Solar installer Sunworks (SUNW) has filed for bankruptcy with the Securities and Exchange Commission (SEC), submitting an 8-K filing on February 5, 2024.
The company has been in business for over 20 years, installing over 27,405 solar installations, adding over 224 MW of distributed solar energy to the grid nationwide. The company operates in major rooftop solar markets including California, Texas, the Southwest, the Carolinas, Florida, and the Northeast.
Under Chapter 7 bankruptcy, a trustee will be appointed to liquidate the company’s assets and settle any outstanding liabilities. Along with the bankruptcy came the resignation of chief executive officer Mar Trout, and the company’s board of directors.
The company noted a 29.5% decline in quarterly revenues year-over-year for Q3 2023. Its residential solar segment declined 44.5% over the same period, while the commercial solar segment climbed 105%. The company reported net losses of $36.5 million in the third quarter, with a loss of $0.84 per share.
Sunworks’ struggles did not happen in a vacuum. Throughout 2023, high interest rates and regulatory changes in California drastically shrunk demand by worsening the consumer economics of installing rooftop solar.
California used to represent about 50% of the United States’ rooftop solar market, but following the transition to NEM 3.0, demand and installations fell off a cliff. This led business insurer Solar Insure to warn pv magazine USA in December that 75% of its covered solar installers were at “high risk” for bankruptcy.
Also in December, publicly traded solar provider SunPower (SPWR) breached its credit agreement, causing the company to warn that it had “going concerns.”
SunPower’s stock has been battered down nearly 80% over the last year and is down 93% from its all-time highs in 2021. Earlier this month, the company received waiver extensions on debt until February 16, and the company announced the receipt of commitments for $20 million in financing from TotalEnergies and Global Infrastructure Partners.
Time will tell how residential solar installers weather the storm of a high interest rate environment. The California Solar and Storage Association (CALSSA) warned that more bankruptcies will likely persist in Q1 and Q2, while equipment provider Enphase said that the industry is nearing the bottom trough, and that 2024 will be “a year of recovery.”
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