New Jersey is making it easier for customers to complete a solar project if their developer fails, after hundreds of customers were left stranded by contractors who disappeared, including two installers that filed for bankruptcy and a third that was sued for unfair trade practices. 

The New Jersey Board of Public Utilities (BPU) on Feb. 14 enacted an order that allows the board to relax some solar project rules, including waiving timelines and some project registration requirements, for customers whose project stalls after their developer suddenly ceases work.  

BPU staff said the action was needed in part because the developer often handles the paperwork for a solar project’s application for incentives under the state Successor Solar Incentive program, and the customer could miss out on incentives if the developer is not around to complete the job. 

The move reflects New Jersey’s effort to protect customer projects — and the state solar sector — from the kind of developer failure that has impacted projects across the country as installers wrestle with rising costs and interest rates and adverse market conditions, often resulting in bankruptcies. 

More than 100 solar developers have filed for bankruptcy nationwide since the start of 2023, including 22 in California and 11 in Texas, according to California-based Solar Insure, which provides monitoring and insurance warranties for solar projects. 

The company said such a high number of bankruptcies was “unseen” in the past 20 years, and California was particularly hard hit due to the introduction of the Net Energy Metering 3.0 compensation plan, which takes effect in April and awards much lower compensation rates for the power that rooftop solar owners put back on the grid. (See Can US Maintain Record Solar, Clean Power Growth?)  

Developer Disappearance

The BPU’s Feb. 14 order helps soften the impact of a developer’s disappearance. The failure of three New Jersey solar developers, for example, created difficulties for 900 customers in meeting the ADI program requirements and deadlines, BPU officials said. 

“The abrupt withdrawal of an installer from the market affects not only the business and its employees, but also its customers,” the order states. “When a solar installer suddenly stops working on a project and returning phone calls, these customers are often left stranded.” 

If the developer persistently fails to communicate with the BPU about the status of a project, the agency will take steps to debar the developer, which then leaves the customer without a representative and hinders their efforts to seek incentives, the order said. 

“Staff believes that providing a limited waiver of the relevant rule(s) for the Affected Projects would provide the customers of those installers relief without unduly undermining the structure that the rules provide,” the order states. 

Fred DeSanti, executive director of the New Jersey Solar Energy Coalition, said the introduction of the rules reflects the BPU’s effort to help customers as the industries go through hard times and developers suffer bankruptcies and other “calamities that are beyond their control.” 

“There’s a lot of cost pressure on solar right now because they borrow a lot of money,” he said. “These are very capital-intensive installations. And the interest rates are through the roof … It’s really pushed a lot of companies very hard financially.” 

Customer Protections

The board’s order encourages customers who find their developer has departed to “find a new installer and re-register,” and the new rules make it easier to do so.  

The order allows the board to relax some rules for such customers and allows them to waive project timelines in certain circumstances. The order, for example, grants a waiver to customers on some time limits by which the project must redeem solar energy certificates, extending the period by which they can be redeemed to three years after the energy year in which the electricity was produced. 

The order allows the BPU to waive the requirement that a project receive a notice of conditional registration prior to starting construction for any affected project. And it directs the program manager to accept the registration and post-construction certification packages that carry the customer signature instead of requiring them to bear the installer’s signature. 

In addition, the BPU added two new categories of solar vendor to a database created to provide vendor names to customers so they can easily solicit several installer opinions and estimates. The two new categories are “Assistance for Distressed Customers” and “Operations and Maintenance Providers.” 

Legal Action

The BPU’s action was triggered in part by two cases in which the BPU heard from customers that developers Zenernet and Orbit Energy and Power had stopped responding to the customers and stopped communicating with the BPU’s third-party solar registration manager, TRC Environmental Corp., according to the BPU order. The BPU sent the two developers notices of “suspension and debarment” after they failed to respond to the company’s inquiry into whether they still were in business. 

The BPU last summer also began hearing from customers that Vison Solar, of Blackwood, N.J., had stopped responding to inquiries, eventually prompting the BPU to send a notice of suspension and debarment. 

Vision Solar by then faced a lawsuit, filed by the Connecticut attorney general on Feb. 27, 2023, that accused the company of engaging in “marketing and/or sales tactics that, separately or taken together, cause or influence consumers to execute lengthy and expensive solar contracts without the ability to make an informed, independent choice.” 

Customers suffered unreasonable delays in getting their solar systems activated and “incurred payment obligations to third-party lenders for solar systems they cannot use” because Vision failed to get the necessary permits, according to the suit. The BPU sent the company a letter of suspension and debarment Dec. 3. And a few days later, Vision Solar filed for Chapter 7 bankruptcy and went out of business, Connecticut Attorney General William Tong said in a January release. 

The BPU also sent solar developer Suntuity, of Holmdel, N.J., a notice of suspension and debarment this year after the company did not respond to an inquiry as to whether it still was in business. At the time, the company had “hundreds of incomplete registrations pending,” the BPU said. The Better Business Bureau website also lists multiple consumer complaints against the company.  

Customers in New Jersey, as in other states, have faced extravagant, and sometimes misleading, claims from developers eager to tap into the consumer enthusiasm for clean energy generation and the availability of government incentives to bring down the cost. 

The excessive claims last year prompted the BPU to issue a “scam warning,” which remains on the agency website. It states the agency “does not have a program that offers free solar panel installation for residents of the state. Any claims that such a program exists are false.” The announcement urged consumers to check the incentives listed on its website.