Solar-firm closures leave Tucson-area homeowners in the dark

Tucson-area residents are installing rooftop-solar systems in hopes of saving money on their power bills while helping the environment.

But some local homeowners have been stuck with high bills or incomplete or dead solar systems — and little recourse — as at least four solar installers operating in the Tucson area have gone out of business recently.

Hoping to arm consumers with information and shopping savvy, the Better Business Bureau Serving Southern Arizona and Tucson Electric Power recently teamed up on warnings about rooftop solar scams and unfair practices that generate problems rather than savings for consumers.

And members of a statewide solar business group are stepping up to try and help homeowners stuck without service because their installer folded.

Denisse Alvarez, operations director for the Tucson-based BBB, said the 20 complaints the nonprofit business group has received so far this year show many customers aren’t doing enough research before going solar.

“That might not seem like a large amount of complaints, but when you look at the dollar amount I think it raises red flags, because a lot of consumers unfortunately, are not doing their research and not understanding what they’re signing,” Alvarez said.

Local BBB President and CEO Irene Coppola said the educational collaboration with TEP is seen as crucial in ensuring consumers have the knowledge and resources they need to make informed decisions about solar energy.

Kathleen Patton, TEP director of energy programs, noted that the utility offers tools and resources to help consumers who are interested in installing rooftop solar.

“Unfortunately, hundreds of customers have reported they received misleading and inaccurate information about rooftop solar,” Patton said. “It’s critical for customers not to feel pressured and to choose an experienced, reputable solar installer that can meet their needs and expectations.”

The BBB and TEP cite several red flags consumers should watch for in solar scams currently circulating:

• Door-to-door salespeople who sign up consumers for new solar systems using only an electronic tablet and without providing a written copy of terms and conditions, promising to mail or email them later.
• Salespeople advising consumers to purchase rooftop systems that are larger than necessary, driving up initial costs.
• Companies claiming to be TEP- “preferred” or “approved” contractors. TEP does not endorse or have formal partnerships with any rooftop solar company, though it requires installs to be done by licensed contractors.

Alvarez said consumer’s solar homework should include taking the time to check on neighborhood references and the contractor’s state Registrar of Contractors license number — one recent scammer was using a license number that didn’t exist.

There are other signs of a fishy deal, as well — including demands for full or majority payment upfront before work begins, said Adrian Keller, Arizona program director for the nonprofit Solar United Neighbors.

In the case of the now-defunct Tucson Solar Pros, some projects were paid in full by the company’s lending partner, Tucson Old Pueblo Credit Union, which ended up settling consumer lawsuits over the payments.

“Consumers should generally avoid deals that require full upfront payment, that is usually a big red flag,” said Keller, whose group offers solar education and sets up local buying co-ops for rooftop solar.

Though payment schedules vary, Keller said the best practice is for three separate payments, say 15-20% upfront, then most of the balance upon completion of installation, and a final payment when the system is inspected by the utility and turned on.

Out of business

While smart solar shopping can avoid a variety of problems, many homeowners are facing hardship after the sale due to shoddy workmanship and disappearing contractors.

In 2022, Tucson Solar Pros suddenly went out of business, leaving scores of customers with more than $1 million in unbuilt or incomplete solar projects.

The company’s owner and operator, Daniel Ridlinghafer, was arrested in late July on federal charges of defrauding customers by taking payments with no ability to fulfill contracts. Ridlinghafer, who faces up to a $1 million fine and 30 years in prison, is still in federal custody after a judge in early August denied bail and ordered him held pending further proceedings.

Last November, Phoenix-based Erus Builders of Phoenix filed for Chapter 7 bankruptcy, in which a debtor’s remaining assets are liquidated to repay creditors, leaving a wake of customer complaints.

In June, Chandler-based Titan Solar Power filed for bankruptcy, listing about $9.9 million in assets and more than $24 million in debt. A trustee has been appointed to liquidate the assets of the company, which was founded in 2003 and operated in 22 states.

On Aug. 5, longtime national solar player SunPower Corp. filed for reorganization under Chapter 11 of the bankruptcy code.

Solar companies nationwide have been going out of business as installations have fallen due to higher equipment costs, higher interest rates and significant cuts to the credits solar customers get for their excess energy production in states including Arizona, as well as California.

At least 17 large solar companies, including SunPower, have gone out of business so far this year after more than 100 bankruptcies and closures in 2023 alone, according to SolarInsure, a solar warranty company.

SunPower’s bankruptcy is just the latest setback for Rose Dettmer, who assumed a leased SunPower rooftop system when she bought her Marana home.

