With the recent news of SunPower exiting the installation and servicing business and potentially going bust, Titan closing their doors and Sunrun getting sued once again, it may leave a lot of current solar customers a bit shaken up and worried about the future of their solar systems. If these ginormous and at one point, industry leaders are on the brink of bankruptcy and/or already belly-up, then who exactly can you trust and what can you do if you are a customer of one of these companies? I will address exactly what happens to your solar system, your warranty, your contract and if this is all really worth the potential stress.
Understanding National Solar Providers
First, let’s explain what a national solar provider is, what they do, and what exactly you signed up for if you chose one of the big solar companies.
Companies like SunPower, Sunrun, Sunnova, Palmetto, and Momentum are giant national solar providers. These companies are structured in a way where the main organization, such as SunPower, acts as the financier, equipment distributor, and often the installer. They may have some in-house sales representatives but typically onboard third-party sales organizations, which they classify as dealers. These dealers join the network, allowing the provider to have independent sales teams operating across the country.
This structure is beneficial for both the sales teams and the large solar companies. Sales teams gain access to a variety of solar panels and multiple financing options like leases and loans, which they might not secure independently, especially if they are new. Even more experienced sales companies find it challenging to obtain this level of backing on their own.
For the large parent company, partnering with independent sales teams reduces overhead and provides access to diverse markets that would be difficult to penetrate on their own. This partnership allows them to expand their reach and grow their customer base more effectively.
Understanding Local Solar Providers
In contrast, local solar providers, or Full-Service Installation Providers, operate on a smaller scale, typically serving specific regions or communities.
These are the companies you’d likely discover with a search for “solar installers near me.”
The key difference, apart from their smaller size, is the direct interaction you have with sales professionals who are employed by the company itself. These professionals are not only selling you the system but are also involved in the installation process. This direct engagement translates to greater transparency, honesty, and accountability. Since the local company handles everything in-house, they bear full responsibility for both the sale and the installation, ensuring a more cohesive and reliable service.
In contrast, national solar providers, despite their large-scale operations and good intentions, often rely on third-party sales teams and subcontractors. This can lead to inconsistencies in service quality and communication. Sales representatives working for third-party organizations may make promises or statements that the parent company is now responsible for. Consequently, if issues arise, the parent company may distance itself from any shortcomings or problems, leaving you, the customer, to navigate the fallout with minimal support.
What Happens to Your Warranty and System?
When you sign up with one of the big 5 solar companies, you are typically getting a warranty that covers parts, service and labor for 15-25 years.
If they go out of business for whatever reason, other companies could take over management of owners’ systems. But in some cases in which solar companies have gone bankrupt, consumers are still waiting, sometimes with broken systems, to find out what comes next.
Luckily, solar panels are very low maintenance. Once it is installed on the roof, a good system is like a workhorse. It doesn’t stop working. As long as the sun is shining, your system is working. But of course, technical difficulties could arise and if your provider went bankrupt, you’re going to need to service that system. After all, you’re likely still paying for it.
The good news is there are many many local installers that can help. They may charge for a service call to check the issue that you are calling in for, but a service call shouldn’t cost more than a few hundred dollars. It’s unfortunate that you have to pay anything since you were promised a long warranty but this is the worst-case scenario.
The good thing is even if you have to pay a few hundred dollars for a service call to a local solar installer, your electric bill savings that you accumulate will trump that.
Handling Equipment Replacement
Now what about the equipment? Who will pay for the replacement of a new solar panel of inverter if the company that sold it to you no longer exists?
Thankfully, the equipment manufacturers are all still in existence and all honor their product warranties. As long as the company troubleshooting the defective solar system determines that there is a defective part, that part will be replaced at no cost. You will just be on the hook for the service charge it takes to swap the parts. It shouldn’t cost more than a few hundred dollars depending on the complexity of the job.
So generally speaking, this is your worst-case scenario. But before you even go down that route of finding a local solar shop, let me list out what the exact first steps would be if you find yourself in this situation.
Immediate Steps to Take
1. Gather Documentation
Collect all your paperwork, including contracts, warranties, and any communication with the solar company. This documentation will be crucial if you need to work with a new provider or make a warranty claim.
2. Contact the Manufacturer
If your solar company installed third-party equipment (like panels and inverters), reach out to the manufacturers directly. Many manufacturers have their own warranty programs that remain valid even if the installer goes out of business.
3. Check for Maintenance and Repair Options
Find out if other local solar companies can offer maintenance and repair services for your system. Some companies specialize in servicing systems installed by others, ensuring you can still get professional help when needed.
Understanding Your Warranty
1. Manufacturer Warranties
Most solar panels come with a 25-year performance warranty from the manufacturer, while inverters typically have a 10-15 year warranty. These warranties are usually unaffected by the installer going out of business.
2. Workmanship Warranties
These are often provided by the installer and cover the labor and installation work. If your installer is out of business, these warranties may no longer be valid. In this case, you’ll need to rely on the manufacturer’s warranties and third-party service providers for support.
Financial Considerations
1. Loan Agreements
If you financed your solar system through a loan, continue making your payments as agreed. The loan is separate from the installer’s business status and must be honored to avoid credit issues.
2. Lease or PPA Agreements
For leased systems or those under a Power Purchase Agreement (PPA), check your contract for clauses addressing what happens if the provider goes out of business. Often, these agreements are structured to ensure continued service through a third party.
Finding a New Service Provider
1. Research Local Companies
Look for reputable solar companies in your area that offer maintenance and repair services. Reading reviews and asking for recommendations can help you find a reliable provider.
2. Check Certifications
Ensure the new company has the necessary certifications, such as NABCEP (North American Board of Certified Energy Practitioners) certification, indicating they meet high industry standards.
3. Request a System Evaluation
Have the new provider conduct a thorough evaluation of your existing system to ensure everything is functioning correctly and to establish a maintenance plan.
Wrapping Up
Dealing with a solar company going out of business can be daunting, but it doesn’t mean your solar journey has to come to a halt. With a solid understanding of what to expect and a few proactive steps, you can manage the situation smoothly.
Remember, while national solar providers offer the convenience of widespread operations and resources, local solar providers bring personalized service and direct accountability. If you find yourself needing to switch gears due to a company’s bankruptcy, local installers can step in to help with repairs and maintenance.
Your solar panels are designed to be low-maintenance and durable, continuing to work effectively as long as the sun shines. Should you encounter issues, local service providers are ready to assist, with the cost of service calls often being manageable and outweighed by the savings you’ve accrued from your solar system.
Equipment warranties remain intact through manufacturers, ensuring that defective parts are replaced without additional cost to you, aside from the service fee.
By staying informed and taking the right steps, you can navigate the complexities of a solar company’s closure with confidence. So, whether you’re dealing with warranty concerns or seeking a reliable local installer, rest assured that your solar investment remains valuable and protected.
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