Tax Shifts Push PosiGen Into Chapter 11

• PosiGen’s Chapter 11 spotlights fragile lease-based, low-income solar as tax-credit shifts gut revenue; the firm vows to operate through restructuring amid a reshaping residential incentive landscape.

PosiGen, a solar provider focused on low-income households, filed for Chapter 11, blaming federal incentive changes that slashed the value of tax credits on installations. The shift eroded revenue tied to credits and strained cash flow as customer-acquisition costs rose. The company, reliant on leasing and financing, says it will keep operating during restructuring, though its post-bankruptcy shape is unclear.

The filing dents efforts to expand inclusive solar and underscores fragility in the U.S. distributed-solar market, particularly for lease-dependent models. While larger commercial and utility-scale developers gain under the Inflation Reduction Act, smaller residential players face a shifting incentive landscape.

What does PosiGen’s bankruptcy signal for inclusive, lease-based residential solar economics?

• Lease-dependent, low-income rooftop models are highly sensitive to policy shifts and cost of capital; without stable, bankable incentives, their margins can vanish quickly.
  
• Rising interest rates and wider ABS spreads have made third-party ownership financing more expensive, eroding the savings leases can offer LMI households.
  
• Tax equity remains a chokepoint: appetite has shifted toward larger, simpler portfolios; rooftop LMI deals carry higher perceived risk and more complex compliance.
  
• IRA benefits skew to utility-scale and community solar; many rooftop leases can’t reliably capture adders (domestic content, energy communities) and lack direct pay, narrowing economics.
  
• Customer acquisition costs keep climbing as door-to-door and digital channels saturate; inclusive models have less room to absorb CAC spikes.
  
• Net metering rollbacks and lower export compensation (e.g., NEM 3.0 dynamics) compress lease value stacks, especially without paired storage.
• No-/low-FICO underwriting boosts inclusion but raises delinquency and servicing costs; required reserves and higher yield demands reduce customer savings.
  
• Lease escalators are colliding with volatile utility rates; if utility inflation cools, promised savings vanish, triggering cancellations and defaults.
  
• Battery add-ons can restore bill savings via self-consumption and grid services, but upfront costs strain lease economics without additional incentives or VPP revenue certainty.
  
• Securitization pipelines prefer standardized, prime-credit assets; LMI-focused leases face tougher takeout, slowing growth and increasing warehouse costs.
  
• State LMI rebates, green bank credit enhancements, and on-bill/tariffed financing can bridge the gap; absent these, inclusive leases will remain fragile.
  
• Expect consolidation toward platforms with cheap capital, diversified portfolios, and utility/municipal partnerships that lower CAC and credit risk.
  
• Inclusive ownership loans tied to the residential tax credit help higher-income households, but many LMI customers can’t monetize it; leases need refundable/transferable support to compete.
  
• Community solar subscriptions with guaranteed bill credits may deliver inclusion at scale more reliably than rooftop leases in today’s market.
  
• Signal to policymakers: durable, predictable LMI carve-outs, credit enhancements, and soft-cost reductions are prerequisites for sustainable, inclusive TPO rooftop solar.