Sunnova subsidiary files for bankruptcy protection

The residential solar company has been in a downturn for more than a year, with earnings misses, layoffs, changes in leadership and cancellation of a $3 billion loan guarantee.

Sunnova TEP Developer, a residential solar and energy storage developer, and subsidiary of Sunnova, filed for Chapter 11 protection in the U.S. Bankruptcy Court for the Southern District of Texas.

The company reported $100 million to $500 million in both assets and liabilities and indicates that there will be funds available for distribution to unsecured creditors. Sunnova’s shares were down nearly 9% at the close of trading on June 2.

Sunnova has been in a downturn for more than a year, and announced it was laying off 15% of its workforce in February 2024. Three months ago the company’s future was in question following the company’s fourth quarter earnings and announcement that its cash flow was not sufficient to meet obligations and fund operations.

A week later its CEO stepped down and Paul Mathews was named new president and CEO. Soon thereafter, Oaktree Capital Management, a global investment firm, bought roughly $400 million of Sunnova’s $8.5 billion in debt .

The latest blow came when the Department of Energy (DOE) reportedly terminated a $3 billion loan guarantee awarded to Sunnova Energy, a residential energy-as-a-service provider. The partial loan guarantee agreement made by the DOE’s Loan Programs Office in September 2023 was intended to support loans originated by Sunnova under its Project Hestia.