What happens if your solar company goes out of business?
If you're a homeowner who needs to get their home solar serviced, it can be an unpleasant shock to learn that your installer has gone out of business. Here's what to do if this happens to you.
Residential solar has taken off like crazy in the United States in the past decade. About 162,000 people in the US work in jobs directly related to solar installation, while solar in general employs a quarter of a million people.
That’s a lot! It’s a huge new sector of the economy. But like any other business sector, there are excellent companies, and some not-so-excellent ones too.
With thousands of solar installers around the country, it’s inevitable that some operations will be poorly run, fall behind their competition, or generally face challenges that cause them to close up shop.
It can be very concerning if this happens to your solar installer - but in most cases, it’s not the end of the world. It might not even matter at all, given that most solar systems will work trouble-free for a couple decades. The main concern for a solar homeowner is what to do when there is a system failure. There is also the special case of financing with a lease or PPA, where an out-of-business solar installer can leave your solar contract in limbo.
Did your solar installer go out of business? In this article we’ll go over some scenarios that might pertain to you, but first let’s quickly review some basics about owning a home solar system.
Solar panels rarely fail
Solar panels don’t have moving parts. In general, they last a really long time - a couple decades or more - even though they spend their life exposed to heat, cold, wind, rain, and even hail and snow. The estimated failure rate for solar panels is a mere 0.05% per year according to research by the National Renewable Energy Laboratory.
This is generally true regardless of whether you buy a premium or budget solar panel. In fact, 3rd-party testing has shown that Chinese brands, which are often dismissed in the US as being inferior in quality, are actually some of the most reliable.
So, while it can happen, a panel failure is pretty unlikely. What’s a little more likely is an inverter failure.
If you do experience a failure, it’ll probably be the inverter
The inverter - or inverters, if you have a microinverter-based system - are responsible for converting the DC power from your solar panels into usable AC power. In general, they too are very reliable. The most common brands for residential installations include SMA, Enphase, and SolarEdge, and these come with a minimum 10 year warranty, or as long as 25 years in the case of Enphase.
Except sometimes for a cooling fan, inverters don’t have moving parts either, but they do have electronics are complex and deal with incoming electricity at hundreds of volts and thousands of watts. They perform other functions too, such as filtering the electricity to provide a smooth signal to your home, and dealing with surges that would otherwise damage equipment.
This involves hundreds of discreet electronic components and sophisticated software. Of all the components in your home solar system, its the inverter that has the most demanding job.
While there is inverter reliability testing being done, there have been fewer studies on how inverters have performed in the real world than for solar panels.
Anecdotally, both SolarEdge and Enphase have had some reliability problems in the past.
With Enphase, their M190 and M210 series products experienced a number of early failures - so much so, the company instituted a replacement program. Their recent lineup of products is generally acknowledged to be higher quality.
SolarEdge has also been accused of having high failure rates. According to some installers I’ve spoken with, there have been some problematic production runs in recent years.
When do solar components fail?
Fortunately many solar system failures, including inverter failures, are what in industry lingo is known (rather grimly) as infant mortality - that is, they fail very soon after installation. This can be a matter of weeks or months.
If your solar panels and inverter are all working correctly a year after installation, the odds are pretty good that they’ll last their expected lifetime.
In the case of an inverter, the expected wear-out period is sometime after their warranty expires - about a decade in the case of a central inverter, or 25 years for SolarEdge power optimizers or Enphase microinverters.
This doesn’t mean that a mid-life failure can’t happen, but they are less common.
Early component failures, while certainly not good a thing, are at least better in terms of getting warranty service. Not only should you be within your warranty period, but your installer is more likely to be around a year after installation than if you have a failure after 24 years.
How do I know if I’ve had a system failure?
For day-to-day monitoring, you will probably have a smartphone app or webpage that will tell you the output of your system. Get in the habit of checking it regularly, and become familiar with how much electricity you typically generate in different weather conditions. This way, you’ll be able to tell if you have abnormally low electricity production based on what the system historically produces.
With more sophisticated inverter systems - those with microinverters or power optimizers - you’ll have panel-level monitoring. This will give you a more granular view that will tell you exactly which panels are having a problem.
Also, you can often configure the monitoring system to send you an email if a failure is detected, giving you a rapid warning when something goes wrong.
What do you do if you notice a failure?
If you check your monitoring system and see some type of failure notification, the first step is to try to determine if it’s an inverter or panel failure.
With a central inverter, there should be status lights that can tell you if the inverter is functioning or not. Or, the web-based monitoring system will display a notification.
In the case of microinverters, the monitoring system should tell if you if the microninverter is reporting data but receiving power from the panel, or is simply not communicating. If it’s not communicating, the inverter is probably dead. If it’s still reporting but has low or no power, the inverter is probably alive and you have a dead panel.
The next step is to take a step outside and see if you can get your eyes on the failed panel.
While some failures won’t be visible, a lot of causes for a failed panel can be spotted from the ground. Look for obvious physical damage, such as cracked glass. Electrical failures known as hot spots are also visible as discloration in the panel. Try to peek on the underside of the panel, in the gap between the rear of the panel and roof. You might be able to spot wire damage, which could be caused by vermin chewing on the wires.
If you don’t see anything obvious, it’s time to call your solar installer for an onsite visit.
What do you do if your solar installer has gone out of business?
Some of the biggest names in residential solar installation have gone out of business, such as Sungevity and Petersen Dean. Smaller companies have failed too, like Sungate Energy, Suncrest Solar, Akeena Solar, Code Green Solar, American Solar Direct, and many more.
If your original installer has gone out of business, the first thing to do is to check your original contract and look for the section on warranty coverage.
