experienced solar service company like Palmetto will perform a comprehensive diagnosis that can help quickly pinpoint any faults in your installation. Once the issue has been diagnosed, experienced technicians will know the right parts for various solar equipment components to ensure that your equipment gets fixed safety, and will continue to provide reliable service for many more years.
Even if your original solar company has gone out of business, you can save on any solar operations, service, support, and maintenance needs with Palmetto Protect. With real time energy monitoring, one-click customer support, comprehensive energy recommendations, and best-in-class service, you can put your mind at ease knowing that your solar power system will always be running at peak efficiency, and that we’ve got your back if something isn’t working right.