Sunnova files for bankruptcy on residential solar woes
The logo of Sunnova Energy International Inc. is displayed on screens during the company's IPO on the floor of the New York Stock Exchange (NYSE) in New York, U.S., July 25, 2019. REUTERS/Brendan McDermid/File Photo
Sunnova Energy said on Sunday it had filed for Chapter 11 bankruptcy protection in the United States, as the residential solar panel installer buckled under the pressure of mounting debt and weakening demand.
Sunnova is the second residential solar company to file for bankruptcy this month, reflecting the challenges faced by the industry as it struggles to cope with higher interest rates, an incentive cut in top market California and fears of subsidy rollbacks.
Last week, privately held Solar Mosaic filed for bankruptcy protection, while industry pioneer SunPower collapsed a year back.
On Monday, Sunnova said it had entered into agreements with Atlas SP Partners and Lennar Homes under which it would sell certain assets to each company for a value of $15 million and $16 million respectively, pending court approval. The company will continue its regular operations throughout the sale process.
Sunnova filed for protection in the Bankruptcy Court for the Southern District of Texas after warning in March that it might not be able to continue as a going concern.
The company listed its estimated assets and liabilities in the range of $10 billion to $50 billion and had a total debt of $10.67 billion as of December 31, according to a court filing.
Sunnova said last week it would lay off about 55% of its workforce, or 718 employees, in a bid to cut spending.
Earlier this month, its unit, Sunnova TEP Developer, had also filed for Chapter 11 bankruptcy protection.
President Donald Trump's administration, which is pushing to maximise oil and gas production, cancelled a partial loan guarantee of $2.92 billion last month that was awarded to Sunnova by the Biden administration.
Companies that put solar panels on U.S. homes said last month that a Republican budget bill that has advanced in Congress could deal a massive blow to the industry by eliminating a generous subsidy for homeowners that had buttressed the industry's growth.
"Depending on what happens with the tax bill in Congress, the conditions in this market may become even worse in 2026, because Congress is considering ending the tax credit for residential solar," Raymond James analyst Pavel Molchanov said. - Reuters
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