aerial photo of roof with solar panels installed and financial alert: California graphic

Though their business is supposed to help you keep the lights on, theirs are off: According to reports, major San Diego solar energy company Sullivan Solar Power has abruptly closed, leaving subcontractors unpaid and allegedly taking thousands of dollars from clients in the process.

“All the lights are still off. Everything is still there. You know, the coffee cup is still in the sink,” said customer Allen Davis. “The emails [are] not returned…I tried Twitter and Facebook direct-messaging and didn’t get any responses from those things.”

Similarly, client Kevin Hanks added “You just leave a voicemail. There’s no one answering the phones there.”

The company has been at the forefront of pushing solar in San Diego, and CEO Dan Sullivan himself has been considered a notable advocate for renewable energy within the city, previously saying that the company “has been fighting to move San Diego to 100 percent clean energy to show the world we do not need to depend on fossil fuels to power our homes, businesses, and vehicles.”

Sullivan Solar has been able to get some of the most notable solar installations done in the city as well in recent years, such as its 2018 installation of a 336,520-watt solar system at Petco Park, home of Major League Baseball’s San Diego Padres.

However, this notoriety and the business it brought isn’t translating to financial safety and comfort for the company’s clients. 

“They have about $34,000 of my cash,” Hanks noted. “I’m really disappointed…I paid them $45,000 for the roof. Sullivan didn’t pay for the roof to the roofer and now I have to pay $45,000 again.”

“Taking people’s money and not providing services and making promises and just walking away from, that is just terrible,” he added.

“It looks like exactly what the foreman told me, which was that the owner of the company abruptly shut the business down, fired everyone, locked the doors, and walked away,” said Davis.

There may be an impact on long-term concerns for the company as well, as the company’s responsibilities aren’t just to those who are having work done currently.

For example, client Bruce Pollock, who had an 8.32-kilowatt rooftop system installed by Sullivan Solar, is now worried about the status of his 20-year warranty offered by the company.

“I’m concerned if my system breaks tomorrow that I will have to pay for it to get it repaired and I don’t even know where I’d go,” Pollock said.

There may have been worrying signs prior to the company’s abrupt closure, however.

Client Kate Callen claims she spent $17,000 to have Sullivan Solar install a rooftop system on her home, with work completed in August 2021. However, her treatment from the company rose some alarm at the time. “At the end, they were extremely anxious about getting that last check (for $3,000) and that was a red flag for me,” Callen noted. “It was just really clear that they needed that check immediately.”

Subcontractors have power in this situation — and they may need to use it

Though the situation is going to be difficult for clients to reclaim their money, unpaid contractors who worked for Sullivan Solar have some legitimate power in their hands — and these moves could disadvantage the clients as well and cause some legitimate splinter disputes between lien claimants and disgruntled homeowners.

Subcontractors have full mechanics lien rights in California. If a property owner already paid the general contractor the full amount, but the subcontractor has yet to receive payment, they have the right to make a lien claim on the property. This can set up a number of opportunities for disputes to grow, however, as property owners can petition for liens to be released.

A lot of clients are already aware that there may be disputes on the horizon because of Sullivan Solar’s folding. Client Cromwell Cornillez-Ty notes that they had a $14,000 rooftop system installed by Sullivan Solar, who hired a subcontractor which has yet to be paid by Sullivan. Cornillez-Ty noted that this is leaving them potentially exposed to a $6,000 lien on their property: “I can’t blame the subcontractor because they have to be paid…I’ve tried calling (Sullivan Solar) and nobody responded.”

Attorney Mark Mellor added that this situation may get more customers to consider having subcontractors sign unconditional lien waivers — or to even make payments via checks that have been made out to both the contractor and the subcontractor of a project.

“Those two can fight over what they’re being paid because the contractor can’t cash it without an endorsement from the subcontractor and the subcontractor can’t endorse it without the other guy signing off,” Mellor suggested.

The problems contained in this strange case may have been alleviated with closer vetting of the company, too. The company and CEO Dan Sullivan are involved in a number of pending legal disputes. Court records for San Diego County show litigation against Sullivan Solar Power filed by Capital One Bank, First Insurance Funding, and Proven Solutions, LLC. Dan Sullivan is similarly facing a lawsuit from Proform Interior Construction Inc.

The company has also dealt with significant liens recently, too. The company has been hit with federal tax liens throughout 2021: July 7, July 13, and July 16, 2021, saw liens of $467,410.73, $442,334.78, and $562,314.44 levied against Sullivan Solar, while the company was served with an additional lien claim for $3,022.19 on October 5, 2021.

Even outside of Sullivan Solar’s problems, however, solar companies have struggled in 2021. Worldwide solar energy problems have been having a big impact on renewable energy providers in the United States. October 2021 was particularly difficult, as an example, after just a matter of a few days saw four solar companies around the nation file for bankruptcy.

Barry Cinnamon, CEO of the Silicon Valley-based Cinnamon Energy Systems, noted that solar is “inherently a low-gross margin business.”

“it’s extremely common for companies to get bigger and bigger and then start selling based on low price and find out they get into a cash squeeze,” Cinnamon said. “Their whole business is oriented around bringing in the next new customer, cutting prices, low margins, lots of excitement, and then it just crashes.”

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