Sungevity: a solar company back from the dead
Bankrupt, reborn as Solar Spectrum and Horizon Solar Power, and now faced with mass layoffs, Sungevity is a company that continues to hang on.
At one point, Sungevity was the 5th largest residential solar installer in the United States.
In 2017 it died (Chapter 11 bankruptcy), sold its assets, was reborn as a new company called Solar Spectrum, merged with another California installer called Horizon Solar Power, and then it brought back the Sungevity name. Along the way, it used debt and private equity to pursue a strategy of high growth - presumably to keep up with other high growth rivals like Sunrun and Vivint.
Then, in March 2020, it laid 400 people. It blamed the coronavirus which had just shut down California, but the fact is that the company was in trouble before that.
And yet, the company lives on, with three different brand names. If you’re thinking of choosing Sungevity, Horizon Solar Power, or Solar Spectrum as your solar installer, you definitely want to know about the history of the company before signing a contract. This article will give you the lowdown on each of the Sungevity brands, but first let’s dig into the company history a little more.
Sungevity goes bankrupt: what happened to its customers?
When you hire a small local solar installer, the transaction is usually just a straight purchase. You might pay cash, or maybe you get a deal on a loan through a financing partner the installer works with, but at the end of the job you get an invoice, and you pay up.
Not so with many large national installers, including pre-bankruptcy Sungevity. Instead, they like to sell leases to customers. These are financial products that seem attractive because you can get solar panels for no-money-down, but over the long run you’ll usually pay more than if you bought the system outright. Meanwhile, the company keeps the tax incentives and earns long-term revenue.
Pre-bankruptcy Sungevity offered leases. When a customer leases a home solar system, they’re essentially renting it from the company. Because Sungevity’s customers didn’t own their systems, when the company went bankrupt these customers had a lot of nervous questions about their leases. Would their systems continue to work? Who would provide service if the systems broke down? What if they wanted to get out of their leases?
Fortunately for them, Sunrun (the largest solar installer in the country) came in and picked up Sungevity’s lease customers, making them Sunrun customers. The customers continued to have uninterrupted service, but they were lucky.
This raises the question of what would happen if a behemoth like Sunrun went bankrupt, given that there may not be one company that is large enough to acquire all of their leases.
Sungevity today doesn’t seem to be licensed to install solar systems
The Sungevity brand lives on, and they have a lovely website with drone photos of beautiful homes with solar panels and a smiling guy in a hard hat holding a solar panel. According to their website, they offer installation services in California, Colorado, Connecticut, Massachusetts, and New Jersey. They’re still offering leases and PPAs.
Despite the glossy website, it’s not clear that Sungevity is licensed to actually install solar in any of these states.
Licensing requirements differ from state-to-state. Some states, like California, have a specialized solar photovoltaic license classification. In other states, contractors with general electrical licenses are allowed to install solar.
Bottom line: you need a license to install solar, and the Sungevity brand doesn’t seem to be licensed to install solar in the states we checked. For example, here’s what you get when you search the California Contractors State License Board:
The last license - #909236 - is an expired licensed for the actual Sungevity name. In addition to being expired, there are two complaints dated 2019 that are associated with that license, both for non-compliance.
A similar situation exists for other states: in those states where Sungevity operates and you can check licenses online, all of them only turn up expired licenses. This includes Colorado, Connecticut, and New Jersey.
If it’s true that Sungevity doesn’t have a license to install solar in a state, what service can they provide? It would mean that they are just a marketing company that outsources the installation to one of their affiliates (Horizon or Solar Spectrum), or a local installer.
Subcontracting is common in the solar industry, and it’s not always bad. For example, smaller installers may partner with local roofing companies for jobs that have more technically challenging roof work. But some large companies, including the giant Sunrun, don’t staff their own crews in all of their service areas but instead outsource the job to local installers.
It doesn’t make much sense to pick a company like Sungevity or Sunrun if all they’re doing is hiring a local company on your behalf, because both companies will need to make a profit on the job, likely raising the cost for you the customer. Instead, just hire a local installer directly. You’ll know who you’re working with, and you’ll probably get a better price too.
Horizon Solar Power
Horizon Solar Power is a Sungevity-affiliated company based in Temecula, CA that installs solar throughout California. Their full branding is “Horizon Solar Power, powered by Sungevity”, which is quite a mouthful.
While there doesn’t seem to be a good reason to hire Sungevity to install solar on your home, how about Horizon?
As noted above, Horizon Solar Power does have a current California license, but if you take a closer look you can see the company has 4 violations on record:
- Violated Government Code 4216-‘California One Call Law’
- Violated building law - no permit
- Violated safety orders/death or injury
- License name style variation
All of these are quite concerning (especially death or injury!). The current status of these complaints is “Referred to legal action”, which means:
a complaint has been closed alleging violations of the Contractors License Law but no legal action has been taken to date.
Whether or not CSLB pursues legal action in the future, having these types of complaints is enough reason to avoid a contractor.
They also have only 1.5 stars on BBB and 46 customer complaints, which is… a lot of complaints.
If you live in California, there are many excellent local contractors to choose from. Don’t pick one with a questionable record.
According to their website, Solar Spectrum services California, Colorado, Connecticut, Delaware, District of Columbia, Kansas, Maryland, Massachusetts, Missouri, New Jersey, New York and Rhode Island.
As far as we can tell, Solar Spectrum does have licenses in California, Connecticut and New Jersey. License searches for other states don’t turn up anything, but that doesn’t necessarily mean the company doesn’t have a license. Often a company will operate under a different name than the one they are registered with, making database searches difficult.
However, it seems likely that Solar Spectrum is outsourcing their installations, just like the Sungevity brand is. If you click on the careers page of the Solar Spectrum website, you get sent to the Horizon Solar Power website, where they are (at the moment) advertising for only one inside sales job located in Minnesota.
Their ratings on BBB are solidly mediocre, with 2.5 stars and 33 complaints on record.
Bottom line: kind of a confusing mess
With a history of bankruptcy, a business model that continues to push leases and PPAs, missing licenses and license violations, highly confusing branding, and a class action lawsuit, there’s a lot to be concerned about with Sungevity and its affiliated brands.
There are literally thousands of rooftop solar installers in the United States. If you are thinking of going solar, you can certainly find great local companies that don’t have such a problematic past.
By the way, the review sites BestCompany.com and ConsumerAffairs.com both give positive reviews to Sungevity. Somehow, neither of them mention key things like the fact Sungevity went bankrupt or that one of its affiliated brands has license violations. As mentioned in our 10 tips on how to pick a good solar company, some review sites are better than others, and Consumer Affairs in particular has a history of pay-to-play.
If you are thinking of going solar, we can recommend multiple options for getting quotes including getting quotes from our careful screening process.