NC solar company blames partner for safety devices that blew up, costing it millions
Pink Energy is seeing red.
The Charlotte-area solar energy company claims that over the past year, it has been swamped with thousands of customer complaints and lost tens of millions of dollars due to the continuing blowback from defective components produced by its former business partner, Generac Power Systems Inc.
In several instances, a Generac-built device designed to control potentially dangerous power surges into residential solar units that had been built and installed by Pink Energy of Mooresville caused fires at several homes.
In early August, Pink Energy, formerly known as Power Home Solar, sued Wisconsin-based Generac in Virginia federal court, alleging negligence, breach of contract, fraudulent inducement and a host of other claims.
Pink Energy opened in 2014 and now serves 35,000 residential solar customers in 16 states, including some 5,700 homes in North Carolina. For most of its history, the company ranked high in both growth and customer satisfaction, its lawsuit claims.
That all changed in 2020 when the two companies agreed that Generac would begin providing key components for Pink Energy’s residential solar units.
The economic impact from that decision appears to have been immediate and profound. In its 35-page federal complaint, Pink Energy says its $1 billion-plus valuation from September 2021 has plummeted by more than half.
The company also says it finds itself in the path of a tsunami of “social media outrage” that has overwhelmed its ability to respond, and has now swelled to include personal attacks on its executives and their families.
“Pink Energy scams people with lies,” a customer wrote to the Better Business Bureau this month, one of more than 1,100 complaints lodged against the Mooresville company on the BBB website. “ This company and several of it workers ... will pay a heavy price when it’s all said and done.”
Pink Energy says the blame is misplaced.
“One of the most regrettable realities of this entire situation is that our valuable customers blamed Pink Energy ... rather than Generac,” company CEO Jayson Waller said in an internal letter to employees that was leaked online, according to pv magazine USA, which reported the lawsuit.
In a statement to The Charlotte Observer on Thursday, Generac, perhaps best known for its line of home generators, said it was disappointed by the allegations in the complaint but remains “confident in the safety of its products.”
“We have taken notice of recent news reports and articles citing customer concerns with Pink Energy’s marketing practices and service support,” the statement said. “We expect all our independent dealers and distributors to act with integrity and meet high standards in providing customer services and proper product installation.”
“... As a company, we stand behind our products and will continue to honor our customer commitments. ... We will be reviewing the matter and intend on vigorously defending ourselves.”
Lawsuit: Faulty switch behind fires
At issue: the reliability of the Generac-produced parts for Pink Energy’s home solar units; in particular, a small tube-like safety component known as the SnapRS.
When it works properly, the switch quickly cuts off electricity to individual solar panels in case of lightning strikes or power surges. According to the lawsuit, however, a significant number of the devices either melted or exploded, causing fires at the homes of Pink Energy solar customers in Ohio, Virginia and South Carolina.
Generac told Pink Energy that the breakdowns were unprecedented, or at worst, isolated cases, according to the complaint.
But the lawsuit alleges that at least one other solar company using the Generac-supplied parts told Pink Energy last year it, too, was experiencing a “very high rate” of SnapRS failures and had “not gotten much of a response” from Generac when it raised concerns.
Generac’s supposed fix — a next-generation replacement SnapRS — instead contained some of the identical flaws, which the lawsuit claims Generac intentionally concealed.
When Generac announced it had successfully built a “firmware update” to quickly identify defective parts, the upgrade never reached the large segment of Pink Energy’s customers whose solar units were not connected to the internet, the lawsuit claims.
Worse still, the firmware, once it identified a problem, locked down the solar unit until the problem was fixed. That further infuriated homeowners who were not getting the power savings they’d been promised by Pink Energy, and it required the company to spend even more time and money answering and servicing customer complaints rather than growing new business, the lawsuit claims.
According to the lawsuit, in late 2021 into early 2022, customer complaint calls to Pink Energy, which averaged 800 a month, rose to 30,000.
Despite signing an agreement that it would take lead on addressing problems caused by its defective parts, Generac allowed Pink Energy to take the biggest blow, the lawsuit claims. Pink Energy has billed Generac $39 millions in service calls and other costs directly related to the malfunctions but has not been paid.
Pink Energy filed its complaint in the Virginia federal courts because many of its customer problems occurred in Lynchburg and other western parts of the state.
The lawsuit calls for a jury trial as well as punitive damages in response to Generac’s “willful, wanton and reckless” conduct.
On a brighter note, the Better Business Bureau has restored Pink Energy’s A+ rating, which because of the customer complaints had been listed as NR since May, a Pink Energy spokesman said.
“Pink Energy recently terminated their relationship with Generac, a key supplier of batteries and components for their solar installations,” the BBB website noted.
“BBB believes that this step is addressing the product quality issues.”
This story was originally published August 31, 2022 at 6:00 AM.
