The U.S. residential solar market is taking another hit as Lumio, a major player in the industry, files for Chapter 11 bankruptcy.
This move comes just weeks after competitor SunPower Corp. sought similar protection, signaling deeper troubles in the sector.
Lumio, a privately-owned Utah-based company, filed in Delaware with both assets and debts ranging from $100 million to $500 million.
The company isn’t going down without a fight, though. It’s proposing a sale to its main lender, White Oak Global Advisors LLC, in a $100 million credit bid deal.
This means White Oak would essentially buy Lumio using the money the solar company already owes it.
Why is the solar industry struggling? It’s a perfect storm of issues. California, once a haven for solar adopters, has changed its subsidy programs, making solar less attractive to homeowners.
Add to that the rising interest rates across the country, and suddenly those shiny roof panels aren’t looking so affordable anymore.
Lumio, a privately owned provider of residential solar panels, filed bankruptcy with a plan to sell its business to its primary lender, White Oak https://t.co/uVD6IKBcDI
— Bloomberg Green (@climate) September 3, 2024
Lumio is trying to put on a brave face amid the turmoil.
The company claims its day-to-day operations won’t skip a beat during this process.
There’s even a silver lining for employees if White Oak wins the bid – the lender plans to offer them “significant equity ownership,” according to Lumio’s statement.
To keep the lights on during this rocky period, White Oak has agreed to provide $8 million in emergency funding.
This cash will help Lumio pay its bills and keep operating while it sorts out its finances.
But it’s not all smooth sailing. Lumio has already had to tighten its belt, laying off about 100 full-time workers.
SunPower got approval to sell its assets to rival Complete Solaria, after declining demand and rising inflation pushed the California solar firm into bankruptcy in August https://t.co/axm9b0zVYz
— Bloomberg Wealth (@wealth) August 29, 2024
The company now employs around 1,250 people, all of whom are likely watching this situation closely.
This bankruptcy trend in the solar industry raises some tough questions.
Is the push for renewable energy hitting a wall? Are government incentives doing enough to support the industry? And how will companies like Lumio adapt to survive in this changing landscape?
As the solar market faces these challenges, it’s clear that the road to a green energy future might be bumpier than many on the left expected.
READ NEXT: Grocery Store CEO Reveals Real Reason Prices Continue to Rise
The coming months will be crucial in determining whether companies like Lumio can weather this storm or if we’ll see more casualties in the residential solar sector.