Texas Solar Companies Going Bankrupt: What’s Happening?
Facing delays and uncertainties, Texas homeowners navigate bankrupt solar companies amid challenges, policy changes, and reduced competition in the industry.
Our Assessment of the Industry.
With dozens of Texas solar companies going bankrupt in 2023 and many following in their footsteps this year, we’re getting asked the questions and looking for answers. The financial problems and bankruptcy risks within the residential solar industry are top of mind. This article gets to the root of what’s causing these bankruptcies and what it means for the Texas energy landscape—must read for homeowners, workers and investors impacted by the industry chaos.
Key Points: Factors Behind Texas Solar Company Bankruptcies
- Dozens of solar companies in Texas are going belly up due to economic downturns, with rising interest rates, financing hurdles and policy changes hitting the residential solar industry and a skilled labor shortage.
- The Texas solar company collapse is having a ripple effect across the industry, with delayed installations for residential customers, higher prices, less competition and job losses mirroring what’s happening in other states.
- Homeowners affected by solar installer bankruptcies are left to deal with warranty issues and transition to new providers, while the broader Texas solar industry remains optimistic with state policies and federal tax credits driving growth.
Texas Solar Companies Rise and Fall
Texas was the bright spot in the solar industry with a flood of solar companies popping up across the state to power homes and businesses. But the announce of closures from some of the biggest players in the residential solar space, the industry is still dizzy from the punch. It's worth noting that this wasn’t limited to Texas; it’s a national phenomenon with interest rates climbing, financing hurdles and policy changes causing industry wide turmoil.
After failing to land a buyer, Titan Solar abruptly announced their bankruptcy in June 2024, a decision that has left thousands of homeowners out to dry with few solutions in sight. The bankruptcies of several other Texas solar companies has created a lot of uncertainty. Homeowners are losing big time. they invested in solar panels expecting long term savings and now are left with unfinished projects and no way to get a refund. Workers are losing their jobs and employment opportunities aren't what they used to be. The sudden exit of these companies reduces competition and can impact service and pricing. Overall it affects many parts of the market from customers with unfinished projects to investors reevaluating their solar investments.
Economic Downturn and Solar Challenges
As the Federal Reserve raised interest rates, solar companies with poor operational health experienced the perfect storm. The resulting higher borrowing costs stifled consumer interest in solar and put pressure on big and small companies alike. Smaller solar contractors felt the squeeze of higher working capital costs, proof that the solar industry is not immune to the broader economy.
But that wasn’t all. The Inflation Reduction Act boosted demand for electricians and inadvertently exposed the severe shortage of skilled labor to meet that demand, especially in Texas where long wait times were scaring off consumers from going solar. With electrician retirements outpacing new entrants and the difficulty in recruiting young talent, the solar industry had a big bottleneck.
Texas Solar Bankruptcies Domino Effect
The Texas solar company bankruptcies domino effect spread across the industry as one company after another went down. Contractors were dealing with delayed payments due to changes in solar lending and solar EPC's were forced to take inventory of their business model.
Updated List of All Bankrupt Solar Companies in Texas (2023-2024)
- Lumio
- Suntuity Renewables
- Kayo Energy
- Alternative Solar
- American Sun
- Daybreak Solar Power
- Envirosolar
- Hitech Solar
- Integrity Solar
- Next Energy
- Speir Innovations
- TES Home Solar
- Texas Solar Broker LLC
- Verisolar
- Vulcan Solar
- Wells Solar & Electrical Services
- Sunworks
- Titan Solar Power
Residential Solar Customers
For residential solar customers, the bankruptcy wave meant a world of delays and uncertainty. As solar installations ground to a halt, homeowners were left wondering if their projects would ever be completed and if their investments were safe. The shake up could also stifle competition in the industry which could lead to price increases and lower service, for current and future customers.
What Happens to Your Solar System When the Installer Goes Bust?
After an installer goes bankrupt, homeowners are left in a tough spot, unsure of their solar system’s future. Chapter 11 bankruptcies can be a lifeline, allowing warranties and other obligations to be honored by any entity that acquires the bankrupt company. But for many, reaching out to equipment manufacturers for warranty covered repairs is the go to solution as they can recommend certified installers to finish the troubled installations.
The reality is that finding local solar companies or electricians to take over can be tough, as many are reluctant to assume the liabilities and problems of another company’s work.
Warranty and Maintenance
Looking elsewhere, like third party warranties and independent Operations and Maintenance (O&M) packages can give homeowners a safety net so their solar systems keep working even if the original installer goes under. Companies like Solar Insure have brought products to the solar industry that provide viable solutions to homeowners who were left behind. The transfer of assets and warranty obligations to an acquiring company can be a lifeline for continued support.
