Industry expert warns solar tsunami to hit many households as installers go broke

As the Federal Government's expanded commercial solar rebate takes effect, energy industry experts warn Australia's next solar gold rush could leave businesses facing enormous losses unless they check who is actually building their systems.
 

Australian businesses rushing to take advantage of the Federal Government's new commercial solar rebate are being warned they could lose hundreds of thousands of dollars to failed installers, abandoned projects and worthless warranties as a wave of operators moves into the lucrative commercial market.
 

The warning follows the expansion of the Small-scale Renewable Energy Scheme on 1 October 2026, extending eligibility to commercial solar installations of up to 1 MW and potentially reducing upfront costs by around 20 per cent.
 

While the changes represent an enormous opportunity for Australian businesses to reduce electricity costs, industry experts fear the incentive could also trigger a repeat of the problems experienced during Australia's household solar and battery boom, when rapid market growth was accompanied by installation complaints, business failures and customers left out of pocket.
 

Nicholas Stavroulakis of Australian commercial energy company Agile Energy warned that businesses considering solar installations worth hundreds of thousands or even millions of dollars must investigate the financial stability, experience and long-term obligations of their installer before signing a contract.
 

"We have undertaken research to understand the health of the sector and the results are deeply concerning. Solar companies are failing and collapsing at record levels. Many are teetering on the edge of closure," Stavroulakis said.
 

"While the rebate is excellent policy, it is also creating perfect conditions for another wave of solar industry failures because whenever government incentives attract large amounts of money, new operators rush into the market," Stavroulakis said.
 

"Some are excellent businesses with the expertise, financial backing and experience to deliver these projects. Others have been selling household batteries and small residential systems and are suddenly quoting on half-million-dollar commercial installations.
 

"The danger is that a business signs a contract, pays a substantial deposit and discovers halfway through construction that its installer has collapsed.

"At that point, the rebate becomes irrelevant because the business could be left with an unfinished solar system, lost payments, major operational disruption and nobody responsible for fixing the problems."
 

The household battery boom should be a warning to every business owner
 

Stavroulakis said the rapid growth of Australia's household battery market demonstrates what can happen when government incentives dramatically increase demand.
 

According to industry figures cited in his analysis, daily household battery installations rose from approximately 200 to more than 1,500 following the introduction of the federal household battery rebate in July 2025.
 

The expansion was accompanied by a sharp rise in consumer complaints.
 

The Australian Competition and Consumer Commission reported a 107 per cent increase in consumer reports relating to household batteries and new energy services over a year, including complaints about unsuitable systems, faulty installations and poor performance.
 

The NSW Energy and Water Ombudsman also reported a 79 per cent increase in solar and battery complaints during the April to June 2026 quarter compared with the corresponding period a year earlier.
 

Clean Energy Regulator inspection results cited in Stavroulakis's analysis found that 62 per cent of 3,425 rebated battery installations inspected to 30 June 2026 were classified as substandard, with identified problems attributed to installation practices.
 

"These figures should be setting off alarm bells because they show what can happen when an industry grows faster than the capability and quality controls of some of the businesses entering it," Stavroulakis said.
 

"We are now extending substantial financial incentives into commercial projects where the stakes can be considerably higher.
 

"A household might lose thousands of dollars when something goes wrong. A manufacturer, warehouse operator or commercial property owner could be exposed to hundreds of thousands, and an unfinished project could interfere with the operation of the entire business."
 

Solar company collapses have already left customers paying the price
 

Stavroulakis said recent business failures across the solar and energy industry should be prompting much greater scrutiny of contractors.
 

A tracker compiled from ASIC insolvency notices and cancelled Australian Business Numbers has identified at least 279 Australian solar businesses that have ceased operating, although the figure includes different types of business closures and should not be interpreted as a count of insolvencies alone.
 

Recent failures and financial difficulties involving businesses including Macarthur Solar, Redflow, RedEarth Energy Storage and ZEN Energy have highlighted the potential consequences for customers, suppliers, creditors and other stakeholders when energy businesses encounter serious financial trouble.

Customers of Macarthur Solar were reportedly left with lost deposits of up to $17,600 following its collapse, while the failure of battery manufacturer Redflow in 2024 raised questions about the practical value of long-term product warranties when the company responsible for them no longer exists.
 

Stavroulakis said the broader construction industry provides another warning.
 

ASIC-derived figures indicate that 3,472 construction companies entered external administration during the 2025/26 financial year, representing approximately 24.5 per cent of all such appointments.
 

"People need to understand that a commercial solar installation is effectively a construction project, and the contractor needs the financial capacity to deliver it," he said.
 

"If the company building your system collapses, your deposit and progress payments may become unsecured claims in an insolvency, your project can be left unfinished and the warranties you thought would protect you may be difficult or impossible to enforce.
 

"A 25-year warranty looks impressive on paper, but it means very little if the company standing behind it disappears after three years."
 

The $250,000 deposit trap
 

One of the biggest risks, according to Stavroulakis, is the payment structure businesses agree to before construction begins.
 

