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PosiGen blamed federal cutbacks and new tariffs for its

decline

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Lender Brookfield has moved to foreclose on company assets

By Dietrich Knauth

NEW YORK, Nov 25 (Reuters) - Solar power company PosiGen

filed for bankruptcy in Texas late Monday, saying the Trump

administration's cuts to tax credits and subsidies for solar

power had starved the company of cash and sparked disputes with

its lenders.

PosiGen, which provided solar power to 40,000 residential

customers in 15 states, ran short of cash over the summer, and

the company ceased most operations after its lenders balked at

investing more money into a declining market for U.S. solar

power, according to court documents filed Tuesday.

The federal government's shift away from solar power has caused

many investors and lenders to pull back from the market, and it

has pushed major companies like Solar Mosaic LLC, SunPower

Corporation and Sunnova Energy International Inc into

bankruptcy.

PosiGen not only suffered from the broader decline in the

U.S. solar power market, but it also admitted to "mistakes" in

the way it had done business in the past year. The company

double-pledged some assets as collateral on more than one loan

while it sought short-term financing, and it also violated debt

contracts by commingling cash from different revenue streams,

according to its court filings.

Based in Louisiana, PosiGen focused on providing affordable

residential solar power to working-class families in the U.S.

The company did not charge customers up front for solar

installation costs, instead charging a monthly lease payment

after the system was installed. PosiGen borrowed money for

installations and it sold both tax credits and revenue streams

from the customer leases to outside investors, according to

court filings.

PosiGen said its customers had saved $45 million on their

electricity bills in 2024 alone. But the business depended on

government subsidies and tax credits for solar power, and

Republican President Donald Trump's administration has cut

renewable energy tax credits while also imposing steep tariffs

on key components of solar construction projects, according to

the company.

PosiGen has $206 million in funded debt, and its primary

lender, Brookfield Asset Management ( BAM ), had sought to foreclose on

the company's assets and transition most of PosiGen's customers

to a new solar power provider, according to court documents.

PosiGen opposed Brookfield's proposal, saying that a

court-supervised bankruptcy would buy time to complete solar

installation projects that will provide future revenue. The

bankruptcy will avoid a "slow dismemberment of the company" and

provide a better outcome for stakeholders including customers,

employees and investors who had purchased solar investment tax

credits from PosiGen, according to the company's court filings.

The case is In re PosiGen PBC et al, U.S. Bankruptcy Court for

the Southern District of Texas, No. 25-90787.

For PosiGen: Charles Koster, Thomas Lauria, Michael

Shepherd, Fan He, Andrea Kropp of White & Case LLP, among

others.

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