Firebase cannot communicate with Firebase Server

I am using Firebase PhoneAuth and getting the following error.

Firebase Installations can not communicate with Firebase server APIs due to invalid configuration. Please update your Firebase initialization process and set valid Firebase options (API key, Project ID, Application ID) when initializing Firebase.

W/Firebase-Installations: Error when communicating with the Firebase Installations server API. HTTP response: [400 Bad Request: {
  "error": {
    "code": 400,
    "message": "API key not valid. Please pass a valid API key.",
    "status": "INVALID_ARGUMENT",
    "details": [
      {
        "@type": "type.googleapis.com/google.rpc.Help",
        "links": [
          {
            "description": "Google developers console",
            "url": "https://console.developers.google.com"
          }
        ]
      }
    ]
  }
}
]

Solution

Background

The error says that the API key you use when initializing Firebase is not accepted by Google. You might in fact be using an invalid API key or Google might incorrectly identify your API key as invalid. The latter can happen if your API key has not been used in a long time.

FirebaseInstallations is new infrastructure for Firebase services that makes use of the API key you use when initializing Firebase. If you recently updated your Firebase SDKs, FirebaseInstallations might have started using your API key which was not used before.

Remedy

If you have issues with your current API key, you can create a new API key in the Cloud Console:

go to the Google Cloud Console
choose the relevant project (i.e. the project you use for your application)
open the menu and go to APIs & Services → Credentials
on top of the page click on + CREATE CREDENTIALS → API key
replace the API key in your application with the newly created API key

google-services.json

In case you are using the google-services.json config file from your Firebase Console, you first have to delete or restrict the API key used in your current google-services.json in order to make Firebase update config file and use a new API key.

Identify the API key in your google-services.json config file.
Confirm that the API key is creating the erroneous requests by checking its usage against the Firebase Installations API metrics page. The column Usage with this service of your API key should show a number greater than 0.
Delete that API key by clicking the bin symbol or add Application restrictions to that API key by clicking the pencil symbol. !!Warning!! Do not delete an API key that existing installations of your applications require for other Firebase services like Firebase Auth or Realtime-Database.

Wait a couple of minutes for Google servers to update. The next download of your google-service.json config file should contain a new API key.

Links

Other relevant links regarding API keys and the Firebase Installations API: