As you can imagine, given my widely varied interests, I get a pretty weird assortment of daily newsletters every morning when I open my Gmail. Some of them come several times a day, and I can't keep up with the inflow, so I'd normally delete them after a quick glance if I have time for that much.

Today, though, we had a winner. As soon as you see the headline, you'll know why:

Friday Dive: The Residential Solar Collapse

Examining the Fall of a Solar Pioneer and the Forces Shaking the Residential Solar Market

I was like, "Wowsahs! How'd I miss that?"

The piece starts off talking about a specific company I was unfamiliar with, but apparently one of the major players in residential solar -  SunPower Corporation. Looking back, there have been signs of trouble for months in spite of a tremendous influx of taxpayer dollars to the industry a mere year ago. 

How's this going ? (June 13, 2023)

~~ Biden-Harris Administration Announces $13.5 Million Investment to Equitably Grow Solar Energy Workforce `~

“President Biden’s Investing in America . . . working to jump-start solar energy careers" .. 🤔https://t.co/csmqbnfGPm pic.twitter.com/r79UGlP0l3

— Don Penim (@Don_Penim) April 25, 2024

As inevitably as Green Grift seems to go, flush with money is always money flushed. SunPower missed a big credit payment in December of last year, and alarm bells went off.

SunPower Corporation, once a leading name in the U.S. residential solar market, recently filed for Chapter 11 bankruptcy. Known for its high-efficiency solar panels and comprehensive installation services, SunPower had established itself as a significant player in the renewable energy sector. The company focused on residential, commercial, and utility-scale solar solutions, and its strategic decisions, such as spinning off its manufacturing operations in 2019 to concentrate on residential installations, initially seemed promising. However, financial strain, high interest rates, and economic downturns have significantly impacted their operations, culminating in severe liquidity issues and eventual bankruptcy.

The "financial strain" owes more to the end of the gravy train than anything else. The subsidies that have sustained the industry - witness the largesse a year ago - and the power companies' deals encouraging installation have all begun to fall by the wayside. To no one's surprise, a renewable energy source and industry that, from the very beginning, was built on and subsidized by other people's money vice letting free markets test the viability of the technology and naturally sort out winners and losers?

Residential solar finds itself desperately kicking, begging, and bobbing to the surface to avoid sinking altogether.

Even the friendliest states, who were once home solar's biggest allies, are working against the industry. Much of it in the name of equity, too - that has to sting.

A year ago, the California Public Utilities Commission (CPUC) approved NEM 3.0, a rulemaking decision implemented in April 2023 that slashed compensation for exported rooftop solar generation by roughly 80%.

Now, several months after implementation, the effects of NEM 3.0 have become clear. Utility interconnection queues show an 80% drop in installation applications. The California Solar and Storage Association (CALSSA) reported that nearly 17,000 rooftop solar jobs, about 22% of the workforce, were lost this year as a result.

Solar Insure, which backs many installation companies in the state, told pv magazine USA that its data shows 75% of solar installers are now in the “high risk” category following CPUC’s decision to implement NEM 3.0.

“We have seen a wave of recent solar installer bankruptcies and believe another wave will come in Q1 2024,” said Ara Agopian, chief executive officer, Solar Insure.

Despite public protest and industry warnings of devastating effects, the CPUC ruled in favor of its private investor-owned utilities. These utilities pushed forward the assumptions of NEM 3.0 based on a call for equity and fairness, saying that renters were being left behind by rooftop solar. Not long after pushing the policy through, CPUC revealed the equity concerns were merely talk, and it moved through further rulemaking decisions that made it harder for renters reap the benefits of rooftop solar.

The solar industry itself hasn't exactly been its own best advocate, often being viewed as the used car salesmen of rooftop power. Companies exploded in concert with federal dollars and generous utility company terms for power generation payouts.

Taxpayers as "renewable energy":

- These 86 Florida homeowners don't pay for electricity because the rest of us are paying their bills.

- US taxpayers subsidized solar panels and batteries at a clip of $30,000 per home.https://t.co/Z3iQTqpCVE pic.twitter.com/JZ4ibMvLnq

— Steve Milloy (@JunkScience) January 7, 2024

Many times, the fellow banging on your door to convince you your roof wasn't complete without lots of holes, wires, and panels manufactured God-knows-where was the equivalent of the kid wearing a sandwich board on a sidewalk that said " COLD A/C CHEAP," which pointed to a rusted hulk with no transmission.

There's a bad taste in the mouths of many people who bought into the promises, and when folks feel ripped off, word of that nature gets around.

A decade ago, someone knocking on your door to sell you solar panels would have been selling you solar panels. Now, they are probably selling you a financial product—likely a lease or a loan. 

Mary Ann Jones, 83, didn’t realize this had happened to her until she received a call last year from GoodLeap, a financial technology company, saying she owed $52,564.28 for a solar panel loan that expires when she’s 106, and costs more than she originally paid for her house. 

In 2022, she says, a door-to-door salesman from the company Solgen Construction showed up at her house on the outskirts of Fresno, Calif., pushing what he claimed was a government program affiliated with her utility to get her free solar panels. At one point, he had her touch his tablet device, she says, but he never said she was signing a contract with Solgen or a loan document with GoodLeap. Unbeknownst to Jones, the salesman used "[email protected]" as her purported email address—that of course, was not her email address. She’s on a fixed income of $960 a month, and cannot afford the loan she says she was tricked into signing up for; she’s now fighting both Solgen and Goodleap in court.