The system started acting up in mid-2023, and in mid-July 2023, the inverter — a major component that converts direct-current power generated by the panels to household alternating current — gave out, said Dettmer.

She’s been fighting ever since to get SunPower to fix the system, and she’s had no help despite filing multiple complaints with BBB and the Registrar of Contractors.

One of the advantages of leasing a solar system is that the leasing company owns and maintains the system.

But SunPower was of no help, while its finance company keeps collecting $65 monthly lease payments, Dettmer said, adding that the inverter installed with the system is out of its factory warranty.

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“I have an electric bill that’s close to $200, and I’m a senior citizen on a very limited income,” she said. “This is trashing my budget and my finances.”

Dettmer, who works as an insurance underwriter, said she’s no dummy when it comes to finances but she now understands how solar deals can leave consumers at a disadvantage.

“I know how the fine print works, and it always ends up screwing the little guy,” she said.

Northwest side resident Charlotte Robertson didn’t know where to turn after Erus filed for bankruptcy and closed its doors.

Robertson said the company installed her system about six years ago, but it never worked as promised, resulting in high TEP bills on top of system loan payments.

“I’m still getting a big bill from TEP, and then I’m paying my loan, so they either didn’t put up enough panels or it’s not getting enough solar to help with my bill,” she said.

Finding help

Consumers who have problems with solar companies still in business should file complaints with the Registrar of Contractors, which can’t award monetary judgments but can order companies to correct issues.

The Registrar keeps information on the surety bonds that licensed contractors are required to post, which consumers and subcontractors may file claims against.

The Registrar also oversees the Arizona Residential Contractor Recovery Fund, which may be tapped when a company’s license is suspended or revoked. The fund paid out $4.9 million to 393 claimants in the 2023 fiscal year.

Cynthia Casaus, spokeswoman for the Registrar’s office, noted that to qualify for a Recovery Fund payment, a contractor’s license must have been suspended or revoked as a direct result of a formal complaint filed against the contractor’s license by the homeowner, who must have first filed a claim against the contractor’s license bond and received a final determination in regard to that claim.

Some homeowners with rooftop systems installed by failed companies may also get some help from factory warranties on solar equipment, said Louis Woofenden, engineering director and partner in Tucson-based Net Zero Solar.

Such product warranties range up to 25 years for photovoltaic solar panels, while inverter warranties generally range from 10 to 25 years, said Woofenden, who is a member of the Arizona Solar Energy Industries Association (AriSEIA) board of directors.

Manufacturers may assign a new local solar installer to handle warranty service on their product, but don’t expect them to go much further.

In SunPower’s case, the company had spun off its original solar-panel manufacturing business a few years ago into a new company, Maxeon, which recently said it would honor warranties on SunPower-branded and Maxeon panels.

Titan Solar’s biggest secured creditor, SolarEdge, supplied many inverters to the company and will cover problems with those products only, a company spokesman said.

“SolarEdge will honor the warranties for our products in case of failure,” SolarEdge head of investor relations J.B. Lowe said in an email. “I would note that we are an equipment manufacturer and not an installer, hence owners will need to get in touch with an installer.”

Product warranties don’t cover workmanship issues, and overall system production guarantees typically are part of the package sold by installers.

Stepping up

Some in the solar industry are stepping up to help homeowners with solar systems orphaned by failed installers.

Solar United Neighbors has set up an online help desk at solarunitedneighbors.org/help-desk where visitors can view buying guides or set up a phone call with a SUN expert. The group hosted its fourth Tucson buying cooperative cohort this year.

AriSEIA has advice for consumers on its website at ariseia.org/solar-customers, including a list of 11 Arizona solar companies willing to help consumers with systems stranded for service, including longtime Tucson-based providers Solar Gain and The Solar Store.

Woofenden said installers generally don’t like to work on systems that they didn’t install and may not be up to code, adding that his company isn’t currently doing such remedial work but is considering it.

Robert Neifert, business-development director of Solar Gain, said his company is one of the few in the state willing to service other companies’ installations and it has helped customers of failed companies, including Titan.

“It’s not our core business, but having a service team helps our customers, and it helps the community,” said Neifert, who sits on AriSEIA’s policy committee.

Besides, components on many older solar systems in Arizona are aging out, and though home photovoltaic systems typically don’t have any moving parts they may need some maintenance, or removal for various reasons, he said.

“Even a perfectly installed system will need some maintenance in its life,” Neifert said. “People need panels taken off because they have hail damage, or they’re re-roofing.”