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 2026, a wave of bankruptcies and solar companies going out of business occurred in the United States.
Since 2022, the U.S. residential solar market has gone through a prolonged wave of bankruptcies, closures, restructuring, and asset sales. The pressure did not end in 2025: in 2026, Freedom Forever, one of the largest residential solar installers in the country, filed for Chapter 11 bankruptcy, showing that the market correction is still unfolding.
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.
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.
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:
The collapse of solar financing platforms also shows how deeply financing conditions affected the industry. Mosaic, a major residential solar lender, filed for Chapter 11 bankruptcy in 2025 after backing more than $15 billion in home energy loans. Its bankruptcy showed that the crisis was not limited to installers; it also reached the financing infrastructure that helped homeowners afford solar systems.
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.
Policy risk has expanded beyond state-level net metering changes. While California’s NEM 3.0 reduced export credit value and weakened the economics of rooftop solar, federal incentive changes have added a new layer of uncertainty. The IRS states that the Residential Clean Energy Credit is not available for property placed in service after December 31, 2025, which makes homeowner-owned solar less attractive without another major incentive to offset upfront costs.
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.
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:
Federal and state incentive uncertainty has become one of the biggest challenges for residential solar companies. For years, the 30% Residential Clean Energy Credit helped homeowners justify the upfront cost of solar panels, batteries, and related clean energy improvements. However, the IRS now states that the credit is not available for property placed in service after December 31, 2025.
This change creates a new demand problem for installers. Without the federal credit, many homeowners may face longer payback periods, weaker projected savings, and a higher upfront cost. For companies already affected by high interest rates, lower California export credits, and weaker consumer demand, the loss of this incentive adds another layer of financial pressure.
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.
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.
| 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 |
Arizona, Florida, Texas, New Mexico, Nevada, Massachusetts, and others – multiple closures tied to local incentive cutbacks or deceptive sales.
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.
Source: Bloomberg
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.
In 2025, EnergyAid acquired Titan Solar Power’s intellectual property and system data to support former Titan customers. This update is important for homeowners because it shows that some customers may still be able to find third-party support even after their original installer shuts down.
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) |
|---|---|---|---|
| Freedom Forever | 2026 | CA / multi-state | Chapter 11, high liabilities, continued residential solar market stress |
| Sunnova Energy | 2025 | TX / multi-state | Chapter 11, heavy debt, weaker demand, asset sale |
| Mosaic | 2025 | CA / solar finance | Chapter 11, financing pressure, high interest rates |
| SunPower | 2024 | CA / multi-state | Chapter 11, accounting issues, market pressure, asset sale |
| Titan Solar Power | 2024 | AZ / multi-state | Chapter 7, dealer model issues, lawsuits, stranded customers |
| Sunworks | 2024 | Multi-state | Chapter 7, revenue decline, market stress |
| ADT Solar | 2024 | Multi-state | Exited residential solar business |
| Pink Energy | 2022 | Multi-state | Lawsuits, consumer complaints, warranty issues |
| DC Solar | 2018 | CA | Fraud / Ponzi scheme |
The wave of solar company bankruptcies in the 2020s shows that residential solar depends on more than customer demand. Installers also need stable financing, realistic sales practices, clear policy support, and enough cash flow to honor long-term service and warranty obligations.
The crisis did not end in 2024 or 2025. New filings, financing failures, and policy changes continued to affect the industry into 2026. For homeowners, the key lesson is not only to search for solar panel companies to avoid, but to evaluate installer stability, warranty structure, financing terms, customer reviews, and who will service the system if the original company closes.
For the solar industry, the lesson is equally clear: long-term trust matters as much as fast growth. Companies that depend on aggressive sales, unclear financing, or weak post-installation support are more vulnerable when incentives change, interest rates rise, or demand slows.