There are a few truths to the sleazy used car = solar salesman equation.

...Residential solar has always faced a big impediment to growth: installing and maintaining solar panels is expensive, and few consumers wanted to spend tens of thousands of dollars in cash to pay upfront for what was a relatively untested product. To get around this problem, a company called SolarCity came up with a new model in the early 2010s—leasing solar panels to customers, allowing them to pay little to no upfront cost. Companies like SunRun quickly followed; by 2014, this “third-party owned” kind of leased solar accounted for around 70% of total residential installations.

Besides enabling sales, there were other, even bigger, financial benefits of this practice for SolarCity. Since the company, not the consumer, owned the solar panels, SolarCity could claim the hefty 30% tax credit for solar panels the government approved in 2005. It then took those tax credits and sold them to companies like Google or Goldman Sachs who, unlike SolarCity, were making a profit and so owed money on their taxes. Those sales helped fund SolarCity’s further growth.

...Meanwhile, the pressure for fast sales may have led some companies to look the other way when salespeople obscured the terms of the solar panel leases and loans they were selling in order to close a deal. Consumer lawyers have made allegations about salespeople fudging consumer incomes on loan applications so they could qualify; telling them they’d get a tax refund for solar panels even if their income wasn’t high enough; and sending important documents to fake email addresses so consumers wouldn’t see them and protest. 

Jesus Hernandez, 53, says a salesman from Southern Solar called him in 2019 with the pitch that installing solar panels could cut his monthly electric bill to as low as $50 a month; Hernandez was paying around $500 a month at the time. Hernandez, a housekeeping supervisor, couldn’t afford the up-front costs, but the salesman said GoodLeap would give him a loan. When the salesman later came to his house in Dallas to close the deal, he also promised that were Hernandez to get panels, the government would write him a solar-subsidy check for $16,000. Hernandez was sold; he agreed to take out a 20-year loan to install about $62,000 worth of solar panels.

After interests and fees, that $62,000 turned out to be more like $90,000. Today, Hernandez pays about $400 a month on the loan. Worse, his electric bill is still in the $500 range, because the panels do not produce the promised electricity. The company took out a lien on his house without his knowledge, he says, and it turns out that his 2019 income—around $50,000—meant that he wasn’t making enough money to qualify for the tax incentive upfront. He sued Southern Solar, and a jury awarded him $500,000 in November 2023 but he hasn’t seen a penny yet, he says. He tells anyone who asks that they shouldn’t buy solar panels, and if they do, that they should record the whole sales pitch in case the salesperson isn’t telling the truth. “Everything they told us was a lie,” he says. (In response to a request for comment, Southern Solar said it was filing an appeal and so would not answer questions at this time.)

I read stories like that every other day on NextDoor threads. As you might imagine, solar took off here about 5 years ago, and the hangover is really beginning to hit people.

Then there's what you were told you'd see as far as electric bills v payments and what actually happens once everything's humming. This chart below is a couple of years old, but I believe it's probably on the low side for what many folks are paying now comparatively. 

A lovely older gentleman down the street from me is very unhappy with the panels blanketing his rooftop. He had a soft, well-mannered way of answering me when I asked what he thought of his significant investment. "Well, Beege, " he said. "You know, I'm going to have to look at it again, and hard, because I'm not seeing any savings at all like they promised me I would. It's costing me more." 

And his installer is one of the larger, more reputable ones in town.

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

I can't imagine the poor people stuck with the fly-by-nighty operators and Chinese panels that are thin and fragile. 

Look what's happening with SunPower going under. Anyone who bought or leased from them is toast as far as warranties and maintenance...but you still owe all that money to your lender. The dealers for their line are now on the hook, too.

...Last month, SunPower sent a letter to dealers announcing it will no longer support new leases, PPA sales, and new project installations of those financing options. This had a ripple effect on SunPower’s massive dealer network, immediately impacting businesses like Renova, the largest solar company in the Coachella Valley.

There are other problems, of course. 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.

And come on - for all the time and bazillions invested, it should be.

...Technological and operational inefficiencies have been significant hurdles for the residential solar market. Variability in solar panel quality and performance has led to operational challenges, with inconsistencies in efficiency and durability causing issues for both installers and consumers. Despite advancements, integrating new technologies, such as battery storage systems, remains complex and costly, leading to longer installation times and higher expenses.

Maintenance and reliability concerns also persist. Homeowners often worry about the long-term upkeep and reliability of their solar systems, which can deter investment. This is especially true as many older installations near the end of their warranty periods, necessitating repairs or replacements and further straining resource.

Addressing these inefficiencies is crucial. Improving product quality and integration while streamlining operational processes can help the residential solar industry regain momentum and achieve sustainable growth.

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. 

And the companies that are left standing have gone through a trial by fire of free market competition.

Solar panels ‘chronically underperforming’,

Residential units deteriorating twice as fast as assumed.https://t.co/U9sWhWCa3Z pic.twitter.com/A1Je89Z64o

— Net Zero Watch (@NetZeroWatch) June 11, 2021

Otherwise, it's lights out.