What happens when your solar panel company goes out of business?

Solar panels are a long-term commitment that can require maintenance and service throughout their lifetime. If the company that installed the panels on your roof goes out of business, you could be left in a pickle.

Many factors can drive a company to go out of business, and depending on your situation, you can take a few steps to ensure their closing does not mess with your solar access.

What to do if your solar company goes out of business

So the company that installed your panels no longer exists. What should you do if you have an issue? Here are the four steps you should take as soon as possible.

1. Call local solar companies or electricians to finish or repair the installation

If you have any issues with your installation, or if the company goes out of business mid-install, you can call other local solar companies to take over the service. Don’t get your hopes up - most solar companies don’t take on jobs done by someone else. 

Why? Repair or servicing jobs don’t make solar companies a lot of money. The amount of effort it takes to get replacement parts and find time to get an installer out there isn’t beneficial for them when they could work on a brand-new installation instead. Plus, it can be a liability. Working on a system they didn’t originate could cause warranty issues, or shoddy work done by the previous company could come back to bite them.

But this isn’t always the case. In Florida, for example, Brevard Solar went out of business, leaving homeowners with half-completed installations or ones that they had already put a down payment on.  Another local company, AllSolar Energy, worked with installers in the area to take on Brevard Solar’s orphaned customers to help preserve the reputation of a budding solar industry in Florida.

There are a few companies out there that specialize specifically in solar maintenance and repairs. If you’re lucky enough to have one near you, they will probably be your best bet to get your system back up and running.

2. Find out if the company was acquired or if your account was transferred

Sometimes, a larger company will acquire another one, and you may be eligible for service under them.  If you have a solar lease or power purchase agreement, your account will almost certainly be transferred to a new company.

Solar companies that go out of business often sell their leases as assets to other companies. Acquiring these leases is attractive to a new company because they will own the solar system and the incentives that can come from them.

Also, many leases have production guarantees in your contract, so the new company will want to come fix it and maintain their asset.

3. Call the equipment manufacturer

For any equipment issues, connect with the manufacturers. If the manufacturer's warranty covers the damaged equipment, the manufacturer could help put you in contact with certified installers in your area. But you might run into the same issues you would with calling installers in your area. Many installers will be hesitant to take on jobs that aren’t theirs, even if they are familiar with the equipment.

Also, this is only helpful if the warranty covers the repair you need. If, for example, a squirrel got under your panels and damaged some wiring, the manufacturer probably won’t be able to do much to help.

4. Call your financing company (if you have one)

If your solar panels are paid for with a solar loan, then you can call the financing company. Similar to calling the manufacturer, the financier might be able to help you find a local installer with whom they have a relationship.

If you are in a situation where parts of your system are not working and you cannot get them repaired or replaced, you might be able to work with your financing company to defer payments on the system. This is a big maybe, but there may be something in your financing agreement that allows payment deferment.

What legal options do I have?

Legal action might be your best option if your installer has gone out of business and you’re struggling to find someone to help you.

The first thing you should do is organize any paperwork and correspondence you have between you and your installer. Then, you can try to coordinate the next steps with your legal representative. We’re not legal experts and cannot provide legal advice, so consult with law professionals on the matter. 

You can also contact Solar United Neighbors, a nonprofit group dedicated to protecting and representing solar owners across the U.S., with a team that can coach you through the best route based on your situation. 

In addition to the above, you can file a complaint with the Better Business Bureau and make sure to add a review on sites like SolarReviews to help other customers and make a public record of your situation for further evidence.

Why do solar companies go out of business?

Solar companies can go out of business for the same reasons as other companies, such as insufficient cash flow, mishandling of finances, or entering an overly saturated market where they cannot differentiate themselves.  

There are a few signs that a solar company might not be around for too long, including poor customer service, using low-quality equipment, and if they’re caught up in continuous litigation.

Poor customer service

Customer service is a major part of the residential solar industry. Solar panels are designed to last for 25 years and require occasional maintenance and repairs, so installers must support their customers for decades! 

If the company operates in a way that treats customers poorly, they are most likely not long for the solar world. Solar companies also thrive on referrals, and if they aren’t providing good service, their customers probably won’t recommend them to their friends and neighbors. 

Low-quality equipment

Using low-cost, low-quality equipment makes for a cheaper price for the customer. But the cheapest isn’t always the best. 

Using subpar equipment and charging very low prices can make it difficult for a solar company to stay afloat. Constant repairs of low-quality work and products can become a money pit, driving a company to close its doors.

Lawsuits

Poorly run companies can get quite a bit of grief from customers, sometimes leading to lawsuits.  Lawsuits could stem from solar companies signing customers up for loans they did not agree to or installing panels that are never turned on for use. You can read some (un)successful reviews about PowerHome Solar (AKA Pink Solar), a company that left customers feeling scammed. Tesla was also caught in litigation over changing the prices of already-signed solar roof contracts, which recently resulted in a $6 million settlement.

Look out for fly-by-night solar companies

While good, honest people run most solar companies, bad actors have given the solar industry a bad reputation.

Some solar installers operate as fly-by-night companies, meaning they move into an area and use aggressive sales tactics to convince people to go solar using bad terms and low-quality equipment, only to up and leave before completing jobs or repaying debts. These companies don’t exactly “go out of business” so much as they disappear.

