iSun, one of the largest solar installers in Northeast, files for bankruptcy protection

Editor's note: This story has been updated with comments from iSun Chief Executive Officer Jeffrey Peck and SunCommon President James Moore.

One of Vermont's few publicly traded companies, iSun, declared Chapter 11 bankruptcy last week on Monday, June 3. The company hopes to emerge from bankruptcy and continue to do business as one of the Northeast's largest solar installers, according to Chief Executive Officer Jeffrey Peck.

Peck submitted a 34-page declaration in support of his company's filing in U.S. Bankruptcy Court in Delaware, in which he described iSun's dire financial situation. The company is currently losing $250,000 per week, and is forecasting a $10 million loss for 2024. That follows losses of approximately $19.4 million and $53.8 million in 2023 and 2022, respectively.

As the majority owner and president of Peck Electric Co., the local Vermont company that was iSun's predecessor, Peck said he "was responsible for the transformation of Peck Electric into one of the largest commercial solar (engineering, procurement and construction) companies in the Northeastern United States." Peck Electric was founded in 1972 as a traditional electrical contractor, but became one of the leading installers of solar arrays in the state.

Rising interest rates lead to increased costs and decreased sales

Peck blamed rising interest rates for iSun's woes, explaining that not only have the higher rates increased interest expense on variable rate loans the company holds, but also have depressed sales.

"The majority of (iSun's) cash flows to date have been from the sales of solar energy systems," Peck said. "Rising interest rates have had the effect of depressing the sales of solar energy systems because many consumers finance their purchases."

The combination of rising expenses and falling sales proved to be too much for the company. Last August, iSun reached out to England Securities, LLC, an investment banking firm with offices in New York, Houston, San Diego, Washington, D.C. and Singapore, to find a partner that would "help the company grow to the point that it was logical to remain public, and if not feasible, to consider going private."

Unfortunately, a "covenant breach" with one of iSun's existing lenders intervened, Peck said, and England switched to addressing that breach. Peck did not specify the nature of the breach, but it resulted in yet another loan in December 2023 from Decathlon Loan, based in San Francisco and Salt Lake City, of $8 million at an interest rate, "greater than 20%," according to Peck.

Peck said in an email on Wednesday the Chapter 11 reorganization is the "best path forward for iSun."

"This process will enable us to restructure our finances and operations to ensure our long-term sustainability and competitiveness," he said. "We are committed to minimizing any disruption to our employees, customers, and vendors during this period. Our operations will continue as usual, and we remain focused on providing the high-quality products and services that our customers expect from us."

James Moore, president of SunCommon, the Waterbury-based solar installer acquired by iSun in 2021 for $40 million, said in an email Wednesday the company is "continuing business as usual as iSun restructures."

"Our staff continue their top quality work helping Vermonters go solar and install energy storage," he said.

iSun has plenty of company in facing bankruptcy in the solar business

iSun is not alone in facing financial distress. The Street reported on June 5 that from early 2022 to mid-2024, 53 solar companies have closed their doors permanently, citing solar energy system warranty provider SolarInsure. In addition, 14 "major solar energy companies" have filed for either Chapter 11 reorganization or Chapter 7 liquidation during that period, according to The Street.

Peck reported in his declaration that the Nasdaq stock exchange suspended trading of iSun's shares on May 23 in preparation of delisting the shares. At the time of iSun's bankruptcy filing the company's stock was trading over the counter at 8 cents per share. Nasdaq filed a form with the Securities and Exchange Commission on June 3 to complete the delisting of iSun's shares, which will take place after 10 days, on June 13, according to Nasdaq.

Seven Days first reported iSun's bankruptcy.

CEO says company was 'on the precipice of shutting down'

Before filing its bankruptcy petition on June 3, iSun was "on the precipice of shutting down," according to Peck, but was able to negotiate a series of "save the company" transactions with Clean Royalties, LLC, which agreed to buy iSun as a "going concern."

Clean Royalties is affiliated with Siltstone Capital, LLC, an investment and advisory firm based in Houston, and has agreed to serve as the so-called "stalking horse bidder" in a sale of virtually all of iSun's assets, according to Peck. A stalking horse bidder establishes the lowest bid for a company's assets, but theoretically could be outbid in an auction.

"The Sale will provide for a continuation of (iSun's) business as currently operating, thus ensuring that (iSun's) customers will have in-process and contracted for work completed, that (iSun's) existing work-force will continue to be employed, various contracts and leases will be assumed and cured, and (iSun's) trade creditors have an ongoing business partner, thereby avoiding the resulting claims that would arise should these various things not occur," Peck said.

Clean Royalties has agreed to provide iSun with up to $4 million of "new money capital" to ensure the beleaguered company has "sufficient runway" to prepare for its sale without first collapsing. iSun will need more than $500,000 to pay its 196 employees alone before the final hearing on its bankruptcy motion, according to Peck.

Contact Dan D’Ambrosio at 660-1841 or ddambrosio@freepressmedia.com. Follow him on Twitter @DanDambrosioVT.