It’s possible that warranty service may be provided by a third party or a parent company. This is particularly true if your installer was a licensed dealer for a premium solar panel such as LG or SunPower. In these cases, the warranty service will be covered by the parent company. Service will either be provided by another installer in their network, or you may need to seek out a company on your own and then be reimbursed by the manufacturer for the labor cost.
We know of four solar panel companies that cover labor costs in their warranty: Silfab, Panasonic, LG, and SunPower. Read our article on the best solar panel warranties to learn more.
If your installer was a licensed dealer for one of these companies, you might be in luck. Go to the manufacturer’s website, and look for the support section where the warranty information is listed. Contact them, and let them know about your situation with your original installer. With luck, the process of making a warranty claim should be smooth.
What if I’m not covered by a labor warranty, but the component is still under a product warranty?
If your failed component isn’t from a premium manufacturer that offers labor coverage, but is still covered by a product warranty, you’ll have to find a different installer on your own to do the replacement work, and help you make your warranty claim.
The process of finding a company to provide solar repair service is very similar to getting quotes to do a full installation: you want a reputable company, and preferably one that is local rather than one of the huge national companies. You also want to avoid really small “guy with a truck” type companies. Our article on how to find a great solar installation company may be helpful to you.
If you need help, you can fill out our form to get solar quotes. (Add a note in the comment field that you need service for an existing system, and describe the problem as best as you can.)
If the cost of the quoted repair job is small, it’s probably fine to just get a single quote. However, if you learn that the problem is going to be more extensive, get multiple quotes. You’ll want a second (or third) opinion about the repair, and get multiple options for the replacement equipment.
Some solar companies won’t touch other installations
If you call up companies to repair your system, you might find that some companies don’t want to touch it, even if the equipment is still under a manufacturer’s warranty.
This is because they feel it’s too risky to work on a system installed by someone else. Even if the fix isn’t complicated, it’s often true that bankrupt solar companies are bankrupt because they weren’t very good and did shoddy work.
For this reason, some companies won’t want to touch it. The risk for the company doing the repair is that they may be held liable for other problems that crop up in the future.
But many firms will happily do repairs on systems installed by other companies, so call around. (Or use The Solar Nerd to find one.)
Panel failure? Sometimes the best thing is to ignore it
If you have panel-level monitoring from a microinverter and can see that one panel has failed, you don’t necessarily have to repair it. Sometimes the best thing to do is ignore it.
This might be the case if your system is getting older. Do a little napkin math, and calculate the value of the electricity that your panel would generate if it lasted to its expected 25 year lifespan.
Then, compare that to the cost of a service call to replace the panel. If the cost of the service is higher than the electricity you generate, it might make sense to just ignore the failure and accept the small loss in power generation. It’s not affecting the rest of the system, and it would cost more to replace the panel that the value you would get out of fixing it.
However, this might not be the case if you have a string-based inverter system. In this case, one failed panel can knock out several neighboring panels, like a broken bulb on a string of cheap Christmas lights. (This is another advantage that microinverters have over other inverter types.)
Don’t forget about your homeowner’s insurance
Solar panels are often covered by many homeowner’s insurance policies, but not always. It’s critical to contact your insurer after you have solar panels installed. Be aware that because you’re adding value to your home, your premium may increase.
If your solar panels are covered, you may be able to make a claim on a system failure you experience. However, not all types of failures treated the same by every insurer. Damage to the system by a falling tree, a hurricane, or hail may or may not be covered. Vermin-inflicted damage (ie. squirrels chewing on wires) is often not covered.
The specifics depend on your particular policy, so contact your insurer to find out.
Leases and power purchase agreements: a special case and potentially a big headache
If you obtained your solar system with a lease or power purchase agreement and your solar installer has gone out of business, you’re potentially in for a big problem. This is because you don’t own the system: the company does. If the solar company goes out of business, its customers may be left in limbo.
This is exactly what happened when Sungevity, a formerly large national solar installer that relied heavily on leases for its business model, went out of business. Luckily, Sungevity’s customers were eventually acquired by Sunrun, allowing the customers continued service.
But future lease/PPAs customers might not be so lucky. Certainly, there’s no single solar installer large enough to take on Sunrun’s lease contracts if it ever went out of business.
This risk is one of many reasons why we don’t recommend solar leases/PPAs.
What about a leaking roof?
A leaky roof is one of the main concerns with a rooftop solar array and a frequent reason for service calls.
Solar mounting products have evolved and gotten better over time, and make it easier for installers to perform an installation that will remain waterproof for decades.
Poorly performed installations, or installations that rely on sealants for waterproofing that age and fail over time, can cause a roof to leak at the penetrations where the solar racking is attached to the roof.
However, it can be difficult to positively determine the cause of a roof leak. Cases where it’s suspected that solar mounts are the cause of a leak are often traced to another cause: critters that have gnawed into the roof, or missing or rotted shingles are some examples.
Regardless of whether your original installer is in business or not, diagnosing a roof leak is best left to a good roofer. If they find that the solar installation is at fault, hopefully your solar installer has a warranty that covers the roof - many in The Solar Nerd network do. If not, you’re out of luck and will have to pay for the repair out of pocket.
Bottom line: even if your installer has gone out of business, you still have options
While it’s certainly annoying to have a failure with a system that was installed by an out-of-business company, it’s not the end of the world. Just remember these tips:
- When you initially purchase your system, keep all of the paperwork. This includes the contract and warranty information. Be sure to know the make and model of your panels and inverter so that you can look up the warranty information in the future.
- If your system is by SunPower, LG, Panasonic, or Silfab, you might be in luck and covered by the manufacturer’s warranty.
- Be selective in choosing a good company to repair your system. Remember - the repair work should come with its own warranty too.
- Know your homeowners insurance policy. If you’re fortunate, any system failures or roof leaks will be covered by your policy.