The Ultimate Guide to Solar Company Bankruptcies & Business Closures
The last decade has witnessed a significant increase in the development and implementation of green power by U.S. businesses and households. At the same time, between 2022 and 2025, a wave of bankruptcies and solar companies going out of business occurred in the United States.
The solar industry was heavily affected by a range of factors, like higher interest rates, legislative shifts, competition, and financing issues. Some companies were unable to cope with the new challenges and had to make the difficult decision to shut down their business. Consequently, the potential new clients became more cautious when deciding to go solar and tried to understand which solar panel companies to avoid. In this article, you will learn about the main reasons for business change, what current challenges are, and what we can expect from the industry in the future.
Why Solar Businesses Fail
The recent wave of solar company bankruptcies and business closures in the U.S. solar industry is not a result of a single event or factor. It is a complex mix of financial, regulatory, operational, and reputational challenges. Let’s have a closer look at the main reasons.
High Interest Rates & Growing Financing Costs
Residential solar energy is heavily dependent on consumer financing, including loans, power purchase agreements (PPAs), and leases. When interest rates rose rapidly between 2022 and 2024, the cost of borrowing for both consumers and corporations rose dramatically. As a result:
- Many clients rescheduled or canceled planned installations due to prohibitive financing terms.
- Rising rates strained cash reserves and limited the capacity of solar companies that offer in-house financing to build new projects.
- Financing partners withdrew, significantly constraining the business’s liquidity.
Policy Changes
Homeowners who were considering going solar always relied on local and federal incentives when calculating their savings and making a final decision. However, in states like California, Florida, and North Carolina, critical legislative changes, most notably California’s Net Energy Metering (NEM) 3.0, have significantly reduced the value of solar exports.
- Under NEM 3.0, homes get around 75% less credit for surplus electricity transmitted to the grid.
- This adjustment increased payback periods, making solar less economically appealing.
- Companies that rely on high-volume rooftop installations experienced a sharp decline in demand, with several reporting 80 %+ revenue losses in the months following NEM 3.0.
Dealer or Third-Party Sales Networks
Source: Grist
Some solar installers, such as Titan Solar Power, expanded very quickly by leveraging dealer networks that helped them generate leads and close transactions. This growth led to overselling and misrepresentation, as commission-driven sales staff made exaggerated claims.
- Poor system quality is often the result of hurried installations and inadequate oversight.
- A brand’s reputation can be easily damaged by customer complaints and negative reviews, which often lead to lawsuits.
- As difficulties worsened, businesses failed to fulfill their service and warranty obligations, ultimately leading to bankruptcy.
Intense Market Competition & Price Pressure
At some point, the U.S. solar market became overloaded with solar businesses. Hundreds of regional and national installers had to compete for the new customers using every method possible. This has forced installers to:
- Cut prices to win bids, which reduced profit margins
- Overpromise system performance or savings
- To survive in business, they had to cut corners on quality or service after the sale.
Decreasing Government Incentives & Delays in Subsidies
It’s a notable fact that the Inflation Reduction Act (IRA) extended the federal solar tax credit (ITC) until 2032; however, there have been delays in funding or misunderstandings over who is eligible, especially for newer community solar or battery projects. Additionally:
- Rebates, SREC values, and solar carve-outs at the state level have gone down, which makes solar less profitable.
- Small and medium-sized businesses that rely on subsidies couldn’t fill the holes in their finances or figure out the complicated laws fast enough.
Scams & Reputation Mismanagement
Several high-profile collapses were caused by fraud or mismanagement, which automatically added them to a list of solar panel companies to avoid among solar users.
- DC Solar was shut down as a Ponzi scheme.
- Tucson Solar Pros’ owner was arrested for accepting funds without finishing installations.
- Others, like Pink Energy, grew too quickly, failed to honor warranties, and ultimately collapsed under the weight of consumer complaints and lawsuits. Hundreds of Pink Energy lawsuits in North Carolina, Ohio, Virginia, and Georgia claimed the installer misled customers, supplied defective devices, and failed to deliver services.
States Most Affected
California was the most affected state by the number of solar company bankruptcies and business closures in recent years. This fact can be easily explained by the way the industry developed there, as well as the extreme policy changes that occurred.
- California was the first state to adopt solar energy in the U.S. At some point, many households already had rooftop systems, which left less demand for the industry. Additionally, due to high competition, companies had to lower their prices, resulting in a loss of revenue.
