Why Do So Many Solar Companies Fail?
Over the past decade, the solar industry has boomed. In 2018, the number of Australian households with solar PV installations reached 2 million. That’s an average of six solar panels installed per minute!
The solar industry is increasing, yet many solar companies have left. ABC News reports that more than 700 solar companies have gone out of business since 2011, leaving around 650,000 Australians without warranties if their systems are faulty. These are called ‘orphaned’ systems because no company can take responsibility.
So, how is it possible that so many solar companies have shut down in a booming industry?
Why Solar Companies Go Out Of Business
There are many reasons a solar company might shut down. One of the biggest reasons is how they handle claims against their products. Low prices conceal what is happening under the surface – subpar business practices and poor management.
It could be said there are two types of companies. The first are those who face adversity, doing everything they can to rectify product complaints. The second are those who, when facing such claims about their products, cannot fix the problem. The second company type is likelier to go out of business because they continuously overlook customer complaints.
Additionally, if the company uses low-quality, cheap solar products, the chance of going out of business further increases. This is because more affordable systems fail faster, leaving the company with a magnitude of failed systems at once. This can place stress on the company’s resources, causing a business to shut down due to increased pressure and the inability to deal with the problem correctly.
At this point, it’s easier for a business to declare bankruptcy instead of replacing many failed solar systems. When this happens, existing customers are left with few options and are forced to write off the failed system, starting fresh with a new company.
This situation is all too common for solar companies and many companies operating in different industries. Thankfully, it’s possible to prevent this by choosing a stable solar company and avoiding cheap products at all costs. Read More