PowerHome Solar Lawsuit: Lenders, WARN Act, and Bankruptcy

The PowerHome Solar lawsuit landscape is not a single case but a cluster of them, spun off from the September 2022 collapse of the Mooresville, North Carolina installer that rebranded to Pink Energy months before shutting down. Customers, former employees, nine state attorneys general, and Pink Energy itself have all filed suits. The company is in Chapter 7 bankruptcy with no creditor distributions expected before 2027, so most of the active litigation now targets the solar lenders that financed the loans, not the defunct installer.

What Customers Are Suing Over

The complaints from homeowners fall into a few recurring categories, and they form the factual basis for nearly every consumer suit and arbitration still moving through the system.

Sales representatives allegedly promised that solar systems would eliminate electric bills. Many customers ended up paying their full utility bill plus a new monthly loan payment. One Business Insider investigation found systems generating less than one-sixth of what was promised.¹ Fox 2 Detroit documented a customer paying $311 a month for a system while still averaging $150 in monthly electric bills.²

Salespeople also allegedly told customers they would receive a large cash payment from the federal solar tax credit. The credit is non-refundable: it offsets taxes owed rather than generating a check, so customers without enough tax liability get little or none of it. Many financing arrangements assumed the credit would arrive as a lump sum within 18 months to keep monthly payments from ballooning, and retirees without the taxable income to qualify were reportedly among those pushed into deals.¹³

Pricing was a third complaint. Company sheets obtained by Business Insider showed costs above $6 per watt, roughly double the industry average, and battery storage systems allegedly billed at about $20,000 carried a suggested retail price closer to $10,000. A “no-cost” solar program marketed by the company was in practice a long-term loan through a third-party lender.¹

Equipment failures ran alongside the sales allegations. The Generac PWRcell battery system Pink Energy installed relied on a component called the SnapRS inline disconnect switch, which Pink Energy later claimed had a failure rate above 40 percent. The parts could overheat, melt, or explode, and were linked to at least two house fires in Ohio, Virginia, and South Carolina. Jayson Waller, the company’s founder, told reporters that more than 10,000 customers had systems that were not working properly.⁴²

Suing the Lenders Instead of the Company

Because Pink Energy is in Chapter 7 liquidation, suing the company directly gets a customer little. The active consumer litigation targets the finance companies that funded the loans, and it rests on two legal theories.

The first is the FTC Holder Rule, a federal regulation that lets consumers assert claims against the loan holder when the original seller engaged in fraud or misrepresentation. The second is a “claims and defense clause” written into many solar loan contracts, which allows a borrower to raise the installer’s failures as a defense against the lender’s collection efforts.⁵

Tom Domonoske of Consumer Litigation Associates has filed a class action naming both Pink Energy and its finance companies, alleging bait-and-switch tactics, misrepresented savings, and fraudulent tax-credit promises.⁵ The firm Kneupper & Covey has taken a different route, pursuing individual arbitrations and lawsuits rather than class actions, on the reasoning that arbitration clauses in the financing contracts make class certification difficult. Much of that firm’s work has focused on GoodLeap, which funded more than $4.5 billion in solar loans nationally.

One arbitration in Georgia produced a significant result. An arbitrator, a former Chief Justice of the Georgia Supreme Court, ruled against GoodLeap under an agency theory, finding that Pink Energy had acted as GoodLeap’s agent. The homeowner’s roughly $90,000 solar loan was cancelled entirely, and GoodLeap was ordered to pay approximately $13,000 plus attorney’s fees. The arbitrator found that GoodLeap exercised control over Pink Energy’s warranty services, held the right to terminate the relationship, and paid “kickbacks” to Pink Energy for financing contracts.⁶

The WARN Act Class Action by Former Employees

Five days after the bankruptcy filing, three former employees — Nicholas Bates, Cody Fedder, and Elizabeth Dickerson — filed a class action as an adversary proceeding inside the bankruptcy case. Bates et al. v. Power Home Solar, LLC (Adversary Proceeding No. 22-03044) alleges the company violated the federal Worker Adjustment and Retraining Notification Act by failing to give roughly 1,500 employees the required 60 days of advance written notice before the mass layoffs between September 1 and September 22, 2022.⁷

The plaintiffs seek 60 days of pay and benefits for each affected worker, and priority treatment for up to $15,150 per claim within the bankruptcy. The case remains pending in the Western District of North Carolina bankruptcy court as of early 2026.⁸