- California’s transition from NEM 2.0 to NEM 3.0 in 2023 drastically reduced the value of solar energy exported back to the grid. Net metering, which was once a significant advantage of going solar, is now less attractive to users, as they earn about 75% less for surplus power. Consequently, the payback period increased, and residential solar installations fell by over 80% in some parts of the state. The table below compares the payback period and savings under NEM 2.0 and NEM 3.0 for an average 7.6 kW system with 100% offset.
| Solar under NEM 2.0 | Solar under NEM 3.0 | |
| Monthly energy bill (previously $250) | $18 | $96 |
| Payback period | 4.6 years | 6.5 years |
| Lifetime savings | $116,680 | $73,620 |
- California has higher labor, permitting, and compliance costs compared to other states. The operating margins of solar companies decreased, particularly for those that utilized dealer networks with large commissions, such as Titan Solar and Kuubix.
Arizona, Florida, Texas, New Mexico, Nevada, Massachusetts, and others – multiple closures tied to local incentive cutbacks or deceptive sales.
Major Solar Company Bankruptcies & Closures
The list of solar companies that went out of business in the 2020s is rather big, but let’s have a look at some cases of the big companies’ closure.
- Sunnova Energy International: Sunnova Energy has filed for Chapter 11 bankruptcy protection in the United States, as the residential solar panel installer broke under the burden of increasing debt and weakening demand. They reported $8.9 billion in debt and layoffs of 718 employees.
Source: Bloomberg
- SunPower: On August 5, 2024, SunPower Corporation, a 39-year-old business, declared bankruptcy, and soon after, it started liquidating its assets. Just recently, in 2021, SunPower was valued at $9 billion; however, the business has since collapsed due to severe operational and financial difficulties.
Complete Solar bought SunPower’s Blue Raven Solar, New Homes, Non-Installing Dealer, and brand and trademarks. Complete Solar was renamed to SunPower to support former SunPower clients.
- Titan Solar Power: One of the top residential solar installers in the U.S., filed for Chapter 7 bankruptcy on June 13, 2024. An aggressive dealer-driven sales approach was the primary reason for the business closure. Cooperation with dealers led to overselling and poor installation quality. Numerous Titan Solar lawsuits ruined the installer’s reputation, and after the bankruptcy, many of Titan’s clients were left in a tough situation with:
- Voided warranties
- Unfinished installations
- Poor service and support
EnergyAid, a solar service provider, has acquired Titan Solar Power’s intellectual property. Now, EnergyAid will continue to support Titan Solar Power’s previous clients.
- Sunworks: On February 5, 2024, Sunworks, Inc. and three of its subsidiaries—Solcius, LLC, Commercial Solar Energy, Inc., and Sunworks United, Inc. —filed for Chapter 7 bankruptcy. The filing signaled the end of the company’s business operations and a complete liquidation of its assets. The main reason for Sunworks’ bankruptcy is a significant drop in revenue. Sunworks reported a 30% decline in revenue in the third quarter of 2023, from $40.7 million in 2022 to $28.7 million in 2023
Other big companies that were closed during 2022-2024 due to various reasons, including misleading sales and policy shifts:
Summary of Key Failures
| Company | Year | Location | Reason(s) |
| Sunnova Energy | 2025 | TX | Policy & rate changes, massive debt |
| SunPower | 2024 | CA | Incentive loss, accounting issues, and competition |
| Titan Solar | 2024 | AZ | Dealer model failures, lawsuits |
| Sunworks | 2024 | Multi-state | Market decline, macro stress |
| Pink Energy | 2023 | Multi-state | Misleading practices, lawsuits |
| ADT Solar | 2023 | Multi-state | Financial mismanagement |
| DC Solar | 2018 | CA | Ponzi scheme |
Key Takeaways
The unexpected wave of solar company bankruptcies and closures in the 2020s highlights the importance of a strong financial and regulatory framework to support the growth of the clean energy industry.
It identified the major gaps and planned a large amount of work for installers, governments, and users. It should work as a cooperative effort among all parties, with governments and installers working together to create a healthy business environment where users can choose the best option for them rather than identifying solar panel companies to avoid.
Several elements must be considered to establish a balanced and mutually beneficial collaboration for all parties concerned. Green energy is critical to our planet’s future; however, there are countless opportunities for improvement and effective planning at this time.
