Sun Goes Down on SunPower as Rooftop Company Declares Bankruptcy
A “darling” of the solar industry succumbs to market forces and technological realities.
Biden’s ironically named Inflation Reduction Act (IRA) was supposed to create millions of green jobs and launch the “sustainable power” industry.
Subsidies flowed to support electric vehicles, wind farms, and solar energy. We have been covering the slowdown in the EV market, and residents of the East Coast are questioning all the promises made by the wind energy companies after the Vineyard Wind blade failure.
Now, it’s time to turn our attention to solar power. SunPower, the company that provides solar panels to many Californian homes in the sunny Coachella Valley area, filed for bankruptcy this week.
It is the latest development in a saga that has seen the company facing numerous serious and seemingly escalating challenges over the past several months, including allegations about executives’ misconduct related to the company’s financial statements and a recent decision that SunPower would no longer offer new solar leases.
Days after the latter announcement, Coachella Valley-based Renova Energy, which markets and installs SunPower systems, said it was ending its partnership with SunPower and temporarily pausing operations after not receiving required payments from SunPower.
SunPower’s executive chairman wrote in a letter posted on the company’s website on Monday that the company had reached an agreement to sell certain divisions of its business and suggested it was looking for one or more buyers to take on the rest, including the company’s responsibilities to maintain solar systems it has previously sold or leased.
It is important to note that SunPower was the industry’s “darling” to understand the magnitude of this development.
Founded in 1985 by a Stanford professor, SunPower was, for the past two decades, a darling of the solar industry. The company helped build America’s biggest solar plant, called Solar Star and located near Rosamond, California, and has installed solar panels on more than 100,000 homes.
The company’s stock price has fluctuated dramatically, peaking during the solar stock frenzy of late 2007. As recently as January 2021, SunPower’s valuation momentarily reached $10 billion, buoyed by the expansion of its residential solar panels program.
But since then, the company’s value has cratered — and this year, its situation became particularly dire.
It is also important to note that earlier this month, the bankruptcy of a solar-powered company in South Florida created an array of problems on the South Coast of California. Subcontractors are scrambling to find ways to guarantee payment for work on homes with equipment from the firm.
Meanwhile, homeowners are regretting their misplaced trust in eco-activists and city officials.
The business — Electriq Power Inc. — was putting solar panels and batteries on Santa Barbara rooftops at no expense to homeowners and with the blessings of the cities of Santa Barbara, Goleta, and Carpinteria. But then Electriq filed Chapter 7 on May 3, freezing all its operations.
This prompted one of its subcontractors, Axiom 360 of Grover Beach, to place mechanics liens on homes for which it had yet to be paid. This preserves Axiom’s options for full payment of its installation work and is not unusual among contractors. But for homeowners who didn’t expect any financial outlay, it came as a shock, especially as the recording notice lists foreclosure in 90 days among the penalties.
“You’re helping the environment. You’re not paying high rates to Southern California Edison,” said homeowner Randy Freed, explaining why he signed on to Electriq’s PoweredUp Goleta program. He was pleased with the savings in the solar array and storage batteries, but then he received the mechanics lien in June. The possibility of foreclosure was unanticipated, Freed said, and he’d relied on the cities’ endorsements. “It’s a great program; we’ve checked them out,” he recalled the cities saying on a postcard he received.
HotAir’s Beege Welborne takes an in-depth look at the cascade of warnings that indicate SunPower and the residential solar market are in serious trouble. She also hits on a point that is true for all green energy schemes: Today’s technology cannot keep up with the promises being made about tomorrow.
The technology side still hasn’t ironed itself out and may never with as saturated as the market is. With interest rates as high as they are and home prices through the roof, no one wants to pay a fortune for something that’s not rock solid.
…That “sustainable” growth is only possible once all the artificial supports are knocked away and the technology proves viable and worth the cost once and for all.
Of course, the solar industry isn’t helped by the fact that the cost savings for customers aren’t quite as lavish as originally promised.
Solar panels are a total ripoff:
– If you use electricity all day, it takes 20 years to break even with installation cost.
– If you work outside the home, it takes 27 years to break even.
And the weather remains the same.#MilloysLaw: Green = Fraud https://t.co/1o5LQgjgTu pic.twitter.com/PXMCHynUd1
— Steve Milloy (@JunkScience) June 19, 2022
DONATE
Donations tax deductible
to the full extent allowed by law.
Comments
SunPower was grossly mismanaged over the past 2 or 3 years. That, more than market forces, led to the demise. Others panel suppliers have survived the changes in the market without near the loss of cash that SunPower experienced.
Their government subsidies must have ran out.
My point is the change in incentives – mostly all in CA and not nationwide – affects every one of SunPower’s competitors. Only SunPower was already out of cash a year ago and unable to cope. The others are thriving. Including the company that was the primary supplier of solar panels to SunPower (SunPower never manufactured anything).
