Your Solar Company Went Bankrupt, Now What?

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.

Types of Solar Company Bankruptcy

Not all bankruptcies are the same, and the type of filing significantly affects what happens to your solar contract.

Chapter 11: Reorganization

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:

• The company generally continues operating under court supervision
• Existing contracts may be assumed (continued) or rejected (terminated)
• The company must decide within a certain period which contracts to keep
• You may continue receiving service, though possibly from a reorganized entity

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.

Chapter 7: Liquidation

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:

• The company stops providing all services immediately
• Your contract may be sold to a third party as an asset
• Workmanship warranties may become unenforceable
• You may need to find new service providers immediately

Simply Closing (No Formal Bankruptcy)

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.

What Happens to Your Lease or PPA

If you have a solar lease or power purchase agreement (PPA), a company bankruptcy creates a particularly complex situation.

Your Contract Is Typically an Asset

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.

During the Transition

The period between bankruptcy filing and contract transfer can be confusing. You may experience:

• Uncertainty about payments. You may not know who to pay or where to send payments. Generally, continue making payments as required until officially notified of a change.
• Service disruptions. Maintenance requests may go unanswered during the transition.
• Communication gaps. You may receive conflicting information from different parties.

Your Obligations Continue

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.

What Happens to Your Solar Loan

Solar loans are structured differently from leases and PPAs, which affects how bankruptcy impacts you.

Your Lender Is Usually Separate

Most solar loans are issued by third-party lenders: banks, credit unions, or specialized solar financing companies, not the solar installer. This means:

• Your loan obligation continues regardless of the installer's bankruptcy
• You still owe the full loan balance
• The lender can still report missed payments to credit bureaus
• The lender's collection rights are generally unaffected by the installer's bankruptcy

Dealer Fee Issues

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.

The FTC 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.

What Happens If You Paid Cash

If you purchased your solar system outright (cash or through a separate personal loan), your situation is generally simpler, but not without challenges.

You Own the Equipment

The solar panels, inverters, and racking on your roof are your property. The company's bankruptcy doesn't change that. However, you may lose:

• The installer's workmanship warranty
• Any ongoing maintenance or monitoring services
• Access to proprietary monitoring software or systems
• Support for warranty claims with equipment manufacturers

Manufacturer Warranties Remain

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.

Your Warranty Situation

Understanding which warranties survive a bankruptcy is critical for protecting your investment.

Installer Workmanship Warranty. Likely Lost

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.

Solar Panel Manufacturer Warranty, Usually Survives

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 Manufacturer Warranty, Usually Survives

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.

Roof Penetration Warranty. Likely Lost

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.

System Maintenance Without Your Installer

With your original installer gone, you'll need to arrange for ongoing maintenance and any repairs.

Finding a New Service Provider

Most solar systems require relatively little maintenance, but when issues arise, you'll need a qualified technician. To find one:

• Contact your panel or inverter manufacturer for certified service providers in your area
• Search for NABCEP-certified solar installers (the industry standard certification)
• Ask other solar homeowners in your area for recommendations
• Check with your local solar energy association for referrals

Monitoring Your System

If your system's monitoring was tied to the installer's platform, you may lose access. Options include:

• Manufacturer monitoring: Many inverter manufacturers (Enphase, SolarEdge) offer their own monitoring apps that work independently of the installer
• Third-party monitoring: Services that can monitor your system performance
• Manual monitoring: Tracking your utility bills and comparing production to historical data

Routine Maintenance Tasks

Basic solar system maintenance that you or a professional can handle:

• Annual visual inspection of panels for damage or debris
• Checking mounting hardware for looseness or corrosion
• Clearing debris from around and under panels
• Monitoring for unusual drops in energy production
• Inspecting roof penetration points for signs of leaks

UCC Liens and Bankruptcy

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.

The Lien May Transfer

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.

Getting the Lien Removed

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 →

Is This an Opportunity to Exit?

A solar company's bankruptcy can sometimes create opportunities for homeowners who want out of their contracts.

Contract Rejection

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.

Negotiating with the Successor

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.

Potential Exit Strategies

• Negotiate a buyout with the successor at a potentially reduced rate
• Assert breach claims if the bankrupt company failed to meet its obligations
• File a claim in the bankruptcy proceedings for damages if the company's failures caused you harm
• Request contract rejection through the bankruptcy court if the contract is genuinely burdensome

Complete guide: How to get out of a solar panel contract →

Steps to Protect Yourself Now

Whether your solar company has already filed for bankruptcy or you're worried it might, here are practical steps to protect yourself:

About Solar Cancellation Companies

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 →

Frequently Asked Questions