The U.S. residential photovoltaic business has dropped by 20%, several listed companies have declared bankruptcy?

Due to rising interest rates and cash flow issues, residential solar installers in the United States are facing huge difficulties, and one of their most influential solar companies has declared bankruptcy.

Source: pv magazine

The company has always been a leading manufacturer of solar cells and modules, providing rooftop solar energy, energy storage, and electric vehicle charging for homeowners, and actively participating in large-scale project areas.

However, with the intensification of inflation after the pandemic, federal lending rates have increased and loan terms have also increased, making it more expensive for homeowners to invest in solar energy. By the end of 2023, the installation of rooftop photovoltaics has dropped by 80%, and the company's business has also suffered a strong impact.

In October 2023, due to an inventory report error by one of its subsidiaries, it is necessary to restate the financial performance of the third quarter, which will pose a risk of lenders demanding immediate repayment. If it can’t obtain exemption, the company will face a series of cash flow challenges, resulting in restrictions on its distributors. Fortunately, the company successfully obtained an exemption from technical default and received $75 million in funding to support its financial situation.

Source: pv magazine
 

However, the recovery of the market is still not optimistic, and the residential photovoltaic business continues to decline. Several listed installers have filed for bankruptcy, and the company is no exception. By July 2024, the company's stock price had fallen by 70%, making it difficult for its business to survive and unable to provide installation services for goods that were in transit or had already been delivered.

On August 6, 2024, due to a sharp decline in demand in the solar energy market and the company's inability to obtain new capital, a severe cash flow crisis forced the company to officially declare bankruptcy.

Source: pv magazine

But the company's predicament is clearly its own problem and should not be elevated to an overall evaluation of the potential demand for residential solar energy in the United States. However, the residential solar market in the United States has indeed declined by about 20% across the industry. The Ohm Analytics report predicts that the industry will experience moderate growth of 5% to 10% by 2025 and 2026, which indicates that household solar energy in the United States may have hit bottom.

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