SunPower, once a prominent player in the rooftop solar installation industry, has now filed for bankruptcy. The company has faced a myriad of challenges, ranging from high interest rates to allegations of misconduct in its reporting practices. As a result, SunPower’s stock has plummeted by 90% this year, with a drastic 32% drop to 55 cents per share on Tuesday.
In its Chapter 11 bankruptcy protection filing, SunPower disclosed assets and liabilities between $1 billion and $10 billion in the U.S. Bankruptcy Court for the District of Delaware. TotalEnergies, the company’s largest stakeholder, is facing the repercussions of SunPower’s downfall. To mitigate its losses, SunPower is in the process of selling its Blue Raven Solar and new homes businesses, along with its non-installing dealer network to Complete Solaria for $45 million, pending court approval.
Allegations of Misconduct
The downfall of SunPower is not solely attributed to financial struggles, but also to allegations of misconduct in its reporting practices. The U.S. Securities and Exchange Commission subpoenaed SunPower in February over revenue recognition practices in quarterly reports from 2023. Ernst & Young, the company’s independent accountant, resigned in June citing concerns over the integrity of the company’s financial statements and allegations of misconduct by senior management.
The residential solar sector as a whole has been hit hard by high interest rates, leading to a decrease in demand and an oversupply of inventory. SunPower’s decision to halt new leases, product shipments, and installations further exacerbated its financial woes. The company breached a credit agreement in December, casting doubt on its ability to continue operations.
SunPower’s journey from a thriving solar installer to a bankrupt entity is a cautionary tale of financial mismanagement and misconduct. The company’s rapid decline serves as a reminder of the importance of transparency and ethical business practices in the corporate world. As SunPower navigates through the bankruptcy process and seeks to sell its assets, it serves as a stark reminder of the consequences of unsustainable business practices.