{"id":104762,"date":"2024-01-08T08:01:13","date_gmt":"2024-01-08T13:01:13","guid":{"rendered":"https:\/\/\/?p=104762"},"modified":"2024-01-05T08:49:22","modified_gmt":"2024-01-05T13:49:22","slug":"bankruptcies-and-closures-rock-residential-solar-installation","status":"publish","type":"post","link":"https:\/\/\/2024\/01\/bankruptcies-and-closures-rock-residential-solar-installation\/","title":{"rendered":"Bankruptcies and closures rock residential solar in last year
2024 Trends in Solar<\/span>"},"content":{"rendered":"

In an era of unprecedented federal support for U.S. solar installation, the residential PV market has encountered economic hardships and policy roadblocks resulting in a rash of closures among contractors. Commercial solar warranter SolarInsure reported that there were more than 100 bankruptcies and closures<\/a> in 2023 alone, including several large installers that were operating nationally or in multiple states.<\/p>\n

While large-scale solar is carrying the country<\/a> to another record-breaking year for overall installation, the residential market is struggling to stay afloat. Smaller contractors are navigating higher interest rates for project financing, soft costs for projects are mounting and a utility policy shift in California, the country\u2019s leading solar state, is devastating its once thriving residential market.<\/p>\n

\"\"<\/a>

Fresno-based solar installer Energy Concepts<\/p><\/div>\n

The California Solar & Storage Association (CALSSA) reported that California has lost 17,000 solar jobs<\/a> since April 2023, when the California Public Utilities Commission (CPUC) implemented updates to its net-metering policy. Policymakers said NEM 3.0 was devised to encourage more energy storage adoption on solar projects to provide more resilience to California\u2019s electrical grid. Instead, it has reworked its net-metering system based on an hour-by-hour time-of-use rate that has cut energy export compensation by 70 to 80%.<\/p>\n

The state was expected to lose 22% of its solar workforce by the end of 2023 because of it.<\/p>\n

\u201cI don\u2019t even recognize my home state,\u201d said Bernadette del Chiaro, executive director of CALSSA. \u201cThis is not California. This is not who we are. This is not how we have traditionally done things for 20 years. We have been, really, the prime example of how to do policy well, how to make long-term investments that provide certainty for industry and consumers alike.\u201d<\/p>\n

Industry analyst Wood Mackenzie predicted<\/a> in January 2022 that the NEM 3.0 updates could cut California\u2019s residential solar market in half by 2024. CALSSA advocated against the net-metering shift, predicting a similar outcome for the California market. Now, its residential installers are considering their options as this new net-metering regime reduces the number of homeowners able to afford a solar project.<\/p>\n

\u201cThere\u2019s always cycles, there\u2019s always hurdles and curves down the road, but nothing like this. Nothing. This is a brick wall that got put in front of us,\u201d said Carlos Beccar, marketing director of Energy Concepts, a residential solar installer in Fresno.<\/p>\n

Energy Concepts has installed solar technologies since its founding in 1992, starting with thermal solar water heaters and transitioning to PV 15 years ago. In 2023, the company laid off 50% of its employees, citing NEM 3.0 as the primary cause. Energy Concepts\u2019 installation numbers have reduced to about 25% of where it was in 2022, and that includes some of the projects the company sold as customers rushed to be included in NEM 2.0.<\/p>\n

\u201c2024 is starting to look very grim in terms of projections \u2026 We think that the industry is going to probably pick back up a little bit. But it\u2019s hard to say,\u201d Beccar said. \u201cI don\u2019t think the rebound is going to bring us anywhere near where we were last year or this year [2023], even.\u201d<\/p>\n

CALSSA surveyed its residential installer members and found that the companies staying in business have diversified and leaned on other internal services like roofing, mostly ceasing solar installation. Other contractors are leaving California entirely for states with friendlier solar policy. Energy Concepts is now bidding on projects left behind by contractors that have fled the state.<\/p>\n

These company closures will also result in orphaned solar systems<\/a> for customers. Fulfilling warranties and performing maintenance on abandoned solar arrays is an existing and complicated issue within the industry that could increase as more contractors close their doors.<\/p>\n

\u201cWe\u2019ve seen this happen before, but never at the scale that we\u2019re about to see,\u201d del Chiaro said. \u201cIt\u2019s a huge problem. Hopefully their systems are interconnected and energized and nothing goes wrong, and if something does go wrong, the manufacturer steps in and honors the warranty. But there are going to be a lot of customers that are left hanging because their project never got built, or they\u2019re going to struggle if something goes wrong.\u201d<\/p>\n

Since California was a trailblazing state for solar installation, it has been a testbed for renewable energy policies, and del Chiaro said legislators in other states are already citing NEM 3.0 as rationale for limiting net metering.<\/p>\n

\u201cFor them to use this excuse, this moment, to get rid of their net-metering policy is just ridiculous, but it\u2019s also unfortunately something that we also warned California lawmakers about \u2014 not that they should make California policy decisions with other states in mind, but that they need to be aware that their leadership works both ways,\u201d del Chiaro said.<\/p>\n

This past summer, the compensation rate for net metering in Indiana<\/a> dropped by 70%, phasing out from a policy passed in 2017, according to The Herald Bulletin<\/em>. Southeast utility Duke Energy is implementing a net-metering plan with similar language<\/a> to NEM 3.0 in North Carolina, compensating commercial customers for the \u201cvalue of electricity at that time,\u201d according to NPR station WFAE 90.7<\/em>.<\/p>\n

But the net-metering saga in California continues. The CPUC passed a policy<\/a> in November that will change how properties with multiple electric meters are compensated for energy exports. Solar built on schools, apartment buildings and other multi-metered properties will no longer directly offset utility bills. Instead that energy will be sold to utilities at lower rates, according to a CALSSA press release.<\/p>\n

\u201cIt\u2019s incredibly ironic as California policymakers travel the globe, touting California\u2019s climate leadership, that we\u2019re in such dark times in California \u2014 the hotbed of solar,\u201d del Chiaro said. \u201cWe\u2019re in these incredibly dark times and the damage is starting to spread across the country.\u201d<\/p>\n

\n

This story is part of SPW\u2019s 2024 Trends in Solar. Read all of this year\u2019s trends here<\/a>.\u00a0<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

In an era of unprecedented federal support for U.S. solar installation, the residential PV market has encountered economic hardships and policy roadblocks resulting in a rash of closures among contractors. Commercial solar warranter SolarInsure reported that there were more than 100 bankruptcies and closures in 2023 alone, including several large installers that were operating nationally…<\/p>\n","protected":false},"author":19854,"featured_media":104763,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"categories":[3004,5117,5118,4787],"tags":[],"class_list":{"2":"type-post","11":"entry","12":"has-post-thumbnail"},"acf":[],"yoast_head":"\nBankruptcies and closures rock residential solar in last year<\/title>\n<meta name=\"description\" content=\"In an era of unprecedented federal support for U.S. solar installation, the residential PV market has encountered economic hardships and 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