Overview
America's residential solar industry is bleeding out. Over 100 companies filed for bankruptcy or shut down in the past two years—including giants like SunPower and Sunnova—wiped out by interest rate spikes, California's gutting of rooftop solar incentives, and Chinese manufacturers flooding the market with panels at 40% below US production costs. The carnage left 17,000 workers jobless and thousands of homeowners stuck with orphaned systems.
Now scavengers are picking through the wreckage. On January 8, 2026, Norwegian energy firm Otovo bought California service provider Solar Service Professionals, entering America's largest solar market by acquiring 38,000 stranded customers who still need someone to fix their panels. It's the signature move of this consolidation wave: well-capitalized survivors buying customer bases for pennies while installation revenue evaporates. The question isn't whether more companies will die—it's who'll be left standing when the shakeout ends.
Key Indicators
People Involved
Organizations Involved
Norwegian-founded solar marketplace pivoting to AI-driven service model in US market.
California solar service specialist with 38,000 customer base, no installation operations.
Major residential solar provider that collapsed under $8.5B debt, laying off 55% of workforce.
40-year-old solar pioneer collapsed with $2B debt and accounting scandal.
Sole major installer to remain profitable by embracing battery storage alongside solar.
Timeline
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Otovo Acquires Solar Service Professionals
M&ANorwegian firm enters California with 38,000-customer service base, expects deal accretive to 2026 net income.
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Otovo Acquires Soly's 24,000 Customers
M&ADutch solar provider's customers and assets acquired as European expansion continues.
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Otovo Completes US-Europe Merger
M&ANorwegian parent and US startup merge, creating global home energy service provider.
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John Berger Launches Otovo USA
LaunchSunnova founder returns with AI-driven service model, $4M+ seed funding. Pivots from installation to maintenance.
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Sunnova Files Bankruptcy with $8.5B Debt
BankruptcyOne of largest US clean energy failures. Company plans to lay off 55% of workforce.
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Solar Mosaic Files Chapter 11
BankruptcySolar lender collapsed after failing to secure financing, halting all new loans.
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John Berger Resigns as Sunnova CEO
LeadershipFounder steps down three months before bankruptcy as financial crisis intensifies.
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SunPower Files Chapter 11 with $2B Debt
Bankruptcy40-year solar pioneer collapses after disclosing past financials unreliable. Stock down 98% from peak.
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Ernst & Young Resigns as SunPower Auditor
InvestigationAccounting scandal deepens as auditor abandons 40-year-old solar company.
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Titan Solar Files Chapter 7 Bankruptcy
BankruptcyTop US residential installer collapsed, one of first major failures in consolidation wave.
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California Implements NEM 3.0
PolicyNew net metering rules cut rooftop solar export rates by 75%, triggering 80% volume decline.
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Sunrun Acquires Vivint Solar for $3.2B
M&ALargest residential solar consolidation in history. Combined company controlled 500,000+ customers and 3 GW capacity.
Scenarios
Service-Only Models Dominate, Installation Revenue Collapses
Discussed by: McKinsey, Wood Mackenzie energy analysts, solar industry trade press
New installation volume stays depressed through 2027 as high rates and weak incentives persist. The 4+ million existing US solar systems become the primary revenue source, with maintenance subscriptions ($150-300/year per customer) generating higher margins and valuation multiples than risky installation sales. Companies like Otovo systematically acquire orphaned customer bases from bankruptcies, converting one-time buyers into recurring subscribers. Traditional installer-financiers either pivot to service or exit. By 2028, the top three service providers control 40%+ of the installed base—essentially oligopoly. Total industry employment shrinks 30% from 2023 peak as service requires fewer workers than installation.
