What do I do if my solar installer goes out of business?

2024 has proven to be a tough year for large solar companies. If you’ve been following the news, you’ve probably noticed that the list of solar companies going out of business seems to keep getting longer. A confluence of factors, like higher interest rates and energy policy changes at the state level, have left some solar companies struggling to stay in business. Major companies like Titan Solar Power and ADT Solar have already gone under, leaving thousands of customers unsure of what to do with their solar panel systems. And in August, one of the largest and oldest solar companies in the U.S., SunPower, filed for bankruptcy and was delisted from the Nasdaq stock exchange. 

In many cases, solar companies that file for bankruptcy are acquired by other installers, which tends to be good news for the customers. That’s because acquisitions usually result in the least disruption to your service. But there are options for homeowners left with “orphaned” solar systems, whether due to an installer bankruptcy or any other issue. In this article we’ll walk you through what you need to understand if your solar company goes out of business and how you can navigate the situation.

If your installer isn’t taken over by another solar company, taking quick action can help you feel more in control of your circumstances if you find yourself with an orphaned system. If your service provider goes out of business and isn’t immediately acquired by another company, one of the first things you should do is reach out to your solar panel manufacturer, said Michael Skipper, a service coordinator at Exact Solar. 

“Typically, it's a good rule of thumb to reach out to the manufacturer of the solar system to get a list of installers who are certified to work on their equipment,” Skipper said. “There are instances where if you don't have a certified installer working on your system, those warranties would be determined to be void.”

Making sure your warranty remains valid will offer you peace of mind as you navigate transferring your service to a new solar provider, if that’s what you need to do. Fortunately, bankrupt installers are frequently acquired by other solar companies, allowing service agreements and warranties to continue mostly uninterrupted.

The fact that a company has filed for bankruptcy doesn't necessarily mean that its customers will lose support for the products or services that they've purchased. In the U.S., filing for Chapter 11 bankruptcy sets off a reorganization process that allows the company to keep its business alive and pay its creditors over time. Historically with the solar industry, the buyer in many cases has taken over responsibilities such as upholding warranties.

If your solar equipment manufacturer itself files for bankruptcy, there are a few ways to avoid being left without a production or equipment warranty.

1. Buy an extended warranty

One option for hedging against solar manufacturer bankruptcy concerns is to purchase an extended warranty from your solar installer, which can cover everything from repairs to replacing your panels. This way, if your equipment manufacturer goes out of business, your installer is still contractually obligated to honor its warranty. Warranties will vary from company to company, so make sure to read the fine print so you understand what’s covered and what’s not. However, if both your installer and manufacturer end up bankrupt, you could risk losing any warranty protection.

2. Insure your solar installation

Many insurance companies now offer plans for renewable energy and solar; covering your installation with one of these plans will protect you from defective panels, decreasing output, and other damage to your solar array. While expensive, these policies can also cover installation and operations damage, power output, and general equipment health. It is important to remember that you may end up spending the same amount of money on replacing parts like inverters or single panels as you would entering an insurance agreement.

3. Buy from a warranty-insuring manufacturer

The safest way to prevent being left without a warranty from a bankrupt solar manufacturer is to buy your panels from a warranty-insuring manufacturer. A warranty-insuring manufacturer commits their warranties to be held up through third-party backing even if they declare bankruptcy.

Depending on whether you're working with a large, national installer or a local company only servicing areas near you, an installer bankruptcy may affect you differently.

Large-scale/national installers

Large solar companies declaring bankruptcy have been in the headlines recently, but this is certainly not the first time. Often, when a major solar company declares bankruptcy, the assets are purchased by other solar companies or an equity fund. When another company acquires a bankrupt solar company, it benefits because it’s able to acquire the existing customers without any additional costs. For example, when Sungevity went bankrupt in March 2017, Northern Pacific Group purchased the company, and Sunrun acquired the existing solar financing agreements. As part of the agreement, Sunrun became the solar service provider for Sungevity customers resulting in continuity of service. 

This appears to be the case with SunPower, too. California-based solar installer Complete Solaria is acquiring a large portion of SunPower’s remaining assets, which means that most of SunPower’s existing customers shouldn’t see an interruption in their service. 

Small/local installers

As with large installers, local companies facing bankruptcy will often be bought by a separate entity that will take responsibility for all the installer services initially promised to customers.This means that although the name of the company servicing your panels will change, the promised services won't.

However, not all small installers will be bought by a larger company. Because of this, it may be wise to consider investing in a solar panel operations and maintenance (O&M) plan. O&M plans are purchased through separate companies not involved in installing your solar panels. It means even if your local installer goes bankrupt, your O&M provider will still work to diagnose and repair issues your installer would have handled, such as cleanings, electrical systems maintenance, and general system inspections.

Just a reminder: that even if your installer goes out of business, your panels are still covered by the manufacturer’s equipment and production warranties. These warranties typically guarantee around 80% electricity production capacity over 25 years and materials coverage for 10 to 25 years. You can contact your equipment manufacturer, who will likely be able to connect you with a contractor who can diagnose and repair your damaged or faulty system for a one-time fee.

If you took out a loan to pay for your solar panel system, in most cases you’ll still be responsible for making your monthly payments and paying off the full amount you borrowed from your lender. Although in some rare cases, a change in the terms may be possible, according to Skipper.

“It’s worth reaching out to your loan provider to see if they’ll do any kind of loan forgiveness or modification,” he said, adding that he’s seen a handful of cases where a court ultimately ruled in favor of the customer and gave them a break when it came to their loan agreement.

On the EnergySage Marketplace, you can solicit quotes for solar projects from qualified, pre-vetted installers in your area. Installers on the EnergySage Marketplace provide quotes with all types of solar panels, inverters, and racking systems, and comparing quotes side by side is the best way to ensure you get the best package deal for your solar project. If you have a question, concern, or preference regarding your solar equipment, you can leave a note on your profile outlining your question, and installers will know that you want more information about specific product offerings.