Frank and Angela Haynes wanted to put solar panels on their century-old home in Albany, about 20 miles west of St. Cloud.

Frank Haynes worked for an electric utility years ago, when most electricity was produced by burning coal. He knew that solar is becoming an affordable energy alternative to reduce fossil fuel use, which produces greenhouse gasses that contribute to climate change.

“There really aren’t many ways that individuals can do that, so we felt that it was something that we could do,” he said. “Everybody’s got to do a little something.”

In hindsight, Haynes said he probably should have been a little more cautious when choosing a solar company.

Haynes said he clicked on an online advertisement about solar energy and contacted Brio, a Utah-based solar sales company. A few months later, he signed a contract for a rooftop solar energy system.

It was a frustrating experience, he said, marked by numerous delays and frequent staff turnover that made it difficult to get answers.

“From August, we didn’t have a working system until nine months later,” Haynes said. “And there were huge gaps in there, like months and weeks where we didn’t hear from them at all.”

Last month, Minnesota Attorney General Keith Ellison announced he is suing four Utah-based solar companies: Brio Energy, Bello Solar Energy, Avolta Power and Sunny Solar Utah. The lawsuit also names three company executives.

Ellison said the companies led customers to believe they were affiliated with their local utility. He said they used high-pressure sales tactics to convince customers to sign binding contracts, and threatened legal action if the homeowners tried to cancel.

Assistant attorney general Kirsi Poupore said the companies’ executives instructed sales staff to exaggerate the financial benefits of solar panels, especially to elderly homeowners.

Brio, which has since changed its name to Avolta, didn’t respond to an emailed request for comment.

Lawsuits welcomed

Some advocates of solar energy say they welcome the lawsuits against unethical companies that put the industry’s reputation at risk.

“Anything that we can do to eliminate bad actors and mitigate harms to consumers is the best thing to do for the long-term success of our industry,” said Logan O’Grady, executive director of the Minnesota Solar Energy Industries Association, a trade group with 145 members in the solar and energy storage industries.

There are plenty of reputable companies doing business in Minnesota, said Bobby King, state director of Solar United Neighbors, a nonprofit solar purchasing cooperative. He recommends getting multiple bids and references, and shopping around for financing before choosing an installer.

“I also wouldn’t sign anything until someone’s visited your home, looked it over, and then come back to you with a proposal based on that visit,” King said.

All-Energy Solar, a St. Paul-based solar designer and builder, has been asked to fix some of the faulty systems. CEO Michael Allen said experienced solar companies can provide a precise estimate of how much electricity a system will generate at a given location using weather data.

“We can tell you exactly how much sun is going to shine in St. Paul, within reason, year over year over year,” he said.

Solar is an investment a homeowner will live with for the next 20 to 30 years, Allen said, so it’s important to pick a company that will be around for the long term.

“What we’re finding that’s really sad, as we’re fixing a lot of these problems and customers’ issues, is that they don’t even know who they actually ultimately contracted with,” he said.

Another obstacle many home and business owners have encountered is a delay in getting small solar projects connected to the electrical grid.

Earlier this year, Minnesota’s utility regulators told Xcel Energy to work to clear the backlog of projects that have resulted in delays.

There has been some improvement in the wait times since the Minnesota Public Utilities Commission made some adjustments to the approval and connection process, O’Grady said.

Happy with his choice

Despite the setbacks, Haynes said he’s still glad he chose solar energy. The system on the roof of his garage is now producing between 40 to 60 percent of his electricity.

Haynes’ system cost $22,000 after a 26 percent federal tax credit. In eight to ten years, he expects it will pay for itself with savings on his electric bill.

“Our payment for the solar system is less than our average electric bills,” he said. “And at the end of 10 years, we’ll own it, and it’ll still be going for another 15 years.”

Haynes isn’t part of Ellison’s lawsuit. But he did contact the attorney general’s office to share his experience, which he said wasn’t all negative. Brio paid for damage to his lawn that occurred during installation, and for his electric bill during the time the panels weren’t working, he said.

Haynes said he probably paid more for his solar system than he would have if he’d done his research first. But for him, knowing that the solar panels will be producing clean electricity for years to come makes that investment worthwhile.

“We would do it again, because we have more motivation than just the money,” he said.

Despite rising costs and supply chain woes, U.S. residential solar continued to grow nearly 30% year-on-year in 2021, reaching a record-breaking 4.2 gigawatts (GW) of new installations. A sizeable chunk of that business went to Freedom Forever. The California-based solar installer has secured 3.9% of the U.S. residential solar market share last year, overtaking Tesla in the top three for the first time, says Wood Mackenzie.

