PosiGen files for bankruptcy after cuts to solar tax credits
By Dietrich Knauth
NEW YORK, Nov 25 (Reuters) - Solar power company PosiGen filed for bankruptcy in Texas late Monday, saying the Trump administration’s cuts to tax credits and subsidies for solar power had starved the company of cash and sparked disputes with its lenders.
PosiGen, which provided solar power to 40,000 residential customers in 15 states, ran short of cash over the summer, and the company ceased most operations after its lenders balked at investing more money into a declining market for U.S. solar power, according to court documents filed Tuesday.
The federal government’s shift away from solar power has caused many investors and lenders to pull back from the market, and it has pushed major companies like Solar Mosaic LLC, SunPower Corporation and Sunnova Energy International Inc into bankruptcy.
PosiGen not only suffered from the broader decline in the U.S. solar power market, but it also admitted to "mistakes" in the way it had done business in the past year. The company double-pledged some assets as collateral on more than one loan while it sought short-term financing, and it also violated debt contracts by commingling cash from different revenue streams, according to its court filings.
Based in Louisiana, PosiGen focused on providing affordable residential solar power to working-class families in the U.S. The company did not charge customers up front for solar installation costs, instead charging a monthly lease payment after the system was installed. PosiGen borrowed money for installations and it sold both tax credits and revenue streams from the customer leases to outside investors, according to court filings.
PosiGen said its customers had saved $45 million on their electricity bills in 2024 alone. But the business depended on government subsidies and tax credits for solar power, and Republican President Donald Trump’s administration has cut renewable energy tax credits while also imposing steep tariffs on key components of solar construction projects, according to the company.
PosiGen has $206 million in funded debt, and its primary lender, Brookfield Asset Management, had sought to foreclose on the company’s assets and transition most of PosiGen’s customers to a new solar power provider, according to court documents.
PosiGen opposed Brookfield’s proposal, saying that a court-supervised bankruptcy would buy time to complete solar installation projects that will provide future revenue. The bankruptcy will avoid a “slow dismemberment of the company” and provide a better outcome for stakeholders including customers, employees and investors who had purchased solar investment tax credits from PosiGen, according to the company’s court filings.
The case is In re PosiGen PBC et al, U.S. Bankruptcy Court for the Southern District of Texas, No. 25-90787.
For PosiGen: Charles Koster, Thomas Lauria, Michael Shepherd, Fan He, Andrea Kropp of White & Case LLP, among others.
Read more:
US solar installation forecast slashed due to Trump policies, report says
Trump administration will end $7 billion solar energy grant program
Trump's energy pivot accelerates US solar and wind power mergers, asset sales
A timeline of Trump's moves to dismantle the US wind and solar energy industries
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