He warned against large upfront deposits that expose customers to substantial losses before equipment has been delivered or work completed.
 

"Imagine signing a $500,000 commercial solar contract and being asked to pay 50 per cent upfront. That's $250,000 handed over before the system is operating," Stavroulakis said.
 

"If the contractor fails, you may be left trying to recover that money alongside every other creditor.
 

"Businesses should be negotiating payments linked to genuine project milestones, such as equipment delivery, installation and commissioning, and considering appropriate contractual protections for larger projects.
 

"The question isn't simply whether the installer can give you a competitive price. It's whether the company has the financial strength to finish the job and remain accountable afterwards."
 

A residential solar installer is not automatically a commercial solar expert
 

Stavroulakis said businesses should be particularly cautious of contractors entering the commercial sector without a demonstrated track record delivering large-scale installations.
 

Commercial projects can involve complex engineering, structural assessments, network connection approvals, substantial electrical infrastructure and detailed commissioning requirements.
 

"A 500 kW commercial solar installation is not simply a residential system with more panels," he said.
 

"Before signing, ask the contractor to show you at least three comparable commercial projects they have completed, preferably systems above 100 kW and speak directly to those customers.

"Find out who is actually doing the work, whether the contractor has the necessary experience and approvals, who carries the connection risk and what happens if the project is delayed.
 

"If the company cannot demonstrate that it has successfully delivered projects of a similar size and complexity, you need to ask why your business should become its experiment."
 

Seven questions every business should ask before signing
 

Stavroulakis urged businesses to undertake thorough due diligence before committing to a commercial solar project, including:
 

1. Who is actually building the system? Establish whether the business selling the project will install it or subcontract the work, and verify the commercial experience of those responsible.
2. Can the contractor demonstrate financial stability? Review company history, financial information where available, director backgrounds and relevant ASIC notices.
3. How much money is required upfront? Avoid unnecessarily large deposits and seek milestone-based payments and appropriate security arrangements.
4. Who is responsible for network approvals and delays? Confirm connection requirements, costs, timelines and contractual responsibilities.
5. What happens if the installer collapses? Understand who remains responsible for warranties, repairs, monitoring and completing unfinished work.
6. Who will maintain and monitor the system? Establish whether there are enforceable long-term maintenance and performance obligations.
7. Is the cheapest quote actually the safest? Investigate unusually low prices and compare the full commercial, technical and contractual offering rather than headline installation costs alone.
 

Stavroulakis said businesses should also obtain independent technical and legal advice for significant projects, particularly where long-term power purchase agreements or complex financing arrangements are involved.
 

The rebate should not determine who gets your business
 

The new federal scheme is expected to improve the financial attractiveness of commercial solar for businesses with substantial daytime electricity demand and suitable roof space.
 

However, Stavroulakis warned that the availability of a government incentive should not create unnecessary urgency or override normal procurement standards.
 

"Businesses are being presented with a significant opportunity, but that doesn't mean they should rush into contracts because someone tells them the rebate is too good to miss," he said.
 

"The rebate might reduce the upfront cost of a system by around 20 per cent, but choosing the wrong contractor can put the remaining investment at risk.
 

"Businesses need to be thinking about the next 20 or 25 years, not simply the next 20 days."
 

He said the structure of a solar agreement can be just as important as the equipment being installed, particularly when determining who carries responsibility for financing, construction, ongoing maintenance and long-term system performance.

"At Agile Energy, our approach is built around long-term performance rather than simply selling and installing equipment," Stavroulakis said.

"Through our funded power purchase agreement model, we retain ownership of the energy infrastructure and have a continuing commercial interest in ensuring the system performs.
 

"Businesses should be asking every provider what financial interest they retain in the project after commissioning, because a contractor that remains responsible for performance has a very different incentive from one that is paid in full and walks away."
 

Don't let a solar gold rush become your business nightmare
 

Stavroulakis said the expansion of the commercial solar rebate has the potential to accelerate Australia's transition towards more affordable, efficient and resilient commercial energy systems.
 

However, he believes the success of the policy will depend not only on how many systems are installed, but on whether those systems are properly designed, safely delivered and supported over their operating lives.
 

"Australia has an extraordinary opportunity to put commercial rooftops to work and help businesses reduce their exposure to electricity costs," he said.
 

"But the wrong installer can turn what should be a valuable long-term asset into a financial and operational nightmare. Don't let the rebate choose your contractor.
 

"Choose the company you believe will still be answering the phone in 2036, not the one offering the most convincing sales pitch in 2026."
 

About Agile Energy
 

Agile Energy is one of Australia's fastest-growing clean-energy companies, delivering large-scale solar, battery and electrification solutions for the commercial, industrial, healthcare and property sectors. The company designs, finances, builds and operates integrated clean-energy systems that help businesses reduce costs, decarbonise operations and participate in virtual power networks. With deep engineering expertise, financial discipline and a long-term ownership mindset, Agile Energy is redefining how organisations generate, store and trade electricity creating measurable financial and environmental performance across Australia's transition to a smarter, more resilient energy future. Further information can be found at: agileenergy.com.au