The Rooftop Solar Industry Could Be On the Verge of Collapse

[fromport]

Residential Solar Is In Trouble

Complicated financial products helped the U.S. rooftop-solar-power industry grow, but now put it at risk of implosion.

time.com

A decade ago, someone knocking on your door to sell you solar panels would have been selling you solar panels. Now, they are probably selling you a financial product—likely a lease or a loan.

In late 2023 alone, more than 100 residential solar dealers and installers in the U.S. declared bankruptcy, according to Roth Capital Partners—six times the number in the previous three years combined.
The two largest companies in the industry, SunRun and Sunnova, both posted big losses in their most recent quarterly reports, and their shares are down 86% and 81% respectively from their peaks in January 2021.

SunRun itself has disclosed in investor filings that it is in the midst of an IRS audit. One Wall Street analyst, Gordon Johnson, alleges that SunRun has claimed $40 billion in tax subsidies it didn’t deserve, and calls this “the biggest tax fraud in the history of the U.S.” (SunRun says that the independent appraisers who estimate the values of SunRun systems do so consistent with industry best practices, and investors and lenders have “closely diligenced” its tax and valuation procedures.)

 

[chrisski]

Do you think changes in net metering with lower rates to the consumer are making the market go down?

After the tax rebate, if all you can do is sell electricity back at $.07, will take a long time for the system to pay for itself.

 

[OPTIMALSOLAR]

For most of the last 20 years the cost to borrow money was at historical lows. Not the case currently. Most people finance installations. Most loans are decades long. The added finance cost means far longer, if ever, roi.

The other factor is utilities have figured out it is better to pay less for excess production. In Texas net metering is nearly nothing. This too leads to longer term roi.

The good news is battery costs are coming down so excess can be stored more reasonably. The other good news is the solar bro is going the way of the pet rock.

 

[DIYrich]

The chickens eventually come home to roost (unethical door-to-door sales). Will there be a pullback in the Roof Top Solar Industry overall - most likely. Especially as areas are built up and grid stability becomes an issue. Does that mean the industry will "implode" - not likely. China will dump panels from over production. Ethical installers that do not rely on high pressure door-to-door sales will do just fine.

 

[JBertok]

Good. The Rooftop Solar INSTALLATION industry, as it stands today, needs to be decimated. Generally speaking, that segment is predatory and misleading, and uses the same tactics car dealers do where they talk only about monthly payment and not interest or term. Solar Installers are in the Loans and Financing business, not the construction or clean energy business. I personally have friends who went into that field (against my advice) because there was "so much money to be made" even though they had zero knowledge on or passion for solar at all. Incompetence is rampant and unethical conduct is the norm. Where ever there is financial government incentive, there will be exploitation. It needs to go back to being just CSLB/C10/C46 contracting, and if someone needs a loan they can borrow it from their equity or otherwise just like any other residential construction project. At the prices of the equipment today, a complete battery-backed zero-sell solar system can stand on its own merit financially for almost anyone. I think when domestic sodium-ion production reaches mainstream volumes there won't be any enough margin opportunity left for these loanshark installation parasites to survive.