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Your Solar Company Went Bankrupt — What It Means and What You Can Do

Solar installer SunPower filed for bankruptcy on Aug. 5, becoming the latest solar company to succumb to the effects of rising costs, more competition and changing state incentives and regulations. More bankruptcies may be on the horizon, too – in California alone, a whopping 75% of solar companies are now under financial duress, according to research from solar warranty provider Solar Insure

For consumers with solar panels, a solar provider’s bankruptcy is more than just a headline; it can be the start of a huge headache. Here’s what to know if it’s suddenly lights out for your own solar provider.

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Will the company continue to operate?

Why: If your solar company files Chapter 7 bankruptcy, it intends to immediately stop operating and sell off its assets. You probably won’t be able to contact anyone at the company, and it’s probably not going to help you with repairs or warranty work. If your solar company files Chapter 11 bankruptcy, on the other hand, it likely intends to keep operating while it figures out if it can restructure to stay operational

Action you can take now: If your solar company files bankruptcy or another company acquires it, you should receive a letter in the mail telling you about the situation and if it will affect your contract.

“So, it is important over the next few months for the consumers that are party to those contracts to pay attention to their mail because they will receive notices from the bankruptcy court, indicating if there is a plan to either cancel or honor or transfer to a new company those agreements,” says Monique D. Hayes, a partner at DGIM Law in Miami, Florida.

Pay attention to the deadlines in the notifications, Hayes adds. Customers who want to file a claim for financial damages — such as if the company said it would repair a system but didn’t do so before filing bankruptcy — usually only have 90 days after the bankruptcy filing to file the claim.

Will my solar panels (and battery) still work?

Why: Your equipment will still produce solar energy if your solar installer shuts down. That’s because once your system is properly connected and working, a solar company’s role is usually only to monitor, troubleshoot and repair the system when needed.

Action you can take now: You’ll want to think about finding a new company to handle repairs, though, if a different company doesn’t take over your installer’s warranty contract.

Can I still monitor my system’s production?

Why: Some manufacturers install equipment that has monitoring capabilities. This allows the equipment to collect data about how your solar panels are functioning. Typically, the provider’s monitoring software or app makes the data accessible — but you may be able to see the data with different monitoring software.

Action you can take now: Even if your monitoring app didn’t come from your solar panel installer (perhaps it came from the manufacturer of your solar inverter, for example), you might be able to switch to a third-party app instead, says Aaron Nichols, a marketing and advocacy specialist with Exact Solar, which installs solar energy systems in Pennsylvania, New Jersey, and Delaware.

Can I still get a repair through my manufacturer warranty?

Short answer: Most likely.

Why: Solar panel manufacturers often warranty their products against defects, and in some cases they guarantee a certain level of energy production. This is separate from the warranties your solar installer provided for the installation work itself. So as long as the solar installer and manufacturer aren’t the same company, you should still be able to call the manufacturer for warrantied service on the panels.

If your installer is also the manufacturer of the solar panels, bankruptcy could affect your manufacturer warranty. However, if another company acquires your bankrupt installer, the new owner may honor the existing warranties, though that’s not always the case, says Hayes.

Action you can take now: If a new company doesn’t acquire your solar provider or won’t honor your existing warranty, you may want to hire a different solar company for service.

“The good news is there’s probably a company that’s willing to take on the service agreement that’s in your area,” Nichols says.

Although they usually won’t replace the workmanship warranty, Nichols says some solar companies will assist with things such as troubleshooting issues, repairing equipment and uninstalling and reinstalling panels for roof replacements. Companies’ services vary, and you’re probably going to have to pay for them, he adds.

There are two ways to find a new servicer, according to Nichols: either search for a certified installer for your equipment’s brand (for example, if you have an Enphase battery, search for installers trained on that technology), or search online for “solar system service” or “solar system maintenance,” which should show you companies offering these services.

Your new servicer can probably monitor your system for you as well, Nichols says. Switching over your monitoring also lets the company remotely troubleshoot issues with your system.

Can I make a claim against my workmanship warranty?

Why: A workmanship warranty usually covers the installation of your solar panels and related installation equipment, including the design of your system and installation-related roof damage. The solar provider may transfer that warranty contract to another company in some cases

“Some of those contracts, for instance, still have payment obligations on them,” Hayes says. “Because if it was a contract for a solar purchase or warranty purchase that’s paid over time, that contract has value.”

The terms and conditions of customer contracts typically don’t change if the solar provider sells them. If that’s the case with your solar company, Hayes says, the new company will likely honor your warranty.

However, if a buyer doesn’t want to purchase existing contracts and warranties, it has to notify affected customers that it’s canceling their contracts, Hayes says.

Action you can take now: Until you are notified that another company has purchased your warranty agreement, call your solar company first if you need something repaired through the warranty. Keep records and watch carefully for a response.

“If the company is not responding or providing the service or completely ignoring the notice, then they may have a claim in the bankruptcy proceeding,” Hayes says.

Should I still make payments on my loan?

Why: If you financed your solar panels through your now-bankrupt solar company, another company will likely purchase the loan and you will still need to make the payments. Failing to make payments on the loan can have some serious consequences on your credit scores, result in fees and more. If you funded with an equity loan, you can even risk losing your home.

Action you can take now: If you financed with an external bank (not through your solar company), your loan shouldn’t be impacted. Those who financed with the solar company should receive information who is taking over loan servicing. After you get that information, contact the new lender and verify that your loan terms will remain the same. If your loan agreement allowed your original solar company to modify your loan terms, such as the interest rate, the new lender will have the same rights to make changes, Hayes says.


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