Sunpower Stops Supporting New Solar Lease and PPA Sales

Switching to solar energy over the last decade has become a popular choice for many homeowners. However, a significant shift is occurring in the solar industry. Sunpower has announced it will no longer support new leases and Power Purchase Agreements (PPAs). This announcement is a significant shift in its business model prompting homeowners to reconsider how they invest in solar energy. Keep reading to learn more about this change and what to do moving forward.

• Bankruptcy Filing: SunPower filed for Chapter 11 bankruptcy August 5th 2024 due to financial difficulties, signalling severe challenges for the company.
• Asset Sales: They are selling key assets to Complete Solaria, including Blue Raven Solar and parts of their dealer network, as part of the restructuring process.
• Operations Paused: Key operations were halted before the bankruptcy filing, indicating deeper issues within the company.

Key Takeaways:

1. No More Lease or PPAs with SunPower: Going forward, SunPower equipment will only be available with Cash or Financing options.
2. No Changes for Installed Customers: If you currently have a SunPower system installed with a Lease or PPA, nothing will change.
3. Canceled Installs for signed Customers: The vast majority of signed Leases and PPAs are canceled. If you have signed with SunPower or a SunPower Dealer for a Lease or PPA and it has not yet been installed, it is unlikely to move forward.
4. Trouble with Financing: The Change to SunPowers Financing options is a result of the complexity of providing competitive options for Leases and PPAs and high interest rates on loans.
5. Leases and PPAs are still a great option: Installing a solar array can be costly upfront, and PPAs and Leases provide a way to enjoy the benefits of solar energy without debt or a lien.
6. EnergyPal can Help: If you are an EnergyPal customer or a customer with a canceled installation who signed elsewhere we have a team currently working with homeowners to find a resolution to anyone affected by the changes.

What is Behind this?

When a customer signs a contract for a lease or a PPA (Power of Purchase Agreement), they do not own the solar system, instead, the company they signed with owns the system, and the customer pays to use the system in its entirety (a lease) or purchase electricity from it at a contracted price (a PPA).

As the company retains ownership of the solar system, they are able to collect the government incentives, and can thus provide a lower overall cost to the customer. However, it means that the company runs a temporary debt as they wait to receive the incentives, which can take months. In order to bridge this gap, companies seek out loans from large financial institutions. When interest rates go up, therefore, solar companies are susceptible to large payments back to these financial institutions on their loans, sometimes very suddenly. This can cause even large solar companies to run into issues with their financiers.

Learn more about solar financing options.

A Changing Industry

Sunpower's decision to halt new solar leases and PPA sales is significant.

Leases and PPAs are a convenient way for homeowners to access solar energy without the upfront costs. These agreements allow homeowners to install solar panels and pay over time, either through a fixed monthly lease payment or by purchasing the power generated at a set rate. This model was popular through SunPower because it reduced the financial barrier to entry.

Marcus Joo, an industry expert featured on BNN Bloomberg and Natural Geographic, spoke about the benefits and popularity of leases in recent years:

“Leases have taken off, they've grown in popularity since all the [utility] rate increases for two reasons: One is that people have a harder time affording the debt of financing solar, solar is not a $5,000 investment - It's $30,000 to $40,000.

And two, there are better government incentives available than there have been in the past.”

While leases and PPA’s are one of the most straight-forward options for customers, the financing and contracts are more complex for the company operating the lease.

Joo says that for him the news of SunPower ending their Lease and PPA options wasn’t that surprising, given the complexity of the financing:

“We saw the writing on the wall, we had some concerns and so we're prepared… To support tax equity financing, the underlying company needs to be financially secure and reliable.”

Leases and PPAs, Joo stressed, remain a great option, and spoke on how his company is pivoting given this news, given how their marketplace model allowed for a fast reaction time to reach out to customers with alternate options:

“[At Energypal] we're well prepared for this possibility. Our is set up for offering choice for consumers through impartial and unbiased guidance.

"We're in this for customers to have a great experience and get a great deal.

“We've already begun the process and started helping those customers pick up the pieces and move to other installation options that make sense for them.”

As for customers that didn’t sign with EnergyPal:

"We're also supporting many customers [who signed with other companies] who are kind of caught in the process. Maybe they went with a installer that uses SunPower financing or were sold by a sales rep that was employed by that installer, and now the installer essentially out of business.

“We're already getting calls and we're supporting customers and helping them transition in that process.

"We're confident that any customer that we work with will get a positive resolution.”

As for SunPower, they aim to focus on direct ownership models. By owning the solar system outright, homeowners can gain long-term financial benefits. While this solution won’t work for everyone, it is a positive sign that SunPower products will still be on the market, given their quality and longevity.

Moving Forward

As Sunpower transitions away from PPA and Leases, many customers who have started the solar process are wondering whether their project is still on track. The good news is that for customers who have begun the installation process they will be able to complete their project as expected, and for those with existing leases or PPA’s there will be no change to their contract. For customers who have signed but not yet started to install, the vast majority of these projects will be canceled.

Help: I signed a SunPower Lease or PPA and it got canceled, what can I do?

For those interested in solar energy, it's still a great time to explore options.

If a Lease or a PPA is still the right plan for you, Energypal reps are helping customers transition to similar equipment with a new plan.

For those worried that SunPower products won’t be available anymore, this is not the case.

SunPower Maxeon Panels and Batteries will still be available, but for now as purchase options only.

If you’re interested in seeing your SunPower options and other marketplace comparisons contact an EnergyPal rep for a free quote.

Conclusion

Sunpower's move to stop supporting new leases and PPAs marks a significant shift in the solar industry. Homeowners stand to benefit greatly from owning their solar systems, reaping the rewards of incentives and increased property value. Now is the time to explore solar energy options, take control of your energy production, and enjoy the long-term benefits of a cleaner, greener home.

Explore solar energy ownership today and join the movement towards sustainable living. Make a positive impact on the environment and your wallet by switching to solar power now!

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