SunPower ran out of people willing to pay for electric panels much like the slow down in EV sales. They turned to subsidies from Biden and ran themselves into the ground trying to over expand in the face of competition. “Green Energy” only makes sense to some people who actively want it and don’t care the cost.
That’s not true. SunPower did rely too heavily on the CA market, which has declined. But net across the U.S. and across the globe, the “slow down” in solar hasn’t happened. In the U.S., solar continues to be much stronger than EV sales, year or year. SunPower failed because they never really were a manufacturer and relied entirely on their sales models. And for the past 3 or 4 years, they have mismanaged those models to the point where they had no cash left to keep experimenting with their sales approach. Every competitor, from brands that manufacture to other companies that don’t and are simply selling the service, has survived to date. Adjusted to market conditions, with sufficient operating cash, and survived. Just like automakers have survived their ill-advised overzealous push into EV because of cash buffers.
“It’s a great program; we’ve checked them out,” he recalled the cities saying on a postcard he received.”
Otter: “You fucked up. You trusted us.”
The bigger question is who will now be responsible for warranty work, maintenance and repairs…… that will also be the unsuspecting home owner!
The homeowner is a nobody.
Therefore, Mr. 10% will have the homeowner’s TS card punched.
If home owners now own the solar system, then they are getting a good deal as long as they don’t end up with a mechanic’s lien. Service costs should not be a burden.
Personally, I do not like roof mounted systems, though I can understand why people with postage stamp lots would need to go that route.
I went with rooftop mounting because I have a metal roof (because they last longer in high UV areas), the house was build specifically for solar and they’re safer on the roof than on the ground with all the property crime in my county.
You took out a 20 year loan on your solar cells. When the inverter goes out after 7 years, you won’t be able to use or sell your power. But the Bank will still want their monthly payments.
I am curious if new solar panels will be required when the roof needs to be replaced.
Also, I suspect insurance companies will change their policies (if not already changed) so the homeowner is personally responsible for any solar panel related risk.
New roof requires uninstalling & reinstalling the panels and racking. I did my own 6kW rooftop PV system over 6 years ago, so I had no labor costs other than my time. I bought a used EV that became our primary vehicle and eliminated most of our gas costs (baby on the way so needed to get rid of the wife’s roadster anyway). Took the tax deduction on the panels & a new roof I needed anyway allowing me to keep more of my own money that year, so the system paid for itself in less than 2 yrs, and has continued to provide 30-50% ROI annually. Now not everyone lives in abundant sunshine & is dumb enough to attempt their own system, but for us it has been a great investment.
The inverter will have a warranty (20yr by law I think), but the homeowner will need to find someone to swap it out, same for any installer that goes belly up.
I went with a local company that’s been one of the pioneers of solar power in my state. They don’t advertise solar (they get plenty of business through word of mouth) and they’ve branched out to plumbing as well. With the shortage of plumbers and electricians in my county, I’m not worried about them going belly up.
Getting stuck with a solar system that does not work and an installer that has gone out of business is so common that there is a name for it: Solar Burn.
I have a 20w solar panel in the side yard whose function is to keep a 12v battery in the basement charged. I’ve never gotten more than 8w out of it even with MPPT tracking.
If I lived out in the country I might have a small solar panel to charge the batteries on the well.
We have a small 100w portable panel that we use on our cabin far from power. It easily charges phones, tablets etc and even has cables to jump a vehicle if it’s battery dies. Never tried that, though and I suspect it might take an entire day or more but that is what the small generator is for. For what we use one for it is great.
Wind and solar only works on small scales or with massive government subsidies.
Wind yes, solar electric no.
No to wind no no no
I was replying the the comment, yes agreeing that wind was undesirable, no that solar electric is not bad. I build my own system, cutting out most labor, and I bought 5 year old panels removed from a utility when they upgrades for about 25 cent a watt. That made it economical, with break even being about 3 years. I do not think a 20 year break even is worthwhile.
If SHTF I might have trouble holding onto those panels, but if that is not an issue, I will be a lot better off than most people.
Neither are cost effective when all costs are built in.
Solar water heating is a tried-and-true technology, Love it, don’t want to live without it.
Photovoltaic? Not ready for prime time, regardless of who’s paying.
That depends on you skills, though just about anyone should be able to do a hot water system.
Even if you pay someone to install it, it will work happily for decades with near zero maintenance, and you won’t have to deal with sketchy subsidized contractors or Indian-giver power companies.
What ever happened to “Demonstration Projects” and “Pilot Studies”?
You know — before huge $$$ gets put at risk.
Ridiculous concept, I know.
at least the homeowners weren’t leasing ammonia tanks a la billy sol
wasn’t gov’t subsidized solar panel mfg / installation one of barky’s pet schemes ?
they already blame trump
the msm with alll these green scammers are stating
b/c if trump wins these companies wont get funding
so why are they closing shop now??
b/c they are stealing allll that they can while they can===tax money
My Solar power system was expensive and even with tax rebates, it won’t pay for itself any time soon but it doesn’t have to. Bringing the REC’s power line to my house would have cost more with no rebates.