July 21, 2024

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Another Solar Company Goes Bust

Another Solar Company Goes Bust

One of the largest residential solar installers in the nation has abruptly shut its doors and filed for bankruptcy in the latest blow to a troubled industry. 

Titan Solar, which installed thousands of systems across the U.S., informed its employees June 13 that it was “closing its doors,” having failed to secure a buyer for the company, according to an email obtained by TIME. In the email, Titan said that it had helped over 100,000 households go solar. 

Titan is not the only solar installer to close up shop lately. The company, which could not be reached for comment for this story—its website has shut down—is one of 16 major solar outfits that have filed for bankruptcy in 2023 and 2024, according to Solar Insure, which offers warranties and monitoring for homeowners who have solar. They include Pink Energy and Vision Solar, which like other operators in the industry faced regulatory action and numerous consumer complaints. Customers are left with solar panels on their homes that they may or may not want. Some are working with lenders to find another company to take over the maintenance of their panels; others are just trying to get out of the loans.

The broader industry faces significant upheaval. In December, SunPower said there was “substantial doubt” about its ability to continue to operate. Sunlight Financial, which provided financing for residential solar, filed for bankruptcy last October. SunRun, one of the biggest residential installers in the country, has seen its share price plummet 87% from its 2020 peak; the share price of Sunnova, another national installer, has fallen 88%. 

Read More: The Rooftop Solar Industry Could Be on the Verge of Collapse.

There are a number of reasons the solar industry is struggling, including higher interest rates, less opportunity to offset your energy bill in some states, and overall high costs of installation. But the failure of Titan points to a big flaw in one model of solar in the U.S. that has been plagued by consumer complaints and regulatory action. 

Titan operated on a so-called “dealer model,” meaning that it didn’t complete any sales itself but instead outsourced them to “dealers” who dispatched crews of salespeople. The salespeople operated with little oversight and sometimes made promises the company couldn’t keep, says Walid Halty, the founder of Monalee, an AI-based solar installation company that has done away with salespeople. “Their model was grow, grow, grow, at any cost—they didn’t care how they got the sales,” Halty says.

Under the dealer model, Titan would set a “red line”—essentially a minimum price, usually per watt, for which the dealer needed to sell the system. If a salesperson could sell the system for more than that price, they would get more commission. This incentivized them to make promises that the company couldn’t keep.

Read More: How Easy Lending Can Lead to Fraud.

For Titan, the dealer program turned out to be a “double-edged sword,” according to Ara Agopian, the founder and CEO of Solar Insure. “The dealers’ primary motivation was to maximize their commissions, which sometimes led to aggressive sales tactics and overselling of systems without adequate consideration for the customers’ specific needs,” he wrote, on a post on his website. 

The Nevada State Contractors Board had put Titan on probation in 2023 after receiving multiple customer complaints. The company faces multiple lawsuits. In one complaint, filed in Ohio on June 13, a consumer named Thomas Jones alleges that a Titan salesman told Jones that he would have no electricity bill if he installed solar panels because of a free government program. The salesman then allegedly forged Jones’ signature on loan documents, taking out a $69,000 loan from another company without Jones’ knowledge. The loan included a finance charge of $75,000, meaning payments would add up to $166,422.80, according to the complaint. The salesman allegedly avoided scrutiny by sending the contract to an email address that was similar to Jones’, but was not his. 

“They screwed over a lot of people,” says a former Titan customer service representative who described fielding lots of complaints from consumers. “They preyed on people who thought they were going to save money.”