From Boom to Bust: The Definitive List of Failed Solar Companies

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Policy changes at the state level have compounded the effects of tightening solar financing, leading to a dramatic drop in demand—rooftop solar installations are down by as much as 80%. According to the California Solar & Storage Association, the ripple effects are staggering: tens of thousands of delayed installations, more than 17,000 jobs lost, and a surge in bankruptcies across the industry.

Although some established companies are managing to weather the storm, countless homeowners and solar workers are left in limbo. The sudden downfall of many previously booming solar businesses highlights the real-world risks that come with abrupt changes to incentive structures.

Top Solar Companies That Shut Down in 2023, 2024 & 2025

Major Solar Company Shutdowns:

Solar Company Shutdowns in California

Solar Company Shutdowns in Texas:

Solar Company Shutdowns in Other States:

Behind the Shutdown: Why So Many Solar Companies Failed

The solar industry has seen explosive growth over the last decade, but recent years have revealed deep vulnerabilities in the business models of many solar contractors. In 2023 and beyond, a combination of economic shifts, financing obstacles, and changing policy landscapes pushed a significant number of solar companies to the brink—and beyond. Here’s a breakdown of the primary forces behind this wave of closures.

1. The Ripple Effect of Rising Interest Rates

Cost of Borrowing Skyrockets

When the Federal Reserve raised interest rates to fight inflation, the move had unintended consequences for the solar sector. The higher cost of borrowing made financing solar systems less appealing for homeowners, especially those who once relied on low-cost loans to make the switch to solar. With fewer customers moving forward, contractors felt the squeeze.

A Shift in Consumer Behavior

As monthly loan payments climbed, homeowners began to second-guess whether solar was a wise investment. What was once marketed as a smart, cost-saving upgrade suddenly looked like a long-term financial burden. The result: slowing sales pipelines and stalled revenue for contractors dependent on a constant stream of new projects.

2. Cash Flow Crunch: A Growing Burden for Solar Contractors

Operating on Thin Margins

Most solar contractors operate with tight margins and rely heavily on borrowed capital to fund daily operations. With higher interest rates driving up the cost of working capital, many companies found themselves in a financial chokehold. Maintaining cash flow became a challenge—especially for smaller, local contractors without access to large credit lines.

Smaller Firms Hit the Hardest

While larger solar firms had the resources to absorb increased costs or restructure debt, small and mid-sized companies didn’t have that luxury. Many were forced to scale back operations, lay off staff, or shut down entirely due to unsustainable financial pressure.

3. Delayed Payouts: Financing Model Disruption

Solar Lending Practices Shift

Traditionally, contractors received project payments in stages—often getting a large portion of the funds during or immediately after installation (commonly referred to as M1 and M2). However, many solar lenders revised their milestone payment terms in 2023, requiring contractors to wait until final utility approval (Permission to Operate or “PTO”) before receiving full payment.

Strain on Liquidity

This change left contractors in a precarious position—fronting the costs of materials, labor, and permitting without timely reimbursement. The result was mounting debt and growing delays in project completion, further impacting customer confidence and company stability.

4. Policy Shifts That Changed the Game

California’s NEM 3.0 Fallout

One of the most damaging policy developments was California’s shift to NEM 3.0. This updated net metering policy dramatically reduced the compensation homeowners receive for sending excess power back to the grid. As a result, the return on investment for solar in California dropped significantly, discouraging new installations.

Broader Regulatory Whiplash

Similar policy setbacks occurred in other states, creating uncertainty and stalling consumer interest. Sudden regulatory changes disrupted business models overnight, leaving contractors scrambling to adjust their projections and sales strategies.

5. Fallout: What Solar Bankruptcies Mean for Homeowners

Abandoned Mid-Project

Thousands of homeowners found themselves mid-installation when their solar contractor closed up shop. These customers faced serious challenges, including incomplete systems, permitting issues, and limited recourse for money already spent.

Warranty Confusion

Even completed installations weren’t immune. Homeowners were often left wondering who would honor their warranties or perform maintenance if their original installer went out of business.

Rising Concerns About Trust and Support

As news spread of more solar company closures, consumer trust took a hit. Prospective customers hesitated, unsure if the company they were considering would be around long enough to support them in the future.

6. What Homeowners Can Do Now

Check Your System’s Manufacturer Coverage

Even if your installer is no longer in business, your solar panel manufacturer may still honor product warranties. Contact them directly to learn what support is available.

Seek Out Reliable Local Providers

There are still many stable, reputable solar companies operating. If you’ve been left stranded, reach out to local providers who specialize in servicing orphaned systems. Some may offer takeover packages or discounted service plans.

Consider a Protection Plan

Services like extended warranties and third-party monitoring can provide peace of mind. These programs ensure that your solar system stays operational, even if your original installer can’t support it.

7. How Complete Solar Solutions Can Help

At Complete Solar Solutions, we specialize in supporting homeowners who’ve been impacted by contractor closures. Our nationwide network of certified technicians can step in to service, troubleshoot, and maintain your system—no matter who installed it.

We also offer advanced monitoring tools that give you real-time visibility into your system’s performance. If something isn’t working right, our team is notified immediately, and we coordinate next steps to resolve it. You’re never left guessing or stuck navigating a warranty claim alone.

8. Looking Ahead: A More Stable Future

Industry Adjustments

As the dust settles, the solar industry is learning from recent hardships. Lenders are refining risk assessments, installers are improving transparency, and manufacturers are stepping up support to prevent more homeowners from being left behind.

A Resilient Industry

Despite these setbacks, the long-term promise of solar remains strong. Advances in battery storage, smart inverters, and government incentives continue to make solar a viable investment. With the right safeguards in place, the next chapter of solar growth will be more stable, customer-focused, and reliable.

The collapse of numerous solar contractors from 2023 to 2025 is a wake-up call for the industry—but not a death sentence. For homeowners, the key is to stay informed, work with reputable partners, and take advantage of services like Complete Solar Solutions. Together, we can navigate the challenges and build a more dependable solar future.