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Solar Bankruptcies Show US Clean Energy Industry Is on the Edge of a Financial Cliff
June 9, 2025
The U.S. clean energy sector, once hailed as the future of sustainable growth, is teetering on the brink of a financial precipice. A wave of high-profile bankruptcies among solar companies in 2024 and 2025 has exposed deep vulnerabilities in the industry, driven by soaring interest rates, policy shifts, and over-leveraged business models. As the residential solar market grapples with these challenges, investors are left questioning the sector’s stability and seeking safer paths forward. This article examines the recent spate of solar bankruptcies, their root causes, and what investors should prioritize to navigate this turbulent landscape.
A Surge in Solar Bankruptcies
The past two years have been brutal for the U.S. solar industry, with over 100 companies filing for bankruptcy or ceasing operations, an unprecedented figure in nearly two decades of solar market growth. Major players like Sunnova Energy International Inc., SunPower Corp., Solar Mosaic LLC, and Lumio Holdings, Inc. have either filed for Chapter 11 bankruptcy or shut down entirely, leaving homeowners, employees, and investors in disarray.
Sunnova Energy, one of the largest residential solar providers, filed for Chapter 11 in June 2025, citing assets and liabilities between $10 billion and $50 billion. The company, burdened by a massive debt load and weakened demand, plans to lay off 55% of its workforce (approximately 718 employees).
SunPower, a solar industry pioneer since 1985, filed for Chapter 11 in August 2024, grappling with a $2.01 billion debt and a “severe liquidity crisis” triggered by reduced demand and accounting irregularities. Its assets, including Blue Raven Solar and parts of its dealer network, are being sold to Complete Solaria for $45 million, though higher bids are possible.
Solar Mosaic, a leading lender in the rooftop solar market, filed for Chapter 11 in early June 2025, halting new loans after failing to secure financing amid policy uncertainties, including President Trump’s tax bill, which threatens to end generous solar tax incentives.
Lumio Holdings and iSun, Inc. also sought bankruptcy protection in 2024, citing high interest rates and reduced consumer demand due to financing challenges. Smaller firms like Titan Solar Power, Sunworks, Pink Energy, and Kayo Energy have either closed abruptly or filed for bankruptcy, leaving customers with incomplete installations and voided warranties.
These failures are not isolated. The California Solar & Storage Association (CALSSA) reports that California, the nation’s largest solar market, lost 17,000 solar jobs in 2023 alone, with 75% of the state’s rooftop solar companies at “high risk” of bankruptcy due to policy changes like Net Energy Metering (NEM) 3.0. This policy slashed energy export compensation by 70-80%, extending payback periods for solar investments and deterring consumers...
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