To shield yourself from dealing with a fly-by-night contractor, you should perform ample research on the company. Ensure they’ve been in business for a few years in your area, check customer reviews, and ask the company for customer referrals. It can’t hurt to look up the company's owner and see if they have other LLCs registered to their name and what the reviews for those companies are.

We also recommend getting quotes from at least three different solar installers, so you can see the prices and equipment other companies offer and get a feel for their salespeople. SolarReviews is a great source to research your options and get in touch with reliable local companies in your area.

How you paid for your system can make an impact

Depending on how you paid for your panels, your situation and the steps you need to take now or in the future will differ. In each circumstance, you should try to find a different installer for any repairs, but with leases or loans, you have more parties involved in the ownership of your panels. 

Solar leases, PPAs, and third-party-owned systems

If you leased the solar panels on your roof from a company that goes out of business, there is a chance that the company will either be acquired or the panels will be removed during the bankruptcy filing process - where banks acquire the assets of a company to attempt to recoup the losses.

Leases can also be sold off as an asset to a different company. But the new company will likely notify you, as your payments will start going to them instead. 

Solar loans

If your system is owned or paid for via a solar loan, the largest inconvenience is that you will no longer have a company to contact if your panels need to be replaced or there is another issue. You could, however, find support through your solar loan provider.

Solar loan companies have large networks of installers they partner with, so they could connect you with a partner installer willing to take on repairs. You can also contact the equipment manufacturers for similar support or try and find an installer in your area to take on the job.

Cash purchase

Paying for a solar installation with cash provides the best savings, but it does leave you with the fewest support options if your solar installer goes out of business. Typically, even if you own your system outright, you could call your installation company to complete repairs and honor warranty claims.

If they’re out of business, though, your only options are to contact the manufacturer or call around to installers near you and hope someone will help you.

How to protect yourself from your solar company going out of business

No one wants to be stuck without a solar company to support them over the lifetime of their solar panels. Although solar panels have a very low failure rate, things happen! 

Before choosing a solar company, there are several ways to protect yourself and choose the best option.

Customer reviews and referrals

You’ve probably looked at customer reviews for a $20 purchase on Amazon - so it’s no surprise you should be looking at them for a purchase that’s worth thousands of dollars! You can search solar companies in your area and find reviews by actual customers right here on  SolarReviews.

Make sure you read reviews thoroughly - sometimes, a company will have good reviews from customers who just got their install and poor reviews from people who ran into issues down the line. Some reviews may also be of customers voicing their frustrations with their loan company or utility, not the actual installer.

If written reviews are not enough reassurance, ask a potential solar company for former customer referrals. They should be happy to provide you with satisfied customers. If they can’t, it’s a red flag.

Years in business

Choosing a company that has been in business for five or more years usually means the company is reputable, won’t up and leave, and can succeed in a competitive industry. 

Of course, every company needs to start somewhere, so it’s not to say you shouldn’t give a new company a chance. If you want a quote from a newer company, ask about the owner's previous experience. This can give you a bit more insight into how they got started and if you want to take a chance on them.

Get multiple quotes

Getting at least three quotes will allow you to compare costs and financing options. Multiple quotes also give you the ability to get a feel for each company. Are the salespeople pushy? Do they take the time to explain the process to you? All of these things matter when picking a company!

It’s important to remember that the lowest quote is not always the best. Cheap doesn’t automatically mean bad, but if a company’s quote is significantly lower than others, they’re liking skimping out somewhere. This could mean low-quality equipment, poor workmanship, or not providing fair wages for their employees. 

Also, when getting quotes ask for both the cash price and the financed price. Solar loans often come with additional fees, called dealer fees, that can substantially increase the price of going solar with a loan. Having both the cash and financed prices can help you find the best way to pay for your panels. 

Invest in solar O&M or third-party warranty packages

If you want to cover all of your bases, you can purchase additional third-party insurance packages that can cover your system if the company you used goes out of business.

Operations and Maintenance (O&M) policies provide coverage for maintaining your panels' health and durability. Many O&M packages include regular maintenance on panels, including solar panel cleaning services or checking for issues, and will still be in place even without your solar company. 

Solar Insure is another option that can add warranty protection to your system that goes beyond what manufacturers promise. All of these will be an additional cost but can give you peace of mind for the lifetime of your solar system.

Active licenses + insurance 

Ensuring that a company has the necessary licenses and skills to perform the job is a good thing to check for any construction job. 

Look for companies that employ NABCEP-certified contractors. To obtain and keep NABCEP certification, companies and employees must participate in education and testing, which means they likely know what they’re doing. 

Go with your gut

Trust your instincts if a deal seems too good to be true or a pushy salesperson is making you uncomfortable. Buying solar panels is a huge investment, so taking your time to make the right decision for you is important. Don’t feel pressured to decide quickly on something that will power your home for 25+ years.

Take the time to research now so you don’t waste time in the future 

Picking a solar company is a commitment; you will want the company to be around for the entire lifespan of your solar panels. Getting at least three solar quotes can help you not only find the best option for you based on price and allow you to have three solar companies research their health. 

But if you have found yourself in a situation where your chosen company went out of business, don’t panic. Gather your paperwork, contact legal representatives, and get help from Solar United Neighbors.