It has been a hard year so far for residential solar companies. In the first quarter the national residential market declined 17% year-over-year, one of its few contractions in the last five years. Much of this was driven by California, the largest market, where the decline was particularly intense.
Last week American Solar Direct (ASD) joined the list of distributed solar companies which have filed for bankruptcy this year, which includes Sungevity and Heliopower. And unlike these other companies, there will likely be no restructuring for ASD. The company voluntarily filed for chapter 7 bankruptcy, which usually results in the liquidation of assets.
As distributed solar installer heavily dependent upon the California market, ASD was in a position to be particularly hard hit by these changes, and had already gone through rounds of layoffs. However, it is not clear that this was the sole factor that brought about the company’s profoundly bad financial situation. At the time of filing, ASD had less than $50,000 in assets, and $10-$50 million in liabilities.
This is a long fall from the $36 million in revenue the company earned in 2014, when it found its way into a second year on the Inc. 5000 listing, after 159% growth over a 3-year period. At the time the company had 417 employees.
This is not the first time that ASD has been in hot water. At the beginning of its massive growth spurt in 2013, one of the company’s vans was the subject of televised police chase which only ended after the driver rammed another car.