SOLAR EXIT GUIDE
When a solar company files for bankruptcy, homeowners are often left with unanswered questions about their contracts, warranties, and the equipment on their roof. This guide explains what typically happens and what steps you can take to protect yourself.
Published March 28, 2026 · Not legal advice · Our methodology
Solar company bankruptcies have become increasingly common as the industry has matured. Based on our research, hundreds of solar companies have closed their doors in recent years, leaving homeowners uncertain about their contracts, warranties, and maintenance obligations. The impact on you depends largely on how you financed your system — lease, PPA, loan, or cash purchase — and whether the company reorganizes or liquidates entirely.
In This Guide
Not all bankruptcies are the same, and the type of filing significantly affects what happens to your solar contract.
In a Chapter 11 filing, the company attempts to restructure its debts and continue operating. This is the more common scenario for larger solar companies. During reorganization:
Examples of solar companies that have filed Chapter 11 include SunEdison (2016), which was one of the largest solar bankruptcies in history, and more recently several mid-size installers as the industry has consolidated.
In a Chapter 7 filing, the company ceases operations entirely and its assets are sold to pay creditors. This is a more serious scenario for homeowners because:
Some solar companies simply close their doors without filing formal bankruptcy. This can actually be worse for homeowners because there's no structured legal process for dealing with existing contracts. The company may just become unreachable, leaving homeowners with no clear path forward.
Important: If you receive notice that your solar company has filed for bankruptcy, don't ignore it. Bankruptcy court notices may include deadlines for filing claims, and missing these deadlines can forfeit your rights. Consider consulting a bankruptcy attorney if you have significant concerns.
If you have a solar lease or power purchase agreement (PPA), a company bankruptcy creates a particularly complex situation.
Your lease or PPA is generally considered an asset of the bankrupt company. In most cases, these contracts are sold to another solar company or financial institution during the bankruptcy process. The new company "steps into the shoes" of the original company and assumes its obligations under your agreement.
The period between bankruptcy filing and contract transfer can be confusing. You may experience:
In most cases, your obligations under the lease or PPA continue regardless of the company's financial difficulties. The contract typically survives bankruptcy and transfers to the successor. However, the successor must also honor the original terms — they can't unilaterally change your rates, lease terms, or other provisions.
Pro Tip: If your solar company files for bankruptcy, request written confirmation from the bankruptcy trustee or successor company about who now holds your contract, where to direct payments, and who handles maintenance requests. Keep this documentation in your files.
Solar loans are structured differently from leases and PPAs, which affects how bankruptcy impacts you.
Most solar loans are issued by third-party lenders — banks, credit unions, or specialized solar financing companies — not the solar installer. This means:
Some solar loans include substantial "dealer fees" (sometimes 20-30% of the loan amount) that the lender pays to the solar company. If the system has defects and the company goes bankrupt before fixing them, you may be stuck paying a loan that includes fees for services never properly rendered. In some cases, homeowners have pursued claims against lenders under state consumer protection laws or the Federal Trade Commission's Holder Rule.
If your solar loan includes the required FTC Holder Rule notice (many do), you may be able to assert claims and defenses against the lender that you would have had against the solar company. This is a complex legal area, and consulting an attorney is generally recommended if you believe this applies to your situation.
If you purchased your solar system outright (cash or through a separate personal loan), your situation is generally simpler — but not without challenges.
The solar panels, inverters, and racking on your roof are your property. The company's bankruptcy doesn't change that. However, you may lose:
This is the good news: equipment manufacturer warranties (panel warranties, inverter warranties) are typically between you and the manufacturer, not the installer. These warranties generally survive the installer's bankruptcy. Contact the manufacturers directly to register your warranty and understand the claims process.
Solar company went bankrupt? Get a free contract review to understand your options and protect your interests.
Understanding which warranties survive a bankruptcy is critical for protecting your investment.
The installer's workmanship warranty covers installation quality — roof penetrations, wiring, mounting, etc. If the installer goes bankrupt and ceases operations, this warranty typically becomes unenforceable. There's simply no company left to make good on the warranty.
Major panel manufacturers like SunPower, LG, REC, Canadian Solar, and others offer product and performance warranties of 25 years or more. These warranties are between you and the manufacturer and generally survive the installer's bankruptcy. Contact the manufacturer to ensure your system is registered.
Inverter warranties from companies like Enphase, SolarEdge, and others typically run 12-25 years and are also between you and the manufacturer. Register your inverters directly with the manufacturer if you haven't already.
