A Problem in the Solar Industry

April 23, 2019

The solar boom in Australia has received much attention as one of the fastest growing markets in the world for rooftop solar installations. The reason for this solar boom is a combination of extremely high electricity prices, blessed with good solar energy and generous solar rebates/incentives from the state and the federal government.

Because of this solar power system be come an attractive and exciting business in Australia, that reached 3,800 solar companies as of 2014 and over 4,000 accredited solar installers as of 2018. As you can see, this is a significant number if you consider that the solar industry has less than ten years in the market.

However, some numbers that may be dangerous for the industry have remained hidden. According to estimations from LG Energy Australia, over 650 solar companies have gone into liquidation or proposed deregistration since 2011.

These numbers of solar companies going into bankruptcy are alarming for the whole PV industry since they mean that over 650,000 solar power systems are now left without warranty. This represents nearly 30% of the 2 million PV systems installed in Australia according to Solaray Energy.

Why do solar companies go into bankruptcy?

Despite that solar energy is a business that has many benefits for Australia, the truth behind it is that cash flows on solar companies can be hard. Therefore, if one big commercial project goes bad or claims warranty procedures, then it could be a disaster for the company.

Moreover, many solar retailers choose manufacturing brands that have a lower cost on solar panels or inverters. A small solar company can cover the warranty of a couple of faulty systems . However, if the solar inverter model selected is defective and the company had installed 500-1000 of them, then it might be hard for a solar company to recover from that.

What should I do to avoid risky solar companies?

It is hard to predict the future on whether or not a solar company will be reliable over time. However, there are some steps that you can take to avoid finding yourself in an uncomfortable situation with a solar panel installation without warranty. Let’s take a look:

  • Find a CEC solar installer/retailer with years of experience in the Australian market.
  • Check the status of the company in the ASIC Connect website and look for how long they have been under operation any insolvency notices.
  • Avoid retailers or installers that offer too low prices when compared to similar options.
  • Verify that the solar panel and inverter brands have local branch offices in Australia. If the solar company goes into bankruptcy, you will still be able to claim a product warranty on the manufacturing company.
  • Never choose a non-accredited solar retailer.
  • Always verify that the solar company has its own approved solar installers or choose CEC accredited solar installers that will answer completely for the installation.
  • Ask for customer references to whom you can talk. I don’t believe in online reviews because it is hard to verify authenticity.
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