When a homeowner decides to go solar, they will be living with their solar system for a long time. In many cases, if the solar system is financed, the length of the term of the loan is 25 years. Therefore, they’ll want to make sure the company that installed their solar system will be around to make repairs, provide maintenance, and stand behind the warranty. The largest solar companies are rapidly gaining market share making it difficult for smaller companies to survive.
Smaller Residential Solar Companies are Facing Challenges
There are many instances of homeowners being left to fend for themselves as their solar installation company has gone out of business. One company, Pink Energy out of North Carolina, filed for bankruptcy in 2022 blaming equipment manufacturer Generac for faulty equipment. Homeowners now have solar systems that don’t work and no company to fix the problem.
The solar industry is relatively young. Even though the first solar panel was invented in 1954, solar efficiency was relatively low. Even though efficiency ratings gradually increased, it wasn’t until 2000 when the solar inverter was introduced to convert DC energy from the sun into AC energy for the home that the residential market truly began to grow. More recently, in the last 10 years, design and implementation improvements have significantly lowered the cost of solar for consumers. Now the positioning for the residential solar market has begun.
Only the Strong Survive
Like most industries, a large number of companies vie for a share of the market. But only the most innovative and well-financed of those companies can survive. Most recently during the pandemic, many solar companies closed and filed for bankruptcy as they couldn’t make the shift from in-home sales to virtual sales in time. Another challenge was the U.S. government's decision to make the import of Chinese products more difficult. Many smaller companies were unable to procure solar panels and other solar equipment that they were buying from Chinese companies. Therefore, they were unable to complete installations and lost large sums of revenue.
It is evident that the largest solar companies are gaining market share while others remain stagnant, are losing market share, or are closing their doors entirely. The top 10 residential solar installation companies now have over 34% of the U.S. market as of 2021.
The Top Ten Residential Solar Companies (Wood MacKenzie 3/27/23)
Sunrun 12.5%
Tesla 4.2%
Freedom Forever 4.0%
Titan
SunPower
Momentum Solar
Trinity Solar Power
Bright Planet Solar
Palmetto
LGCY
Sunrun still dominates the U.S. residential solar market. Sunrun primarily uses its Power Purchase Agreement (PPA) which is somewhat like a lease when marketing to homeowners.
Freedom Forever is Experiencing Significant Growth
Freedom Forever, which is based in Temecula, CA, took over the #3 spot in 2021. They moved into 12 new markets and their installation volume grew by 80% and increased in 2022 by 43%.
Freedom Forever has also partnered with Sunrun to offer both purchase of a solar panel system and the Sunrun PPA.
Freedom Forever also introduced its own solar panel in 2022, the Freedom Forever Halo 400W panel. This solar panel is designed in the U.S. and is not manufactured in China giving Freedom Forever a decided advantage in procuring solar panels for its residential installations.
Freedom Forever also has a unique 25-year production guarantee which overlays the equipment warranty. Freedom Forever guarantees kWh production each year. They will reimburse the homeowner for any additional cost to their utility company should the system not produce the kWhs they guarantee.
And Freedom Forever has ranked in the INC 5000 list as one of the fastest-growing companies 5 years in a row.
Tesla Solar has run into problems in the last couple of years. Wood Mackenzie, an industry analyst, shared, "However, Tesla remains highly dependent on subcontractors for installations, so we expect the company will continue to shift away from its direct install business." They have also had trouble procuring solar panels from China.
Conclusion for Homeowners
What does all this research mean? It should direct homeowners to the largest solar companies when considering solar for their homes. All companies will have some negative reviews from consumers. However, they should mostly pay attention to legitimate news articles about the company they are considering that discuss supply chain issues and signs of financial difficulties. This same advice should be taken by people considering a career in solar as well.