Your solar panel installer no longer exists: It was sold, closed down, filed for bankruptcy or just went out of business. What does that mean for you?
The solar industry has exploded in the last few years breaking residential install records and adoption rates. Where there’s a lot of money to be made, the market can get saturated and there’s often more than a couple of bad apples.
“It’s a pretty crowded market,” said Gilbert Michaud, an assistant professor in the School of Environmental Sustainability at Loyola University Chicago. “With that comes more companies that are playing in the sandbox.”
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ADT Solar, for example, best known for home security, jumped on the solar bandwagon when it purchased Sunpro Solar in 2021 and expanded its solar footprint into 22 states. Just recently, the company announced its departure from the solar industry citing financial challenges.
Unfortunately, not all of those solar companies are going to last. It’s quite possible that after you get solar installed on your roof, the company that did the work goes out of business. Then what?
It might seem like a nightmare scenario — and it certainly is challenging — but there are strategies to keep your solar array in tip-top shape even if your installer is no longer in business. There’s a lot you can do on the front end, like choosing a reliable installer, to prevent the worst outcomes.
Here’s what the experts say you should do if your solar company goes out of business.
Workers install solar panels on the rooftop of a home in Poway, California on Dec. 5, 2023. Experts say its important to choose a good solar installer from the get go.
What happens to my solar lease or loan if my solar company goes out of business?
If you took on a solar lease or loan through a solar company that has gone out of business, the lease or loan should be transferred to a new company — at least in theory.
It depends on your original contract, so Michaud advises digging that up and reading the fine print. You might even get notified that your installer has stopped operating and that your solar panels have a new leaseholder.
If your solar loan is through a bank independent of the installer, nothing should change: You just keep making payments to the lender.
What happens to my warranty if my solar company goes out of business?
If the warranty on your solar panels is with the actual solar panel manufacturer — usually a different company than the installer — then your warranty shouldn’t be affected at all, Michaud said.
That said, you might still want to contact the panel company and ask some questions. Michaud advises looking for a phone number on your equipment and calling the manufacturer. “You can leverage the equipment to help figure out what to do next,” he said.
For example, if your solar installer is SunPower, the solar panel equipment will likely be by Maxeon (CNET’s pick for best solar panel) — the manufacturer.
If your warranty was with the solar installer that is no longer in business, the warranty might be transferred. Technically, a company is obligated to honor the warranty, so there should be some mechanism in place to do that, unless they’re a truly shady actor.
How to protect yourself if your solar company goes out of business?
The best way to protect yourself in this situation is to prepare before it happens. Michaud stresses the importance of finding a solid company in the first place, but there are other steps you can take:
- Buy an extended warranty through the manufacturer of the solar panels, to hedge against the installer going out of business.
- Keep your paperwork in a safe place so that you can reach it easily if you need to re-read your contract or find a phone number.
- If your panels need maintenance that you and your installer can’t do, look into solar operations and management companies that specialize in maintenance. But the same advice applies here: Do your due diligence before hiring anyone.
- If you feel you have been scammed, consider finding legal help.
- If you think you’ve been taken advantage of, the Department of Energy says on its website that you can report suspected scams, fraud and overall “bad business practices” to the Federal Trade Commission.
- On a state level, laws vary. This tool by USAGov allows you to search for your state’s local consumer protection office.
What are ‘Fly-by-Night’ Solar Companies and how do they affect the industry?
A “fly-by-night” solar company is the type of firm mentioned above. It’s one that’s taking advantage of customers and tax credits to generate a lot of revenue while doing the lowest quality work and hoping no one notices.
Michaud said these have a dramatic impact on the solar industry as a whole. “Word of mouth and reputation matter,” he said. “Even one person that has a bad experience … they go tell their neighbors and friends.” That can snowball into a larger sentiment that solar as a whole is some kind of scam, and hurt adoption rates.
As with anything, people who’ve good experiences are usually not as loud as those who’ve had bad ones, so the “fly-by-night” companies create a skewed reputation of the whole industry.
Why it’s important to choose a reliable solar company
Working with a reputable company in the first place can save you a lot of headaches. Here’s a detailed guide to finding the right installer for you.
Michaud advises that homeowners look at reviews, ask their neighbors and make sure the company they choose has insurance and certifications, has been in business for at least five years, and uses high-quality materials. If an offer looks too good to be true, it probably is. “You get what you pay for sometimes,” he said.
Check with the North American Board of Certified Energy Practitioners before signing with an installer.