Policy Reversal Sparks Installation Recovery
Discussed by: SEIA (Solar Energy Industries Association), state renewable energy advocates
Federal or state governments restore stronger solar incentives by 2027—potentially reversing California's NEM 3.0 cuts or expanding the 30% ITC beyond 2032. Interest rates drop below 4% as Fed cuts continue. Installation demand rebounds 50%+ from 2025 lows, validating survivors like Sunrun who maintained capacity through the downturn. However, the shakeout permanently reduced installer competition, so pricing power shifts to the consolidated survivors who can charge higher margins. Homeowners pay 15-20% more per watt than pre-crisis levels despite rebounding demand. Failed companies' customers remain stranded with service-only providers.
Chinese Manufacturers Vertically Integrate into US Service
Discussed by: Bloomberg Energy, trade policy analysts, anti-China hawks in Congress
Chinese solar manufacturers—already dominating panel production at 40% below US costs—begin acquiring bankrupt US installers and service providers to control the full value chain. Vertical integration lets them subsidize US operations with manufacturing profits, undercutting independent service firms. Congress considers blocking Chinese ownership of US residential energy assets on national security grounds, sparking trade war escalation. If restrictions pass, Chinese firms partner with US financial sponsors as fronts. Either way, margin compression intensifies as Chinese-backed service providers wage price wars. Independent operators like Otovo face a second existential threat after surviving the installer shakeout.
Historical Context
Sunrun Acquires Vivint Solar (2020)
2020What Happened
In October 2020, Sunrun completed a $3.2 billion acquisition of Vivint Solar, the second-largest US residential solar installer. The all-stock deal nearly doubled Sunrun's market share, creating a company with 500,000+ customers and 3 GW of capacity—the largest residential solar provider in America. At the time, both companies were profitable and analysts framed consolidation as a growth strategy to achieve economies of scale.
Outcome
Short term: Sunrun achieved $90M in annual cost synergies and cemented market leadership.
Long term: The deal set precedent for M&A as the industry's primary growth strategy, foreshadowing today's distressed acquisitions.
Why It's Relevant
The Sunrun-Vivint deal was consolidation from strength—combining two healthy firms. Today's wave involves scavengers picking through bankruptcy wreckage. Otovo's SSP acquisition represents the new reality: buying customers, not capabilities.
US Telecom Industry Shakeout (1999-2002)
1999-2002What Happened
After the Telecom Act of 1996 sparked an infrastructure boom, over 500 competitive local exchange carriers (CLECs) launched to compete with incumbents. When the dot-com bubble burst and capital dried up, 200+ telecoms filed bankruptcy between 1999-2002—including major players like WorldCom ($104B debt) and Global Crossing. Survivors acquired assets for cents on the dollar.
Outcome
Short term: Massive job losses (500,000+ telecom jobs eliminated), stranded customers, and destroyed equity.
Long term: Industry consolidated into oligopoly dominated by AT&T, Verizon, and regional players. Infrastructure survived but competition permanently decreased.
Why It's Relevant
Solar's consolidation follows the telecom playbook: debt-fueled growth during easy money, mass failures when capital tightens, acquisition of distressed assets by capitalized survivors. The 100+ solar bankruptcies echo telecom's 200+ failures—both born from overleveraged expansion.
California Energy Crisis (2000-2001)
2000-2001What Happened
California's electricity deregulation combined with price caps created market manipulation opportunities. Energy companies like Enron gamed the system, causing rolling blackouts and bankrupting utility Pacific Gas & Electric. The crisis exposed how flawed policy design could destroy functioning markets. Notably, John Berger worked at Enron's fuel cell division during this period before leaving in August 2001.
Outcome
Short term: Rolling blackouts across California, PG&E bankruptcy, $40+ billion in economic damage.
Long term: California partially re-regulated electricity markets and maintained price controls that persist today.
Why It's Relevant
Today's solar crisis stems partly from California policy—NEM 3.0's 75% rate cut mirrors how price caps destabilized electricity markets in 2000-01. The state's tendency toward aggressive intervention backfired twice in 25 years. Berger's presence at Enron during that crisis makes his return to solar service amid another California-triggered collapse darkly symmetrical.