ADT closes solar power generation division. What happens to that customer?

After hearing the recent news that ADT is closing its solar division, you may have one big question in mind. “What happens to me if the solar company shuts down?” What happens to that guarantee?

Further information will be provided specifically for ADT customers. When contacted by CNET, a representative pointed to the home security company's press release and said it would announce more details at the end of February.

However, the solar power business is changing rapidly and companies are disappearing one by one.

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A solar company going bankrupt may seem like a nightmare scenario, and it certainly is. But even if the installer goes out of business, there are strategies to keep your solar array in top condition. In fact, there are many things you can do in advance to prevent the worst outcomes, including choosing a reliable installation company.

Details are unclear for ADT Solar customers at this time, but here's what we know after speaking with experts.

Why do solar power companies go bankrupt?

The solar power industry has exploded in recent years, breaking residential installation records and adoption rates. Markets with high profits often become saturated quickly and businesses fail.

“It's a pretty crowded market,” said Gilbert Michaud, an assistant professor in the Department of Environment and Sustainability at Loyola University Chicago. “As a result, more companies are playing in the sandbox.”

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For example, ADT, best known for home security, jumped on the solar bandwagon with the acquisition of Sunpro Solar in 2021, expanding its solar footprint to 22 states. Now, just a few years later, the company is falling off the bandwagon, citing lackluster financial numbers.

Michaud said there are a variety of reasons why solar installers go out of business. Here are some common factors:

  • Some companies are just trying to take advantage of government subsidies, do poor quality work, and end up under fire. These are the proverbial “bad apples.”
  • In some cases, companies simply merge or are acquired by a larger company.
  • Some installers enter the industry for the right reasons, but lack experience and cannot survive.
  • Other installers are not specialized and may perform other types of work, such as roofing or electrical. These contractors may eventually cease their solar business or go out of business altogether.
  • A combination of poor customer service and low-quality equipment can quickly put a solar company out of business with a bad reputation.
  • Bankruptcy or litigation (which can result from any of the factors listed above) can also lead to the demise of a solar company.

Two workers install solar panels on the roof of a house. Two workers install solar panels on the roof of a house.

Experts say it's important to choose a good solar installer from the beginning.

Sandy Huffaker/Bloomberg/Getty Images

What happens to solar leases and loans if the solar company goes bankrupt?

If you signed a solar lease or loan through a defunct solar company, that lease or loan should, at least in theory, be transferred to the new company.

It depends on the original contract, so Michaud recommends digging it out and reading the fine print. You may also receive notification that the installer has ceased operations and your solar panels have a new lease holder.

If your solar loan is financed through a bank independent of the installer, you don't need to change anything. Just keep making payments to your lender.

What happens to the warranty if the solar company goes bankrupt?

If the solar panel warranty is carried out by the actual solar panel manufacturer (usually a separate company from the installer), the warranty should not be affected at all, Michaud said.

That being said, you may want to contact your panel company and ask them a few questions. Michaud advises finding the device's phone number and calling the manufacturer. “We can leverage this equipment to figure out what to do next,” he said.

For example, if your solar installer is SunPower, your solar panel equipment will likely be made by the manufacturer Maxeon (CNET's Best Solar Panels).

If the warranty is for a solar installer that is no longer in business, the warranty may be transferable. Technically speaking, companies are obligated to honor their warranties, so unless they're really shady actors, there should be some mechanism in place to do so.

How can I protect myself if my solar company goes bankrupt?

The best way to protect yourself in this situation is to prepare before it happens. While Michaud emphasizes the importance of finding a solid company first, there are other steps you can take.

  • Purchase an extended warranty through your solar panel manufacturer in case your installer goes out of business.
  • Keep the document in a safe place so you can easily access it if you need to reread the contract or find the phone number.
  • If your panels need maintenance and you or your installer can't do it, consider a solar power management or management company that specializes in maintenance. But the same advice applies here. Do your due diligence before hiring someone.
  • If you feel you have been scammed, consider seeking legal help.
  • If you believe you've been taken advantage of, the Department of Energy says on its website that you can report suspected fraud, fraud and overall “bad business practices” to the Federal Trade Commission.
  • Laws vary at the state level. This tool from allows you to search for local consumer protection offices in your state.

What are “night flying” solar companies and how will they impact the industry?

“Night-flying” solar power companies are the type of companies mentioned above. It's about leveraging customers and tax credits to generate large amounts of revenue while doing minimal quality work, hoping no one notices.

Michaud said these will have a dramatic impact on the solar industry as a whole. “Word of mouth and reputation are important,” he says. “If even one person has a bad experience, they go tell their neighbors and friends.” This has snowballed the feeling that solar power as a whole is some kind of scam, and the adoption rate has increased. may decrease.

As with anything, people who have had good experiences are usually not as picky as people who have had bad experiences. Therefore, night shift companies create a distorted reputation for the entire industry.

Why it’s important to choose a reliable solar power company

You can save yourself a lot of trouble by working with a reputable company in the first place. Here is a detailed guide to finding the right installer.

Michaud said homeowners should look at reviews, ask neighbors and make sure the company they choose is insured and certified, has been in business for at least five years and uses high-quality materials. We advise you to check that. If an offer sounds too good to be true, it probably is. “Sometimes you get what you pay for,” he said.

Check with the North American Board of Certified Energy Professionals before contracting with an installer.

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