State Attorneys General

Nine state attorneys general investigated Pink Energy for suspected consumer protection violations. The coalition was led by North Carolina AG Josh Stein and Kentucky AG Daniel Cameron, and included Illinois, Indiana, Michigan, Pennsylvania, South Carolina, Tennessee, and Virginia.⁹

On November 22, 2022, the coalition sent a formal letter to five solar lenders — Dividend Solar Finance, GoodLeap, Cross River Bank, Sunlight Financial, and Solar Mosaic — demanding they suspend loan payments and interest for customers who financed systems through Pink Energy but never received working installations.⁹ Michigan had been investigating separately since 2017, and by September 2022 a judge had found probable cause to believe the company violated the Michigan Consumer Protection Act.²

Missouri went further. Former Missouri AG Eric Schmitt filed a state-court lawsuit alleging violations of the Missouri Merchandising Practices Act, seeking injunctive relief, restitution, and civil penalties.¹⁰ In July 2024, a judge dismissed the case after the AG’s office failed to appear at a scheduled hearing. The office said it was pursuing restitution for Missouri consumers through the federal bankruptcy proceeding instead, calling that a “superseding federal claim.”¹¹

Pink Energy’s Lawsuit Against Generac

In August 2022, weeks before it shut down, Pink Energy filed a federal lawsuit against Generac Power Systems in a Virginia federal court, alleging negligence, breach of contract, and fraudulent inducement, and seeking punitive damages and a jury trial. Pink Energy alleged that Generac knew about the SnapRS failure rate but concealed the defect, and that a firmware update either did not reach offline units or locked down connected ones, preventing them from generating power. The company claimed monthly customer complaints jumped from 800 to 30,000 between late 2021 and early 2022.⁴

Generac disputed the allegations, said it was “confident in the safety of its products,” and pointed to poor installation and service by Pink Energy as the primary factor in failures. Generac said it intended to vigorously defend itself.⁴

The Bankruptcy and What Customers Can Expect

Power Home Solar filed a voluntary Chapter 7 bankruptcy petition on October 7, 2022, in the U.S. Bankruptcy Court for the Western District of North Carolina, Case No. 22-50228.¹²¹³¹⁴

Most physical assets have been liquidated. A total of 6,191 creditor claims were filed by the March 2023 deadline, and the trustee began the formal claims-review process in early 2026, expecting a large volume of objections that will need court resolution. The trustee has warned that no distributions to creditors are expected until at least 2027, and possibly not until 2028.¹³

For a homeowner still paying a loan on a Pink Energy system, that timeline matters. The bankruptcy estate itself is unlikely to produce a meaningful recovery any time soon, which is why consumer attorneys have shifted to arbitrations and suits against the lenders under the FTC Holder Rule and contract defense clauses.

What’s Left of the Warranties

Manufacturer warranties on solar panels and inverters technically remain in effect, and Generac stepped in after the collapse to offer warranty services to affected customers, though getting service has been difficult in practice.¹⁵ The workmanship warranty that Power Home Solar itself provided is permanently void as a result of the liquidation.¹⁶ Any installation defect covered by that workmanship warranty is now something a homeowner has to pursue through the lender-focused litigation described above, not through a warranty claim.

1
Business Insider. Powerhome Solar Misleads Customers
2
Fox 2 Detroit. Going Dark: Pink Energy Troubles Mount
3
Tennessee Attorney General. AG Joins Coalition Urging Solar Lenders to Suspend Payments
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Charlotte Observer. Pink Energy Sues Generac Over Faulty Solar Equipment
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WAVY. Customers Go After Solar Panel Company, Loan Companies in Court
6
Kneupper & Covey. Goodleap Loses Key Solar Arbitration
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ClassAction.org. Bates et al. v. Power Home Solar, LLC
8
ClassAction.org. Pink Energy Unlawfully Terminated 1,500 Employees Without Notice
9
North Carolina Department of Justice. AG Stein Calls on Solar Lending Companies to Suspend Payments
10
Regulatory Oversight. Missouri AG Sues Solar Company
11
First Alert 4. Missouri AG Fails to Show Up in Court
12
U.S. Bankruptcy Court, W.D.N.C. Power Home Solar, LLC
13
Hickory Law. Pink Energy Bankruptcy Information
14
U.S. Bankruptcy Court, W.D.N.C. Power Home Solar, LLC, 22-50228
15
Charlotte Business Journal. Pink Energy Class Action, WARN Act, Bankruptcy Court
16
Fox 2 Detroit. Pink Energy Reportedly Closes After Multiple Problems