Why do so many solar companies file for bankruptcy?

In a list compiled from the ASIC website, over 500 solar companies have gone bust, or has had action taken against them, in just the last eight years. The list which can be found here (https://bit.ly/2ObPF2a) will leave a bad taste in your mouth, especially if you have used one of these companies. A certain regret that you bought into the cheapest quote on offer may fill you.

The main reasons why solar companies go bankrupt start with poor business practices and poor management. Which appears on the surface as an effort to offer the cheapest prices – their margins are often too slim and they are not able to continue operating.

Usually because of a combination of the above two reasons, these companies hire poorly qualified sub-contractors at cheaper prices. These contractors are likely to do a shoddy job as they rush to fit in as many installations as they can in a given day, to be able to make a living. Needless to add, this often leads to serious workmanship faults such as leaking roofs, and non-compliant electrical work.

On many occasions, these solar companies will ignore a customer’s demand to fix poor workmanship for as long as possible. Soon enough, these companies clock up too large a liability against them to return and fix poor installations, that it becomes an easier option to file for bankruptcy. Often they just start again under a new business name, usually filed for under a relative’s name for legal reasons, and thus start the whole process all over again.

Some solar companies are forced to close down when legal action is taken against them, sometimes for false and misleading advertising, sometimes for breaching consumer laws.

If your installer has gone out of business, who will come and fix your leaking roofs, or replace your faulty inverter or panels? You will be out of pocket, having to call another solar company to come and rectify the poor work or poor products.
Potential solar system buyers need to take heed and be careful who they engage with for their solar installation. First of all, a potential buyer should only ever consider engaging a Clean Energy Council Approved Solar Retailer (http://www.solaraccreditation.com.au/retailers/approved-solar-retailers.html), but even that is not necessarily a guarantee they will be getting a quality installation. At least it is a start. Secondly, they should take the time to look up the reviews these companies have received from customers. A good third party review site is Word of Mouth (https://www.wordofmouth.com.au/reviews/total-solar-solutions-australia-bayswater), who independently vets each review to make sure they are legitimate. Thirdly, a potential buyer should research the solar products, the panels and inverters being offered, to make sure they are getting a quality brand with reliable warranties.

Unless a person is having a solar system installed in a house they only intend on living in for a few years, in every single case it always works out in their favour economically to opt for the premium solar products, and premium installer.

The difference in savings over a 25 year period for a 5kW solar system, comparing installations using top of the range solar panels like LG, vs. cheap solar panels, can amount to well over $15,000 over that period. Based on real world and proven degradation rates and performance of poor quality panels vs. top of the range panels like LG. So, for the sake of spending a few thousand dollars more to get the best solar system upfront, your long term savings benefits will always more than justify the extra expense on getting a quality system.

So, choose a high quality and reputable installer, and choose high quality solar products, and you will be glad you did.

Total Solar Solutions Australia has a wide array of options to suit your best needs. Talk to us today for your solar energy needs.