If your installer provided a separate roof penetration warranty or leak-free guarantee, this may be lost with the company. Consider having an independent roofer inspect your mounting points and sealants.
| Warranty Type | Typical Duration | Survives Bankruptcy? |
|---|---|---|
| Installer workmanship | 5-25 years | Generally no |
| Panel manufacturer | 25-30 years | Generally yes |
| Inverter manufacturer | 12-25 years | Generally yes |
| Roof penetration | 10-25 years | Generally no |
| Battery manufacturer | 10-15 years | Generally yes |
With your original installer gone, you'll need to arrange for ongoing maintenance and any repairs.
Most solar systems require relatively little maintenance, but when issues arise, you'll need a qualified technician. To find one:
If your system's monitoring was tied to the installer's platform, you may lose access. Options include:
Basic solar system maintenance that you or a professional can handle:
If you have a solar lease or PPA, the leasing company may have filed a UCC-1 financing statement (lien) on your property to secure their interest in the equipment. When a solar company goes bankrupt, this lien situation can become complicated.
When the lease contract is sold to a new company, the UCC lien typically transfers as well. The new company should file an updated UCC statement, but this doesn't always happen promptly, which can create title issues if you try to sell or refinance your home.
If the bankrupt company's lien remains on your property without a clear successor, you may need to petition the bankruptcy court for a lien release. This is another situation where legal assistance is generally recommended. Read our complete UCC lien removal guide →
A solar company's bankruptcy can sometimes create opportunities for homeowners who want out of their contracts.
In bankruptcy, the trustee may choose to reject certain contracts that are burdensome or unprofitable. If your contract is rejected, you may be released from your obligations, though you might also lose certain benefits. Contract rejection can give you leverage to negotiate a favorable exit.
When a new company acquires your contract, they may be willing to negotiate terms — including early termination — to reduce their risk and establish goodwill. The transition period is often the best time to negotiate because the successor company is trying to retain customers.
Complete guide: How to get out of a solar panel contract →
We do not advise homeowners to stop making payments or breach contractual obligations — even when the solar company is in bankruptcy. Your payment obligations typically continue, and failure to pay can result in collections activity and credit damage. Consult a qualified attorney about your specific situation.
Whether your solar company has already filed for bankruptcy or you're worried it might, here are practical steps to protect yourself:
If a bankruptcy situation creates an opportunity to exit your solar contract, some companies specialize in helping homeowners navigate this process. See our review of the best solar cancellation companies →
Ownership Disclosure: SolarPanelExit.com and TRU Solar Cancellation share common ownership. TRU Solar Cancellation offers a Solar Exit Document Package for a one-time $450 fee. TRU is not a law firm and does not provide legal advice. See our full ownership disclosure for details.
If your solar leasing company files for bankruptcy, your lease contract is generally treated as an asset that may be sold to another company during bankruptcy proceedings. You typically remain obligated under the lease terms, and a new company assumes the lessor's role. However, the transition period can create confusion about who to pay and who handles maintenance. Request written confirmation from any successor company.
Generally, yes. Your obligation to make payments typically continues even if the solar company files for bankruptcy. Your contract may be assumed by a successor company or assigned to a new entity through the bankruptcy process. We do not advise homeowners to stop making payments or breach contractual obligations. Consult a qualified attorney about your specific situation.
The installer's workmanship warranty may become unenforceable if the company ceases operations. However, equipment warranties from panel and inverter manufacturers are typically separate and may remain valid regardless of the installer's status. Contact manufacturers directly to register your warranties and understand the claims process.
Bankruptcy alone may not automatically void your solar contract. The bankruptcy trustee typically decides whether to assume or reject existing contracts. If the contract is rejected, you may have a claim in the bankruptcy proceedings. If it's assumed and assigned to a new company, the contract generally continues. However, the transition period may create negotiation opportunities. Results vary significantly by situation. Learn more →
If your installer closes, you'll generally need to find a new solar maintenance provider. For leased systems, the new lease holder should take over maintenance responsibilities. For owned systems, you'll need to hire an independent solar technician. Equipment manufacturers can often recommend certified service providers in your area.
Solar loans are typically issued by a third-party lender, not the solar company itself. If the solar company goes bankrupt, your loan obligation generally remains with the lender. You typically still owe the full loan balance regardless of the installer's status. However, if the system has defects, the FTC Holder Rule may give you certain claims against the lender. Consult an attorney about your specific circumstances.
Get a free contract review to understand your rights and explore your options for moving forward.
Disclaimer: This article is for informational purposes only and is not legal advice. Bankruptcy laws and consumer protections vary by state and case. Results vary by individual situation. We do not advise homeowners to stop making payments or breach contractual obligations. SolarPanelExit.com and TRU Solar Cancellation share common ownership. Consult a qualified attorney before taking action regarding your solar contract. See our Ownership Disclosure, Advertiser Disclosure, and Methodology.