New Service Providers
Finding a new solar service provider is a process. Homeowners need to research providers’ track records to make sure their industry experience and service quality matches their expectations. Reading through reviews and testimonials are also a good roadmap to follow if you're looking to identify a reputable installer.
Due Diligence
In the pursuit of solar energy, due diligence is the guiding light for prospective customers. Looking for installers with reputable certifications, a 3 year track record and the right credentials can keep customers away from companies that will leave the market before the warranties and service agreements are up. Full transparency from installers, clear explanations of the installation process, pricing, and an ability to answer questions are the signs of a solar partner you can trust.
And personal referrals can fill the gap between uncertainty and confidence in your decision.
Financial Stability and Business Longevity
A solar company’s longevity is often tied to their ability to provide ongoing customer support and honor long term commitments like warranties. Being in business for a long time means stability and the ability to address future system upgrades, maintenance and warranty issues so customers can have peace of mind.
How to Choose a Solar Partner in Texas
Choosing a solar partner in Texas means homeowners have to navigate through a maze of credentials, consider financing options and compare services. Innovative financing options like solar panel leasing which requires little to no upfront cost can make solar more accessible to consumers.
And comparing quotes from at least 3 different solar installation providers including a solar installer is a key step to finding the right balance of price and service.
Solar Company Credentials
A solar company's credibility and work quality can be measured by reading online reviews and testimonials from past customers. 20-30 reviews on Google, Yelp and Angie's can be a good indicator of the company's reputation.And personal recommendations from friends and neighbors with solar can add credibility to the decision. Another crucial step is verifying the company's electrical license through the Texas Department of Licensing and Regulation (TDLR) website, as this ensures they're legally qualified to perform solar installations in Texas.
Solar Financing Options
Texas homeowners have many solar financing options available. From cash payments and solar loans to leases and tax incentives the financial path to solar can be customized to your needs. Solar loans allow homeowners to spread the cost of solar panels over time and secured loans can have lower interest rates because of collateral.
Solar leasing also known as solar leases is a no upfront cost option but doesn’t give the lessee tax incentives or rebates. Cash purchases eliminates interest payments and can increase the return on investment. If a solar system is financed through a loan the financing company may step in to help with service provider transitions or discuss payment deferment options if the system needs non-repairable parts.
The Future of Solar in Texas
Despite the recent challenges in the Texas solar industry the future looks bright with recovery and growth on the horizon. Analysts are expecting the industry to bounce back and with continued state policy and incentives support, solar will be a bright spot on the state’s energy landscape.
Innovations and Market Shifts
A shift is happening in the Texas solar market as solar generation surpassed coal for the first time in the state’s electricity mix. That’s a big step towards a renewable energy powered future. Texas is leading the nation in solar installations and will contribute a big chunk of the new solar capacity growth so the state is all in on solar.
Funding is strong as evidenced by the influx of capital with over $27 billion invested in the solar industry in the 4th quarter of 2023 alone. Federal grants are fueling this trend by providing funds to expand solar access in underserved communities and training programs. New solar panel manufacturing facilities and large solar farms in Texas are showing the state’s commitment to be a solar leader.
Projects like the Sunnyside Solar Farm in Houston are examples of the innovation happening in the rooftop solar industry turning underutilized spaces into clean energy generators.
State Policies and Incentives
State and federal tax credits are the fuel for the Texas solar industry and make solar panels a viable option for homeowners. As Texas creates an environment for solar development and supports entrepreneurs and startups the industry will continue to grow with policy driven momentum and financial incentives.
Conclusion
After all the recent challenges the Texas solar industry is at a crossroads between its troubled past and a bright future. The lessons from the bankruptcies are warnings and signals for a more robust and sustainable solar market. For homeowners and industry players alike the key is due diligence, innovation and leveraging the state policies and incentives. As the sun rises over Texas the opportunity for a bigger and better solar future is still there and we can all be a part of the energy revolution.
FAQs
What if my solar installer goes bankrupt?
If your solar installer goes bankrupt check if it’s a Chapter 11 bankruptcy as this may allow the company to honor their warranties and obligations. Contact the equipment manufacturer for warranty repairs, consider third-party partners like Solar Insure and find a new service provider with a good industry reputation and verifiable credentials.
How do I protect my solar investment?
Protect your solar investment by choosing a financially stable and certified solar company with a good warranty record. Research, compare quotes and consider cash purchases or secured solar loans to minimize financial risk.
Are there solar installations in Texas with no upfront costs?
Yes, Texas homeowners can lease or do power purchase agreements to install solar panels with no upfront costs but may not be eligible for tax incentives or rebates.
What’s the future of the Texas solar industry after the bankruptcies?
It’s still bright. Innovation, state policies, solar incentives and investment and solar access in low income and underserved communities.
Shining a light on the Texas solar and energy landscape.
