Huge Solar Company Goes Under, Signaling a Troubling Trend for the Failing Industry

By: Elizabeth | Published: Jul 10, 2024

Titan Solar, one of America’s largest installers of residential solar panels, helped 100,000 households go solar before shutting down in June. Based in Nevada, the company was unable to find a buyer to acquire the firm. 

Titan Admin informed staff that the company was shutting down after “negotiation talks fell through” with potential investors. Titan Solar is one of 16 major solar closures over the last year, but the solar industry has more problems than bad business. 

Titan Solar Faced Numerous Complaints From Customers

The company operated in 24 states but came under scrutiny from the Nevada State Contractors Board due to customer complaints.

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A house with large windows on the ground floor. The top of the ground floor is covered in solar panels and the main floor also has many solar panels covering it.

Source: Markus Winkler/Unsplash

In May, the firm had its probationary period extended so that regulators could investigate around 100 complaints. One customer told KTNV Las Vegas that her bills had not fallen after buying $58,000 worth of solar, having paid $400 a month to Titan Solar. This closure has left residents with potentially unwanted solar panels.

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Titan Is One of Many Solar Companies to Go Bust Over the Last Year

Sixteen major solar firms have filed for bankruptcy in 2023 and 2024, according to Solar Insure. 

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A man’s hand in a bright green worker’s glove is using an orange electronic screwdriver to finish a solar panel installment. Most of the image is black solar panels with the worker’s shadow reflected on the panels.

Source: Marcus Spiske/Unsplash

Other companies, such as Pink Energy and Vision Solar, have shut down following regulatory action and consumer complaints. Nationwide residential solar providers like SunPower have expressed “significant doubt” about its prospects, and SunRun has seen an 87% fall in its share price from its peak in 2020. Sunnova’s share price has fallen by 88%.

The Solar Industry’s Business Model Is Flawed

There are several factors behind the solar industry’s struggle to stay afloat. Higher interest rates on loans, lower likelihood to offset energy bills in some states and high installation costs make solar a high-risk investment for residents.

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Four men in yellow construction hats and hi-vis jackets are carrying a solar panel to a frame on a tiled roof. There is another man in a white construction hat leading the men to the roof. Two others are standing on the top of the roof.

Source: Justin Lim/Unsplash

The most glaring problem is the use of the “dealer model,” in which outsourced (and often unsupervised) salespeople make promises that solar firms cannot keep in order to keep sales coming. 

Pressure for Quick Growth in Solar Leads to Aggressive Sales Tactics

To make good on borrowed Wall Street money, solar companies have had to pivot to hard sells to keep sales coming. 

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A man in a hi-vis jacket and blue and gray gloves is using a screwdriver to install a black solar panel.

Source: Jose Malagon Arenas/Pixabay

Consumer lawyers have accused solar salespeople of using dirty tactics for a quick sell. Inflating consumer income on loan applications so that unqualified customers could sign up for solar and sending documents to fake email addresses so customers could not protest are just two examples.

The Dealer Model Promotes Growth ‘At Any Cost’

Titan Solar would set a minimum price at which the “dealer” would sell solar installations, and any higher would mean a salesperson gets a commission.

A series of orange and green houses against a cloudy sky have black solar panels across all of the roofs. The houses are behind a green lawn and low-level hedge.

Source: Insung Yoon/Unsplash

Walid Halty, founder of solar company Monalee, said the aim of the model is “grow, grow, grow, at any cost.” Chasing commission, contractors used hard sell tactics and made false promises to customers that Titan Solar would not be able to keep.

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The Rooftop Solar Industry Has Gotten Increasingly Involved in the Finance Sector

By the early 2000s, 70% of solar installations were not sold to customers but leased. This model shift meant firms like SolarCity could claim a 30% tax credit, which could be sold to large corporations like Google.

Against a blue sky with white clouds, a man dressed in a yellow construction hat and blue overalls is using a mop to clean the solar panels he is standing on.

Source: Maddy Bris/Pixabay

SolarCity would also sell lease packages to investors. This led to the sale of solar asset-backed securities reaching $1 billion by 2017. This is the main reason why sales tactics became more aggressive.

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Solar Firms May Flounder Following State Policy Changes

The California government has changed its legislation, reducing the amount of money residents can earn from installing solar panels. 

Two men wearing gray trousers and dark blue shirts are installing a solar panel on a diagonal roof against a blue sky with white clouds.

Source: Maria Godfrida/Pixabay

California moved from net-metering the electricity generated by solar customers to net-billing, which reduces the value of credits per kilowatt a person might make from installing solar panels. Illinois, Indiana, Kentucky and Michigan have followed suit. This has made solar panel installations a much less attractive option for homeowners.  

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The Government May Incentivize Local Solar Projects

While some states have changed the way customers are compensated for sending power back to the grid, the federal government has plans to make solar more appealing.

Two men dressed in orange hi-vis jackets and yellow construction hats are handling a gray pipe that runs through a large yellow rod. In the background are solar panels again some trees and a blue sky.

Source: Los Muertos Crew/Pexels

The Federal Emergency Management Agency (FEMA) is offering to pay local governments to install solar panels and heat pumps to recover from climate-related emergencies or disasters. This program will be the first time that FEMA has funded net-zero projects. 

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Solar Must Still Play a Leading Role in Meeting U.S. Renewable Energy Targets

According to the World Resources Institute, annual installation rates of renewables over the next few years need to double 2023’s rates in order to achieve 100% carbon-free electricity by 2035.

On the left, there are the silhouettes of wind turbines against a sunset. On the right are the grids of black solar panels.

Source: Seagul/Pixabay

Despite the predicted 12% fall in growth this year, solar energy was the fastest-growing power source in the U.S. in 2023 — a 55% increase from 2022. Solar energy currently generates enough electricity to provide for 5% of the nation.

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The Future of American Renewable Energy Still Looks Positive

Just as the business model for residential solar power transformed in the early 2000s, regulatory action and consumer complaints might force solar companies to rethink their sales tactics.

A technician in a yellow hi-vis and a white construction hat is walking along some rooftop solar panels against a cloudy sky. Behind him are vents and lights in the background.

Source: This_is_Engineering/Pixabay

Renewable energy is still a priority for the government, and while the solar industry is struggling this year, companies are predicted to experience higher growth and greater capacity over the coming years.

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