Some of that is by design, notes Wood Mackenzie research associate Caitlin Connelly:

“Freedom Forever’s installation volumes grew a massive 80% in 2021, and the company entered 12 new state markets. Simultaneously, Tesla has become increasingly dependent on subcontractors for solar installations as the company shifts its business model more towards that of a full-suite technology supplier. Given these two factors, we expect to see Tesla continue to decline in the installer rankings over the next several quarters.”

At its current rate, Freedom Forever’s growth puts pressure on runner-up Titan Solar Power’s position (4.8% market share) going into 2022. While Titan managed to grow installation volumes and market share in 2021, its growth is significantly smaller compared to previous years. As large regional installers with expansive networks, Titan and Freedom Forever often compete for sales volumes, and their operations overlap in 15 state markets.

Additionally, both companies follow similar business models that rely solely on third-party sales companies. Outsourcing sales to third-party companies – a customer acquisition strategy also used by Sunrun – continues to be a popular tactic for top installers looking to create efficiencies as they expand their geographic footprints.

For the fifth consecutive year, publicly-traded Sunrun maintains its top residential installer position, securing 13% of the total market. However, Sunrun’s market share is down nearly a point since 2020 – the second year in a row the company experienced market share declines. Although both Sunrun’s direct and indirect installation volumes continue to grow, flat Q4 volumes attributed to Omicron-related labour shortages ultimately hurt their market share for 2021.

“While Sunrun still maintains a comfortable lead, the rising pressure on the company’s growth rate is a testament to the unyielding momentum of other top players,” Connelly says.

Together, Sunrun, Titan Solar Power, and Freedom Forever command over 20% of the US solar residential market.

Further down the Leaderboard, competition continues to intensify. In the latest example of consolidation in the residential market, SunPower announced the acquisition of Blue Raven in October 2021. In 2020, SunPower and Blue Raven made up 1.4% and 1.0% of the total market respectively. Heading into 2022, the combined entity SunPower holds 2.7% of the total market, settling comfortably ahead of both Momentum Solar (#6 with 2.2% market share) and Trinity Solar Power (#7 with 2.0% market share).

Connelly said: “The acquisition of Blue Raven strengthens SunPower’s direct installation business, expanding their geographic footprint for direct installs from eight to 19 states. SunPower has noted that direct installs are central to expanding service options and revenue streams.”

The residential finance market is also consolidating. The top five largest players financed over 70% of the residential market in 2021, up from 60% in 2020. Market consolidation ramps up competition between financiers, driving down interest rates and dealer fees.

• GoodLeap held onto its position as the top financier and loan provider, capturing 26% of the total market.
• Sunrun leads the third-party owned (TPO) market, capturing 15%.

While TPO capacity volumes grew in 2021, loan volumes continue to dominate new growth and now represent over 60% of the market. Wood Mckenzie expects this trend to become the norm over the next couple of years before the investment tax credit expires for customer-owned systems in 2023.

A recent survey conducted by Rocket Homes, a national platform for homebuyers, found that 66.5% of those who don’t have solar on their homes are interested in getting it in the future.

To understand homeowner interest in and experience with residential solar power, Rocket Homes surveyed 2,096 homeowners across the US. Nearly 30% of respondents say they already have solar panels or solar shingles or are in the process of getting them.

Those who purchased their homes recently are far more likely to have solar: Only 9.7% of those who purchased prior to 2000 have solar, versus 35.3% of those who purchase in the past two years.

Reasons given for wanting to go solar include lowering their electric bill, being eco-friendly, cost payback, the reliability of the electricity, and to reduce or eliminate reliance on the local utility. While payback for system owners varies widely, according to Rocket Homes data, homes with solar are nearly 25% more likely to sell for more than the asking price and spend 13.3% less time on the market.

While 90.7% of respondents said their reason to go solar was to lower their electric bills, it didn’t seem to matter whether the respondents had high electric bills or not. 53.2% of those paying $60 or less a month for electricity showed interest in going solar, and 69.2% who pay more than 200 are interested in putting solar on their homes.

What’s keeping many from going solar? Nearly 75% said it’s the upfront costs, and another 43.8% said the costs of solar outweighs the benefits. Additionally, over 40% said they’d need to upgrade their roof before a solar installation, so that added cost was also a deterrent.

Around half the respondents indicated that financial assistance, tax incentives, grants, or good financing options would motivate them to go solar. While incentives do exist on the federal level and in some states and local jurisdictions, it seems that educating homeowners on existing solar assistance and potential financing options could help homeowners overcome the financial barrier.

A recent SEIA/Wood Mackenzie report estimates that passage of some form of the Build Back Better Act with a long-term investment tax credit could boost US residential solar installations by 20%. Uncertainty around net metering policies is also stalling residential solar. In California in particular, Wood Mackenzie forecasts that the passage of NEM 3.0 could cut residential solar installations by half.