Titan Solar Power, a residential solar installer founded in 2013 in Arizona, sent an email to its employees informing them it has failed to sell the company to prospective buyers and will close its doors permanently.
Titan was among the largest residential solar installers in the nation, with tens of thousands of installations across 16 states. It grew quickly through its Solar Dealer program, a network of partnerships with sales organizations that sold Titan services, while Titan focused on installations. The partnership was based on a pricing model where Titan charged a fee for completing the project, and dealers retained the remaining balance as sales commission.
“Despite these achievements, the company faced criticism over its business practices, workmanship, and customer service, leading to numerous negative reviews and legal disputes,” said Ara Agopian, chief executive officer, Solar Insure.
Solar Insure, a leading residential solar insurance provider, said the reliance of third-party dealers for sales created a layer of separation from Titan and its customers, leading to communication gaps and inconsistent service experiences. The insurance provider maintains a list of solar bankruptcies and business closures here.
Titan said it had been negotiating with a potential buyer for six months, and the deal fell through on June 11, causing management to make the decision to close operations. Solar Insure said the Federal Reserve’s rate hikes to combat inflation inadvertently impacted the solar sector by making borrowing more expensive. This led to decreased consumer demand for solar energy systems, as higher borrowing costs diminished the appeal of solar as a cost-saving investment.
The higher interest rate environment has led to increased cost of capital for installers, increased risk in solar lending packages and strained operating cash flows. This difficult financial environment was made worse by policy changes in key markets like California, which cut solar export compensation rates in its move to Net Energy Metering (NEM) 3.0.
Solar Insure said that while Titan’s dealer network business model was lucrative, it proved to be a double-edged sword. The sales organization dealers’ primary motivation was to maximize their commissions, which sometimes led to aggressive sales tactics and overselling of systems without adequate consideration for the customers’ specific needs, it said.
“This disconnect between sales promises and installation realities further strained Titan’s resources and customer relations. As economic conditions tightened and borrowing costs increased, the financial pressure on both Titan and its dealers intensified, exacerbating cash flow issues and operational inefficiencies,” said Agopian.
Customers of Titan Solar are now left in a situation where their 25-year workmanship warranty is now void. Solar Insure offers a program called Solar Detect, designed to assist homeowners abandoned by a bankrupt solar contractor with long-term maintenance service contracts.
