Sunnova’s future in question

Sunnova Energy International, a residential solar installer, said its cash flow is not sufficient to meet obligations and fund operations.

With the release of year end financial results, the future of residential solar installer, Sunnova Energy International, is in question.

While customer agreements and incentives revenue increased by 43% (+$163.4 million) in 2024, solar energy system and product sales revenue decreased by 13% (-$44.1 million).

“While total cash increased, unrestricted cash remained relatively flat, below our estimated $100 million increase. This miss was primarily due to lower tax equity contributions stemming from timing delays of ITC sales, fewer installed systems, and funds received in December classified as restricted,” said John Berger, Sunnova’s founder and CEO.

These results follow the announcement earlier this month that the company was taking measures to improve cash flow, including cutting as much as 15% of its workforce. The company said the move is a reinforcement of its strategy to drive capital efficiency and reach its cash generation targets.

The report released today states that “Our unrestricted cash, cash flows from operating activities and availability and commitments under existing financing agreements are not sufficient to meet obligations and fund operations for a period of at least one year from the date we issue our consolidated financial statements without implementing additional measures to manage our working capital, secure additional tax equity investment commitments or waivers of conditions to access existing tax equity commitments, and refinance certain of our obligations.”

While the report states that “substantial doubt exists regarding our ability to continue as a going concern for a period of at least one year from the date we issue our consolidated financial statements,” it listed steps that management may take. The company stated, however, that it can “offer no assurances we will be able to successfully implement any of these plans or obtain financing at acceptable terms or at all.”

The company is public on the New York Stock Exchange under the ticker NOVA. Upon the recent financial news, shares plummeted over 50% in trading.

Potential steps

Sunnova said steps to address the conditions include:

• refinancing certain of its obligations due during the look-forward period;
• executing additional debt financing that can be used for general corporate purposes;
• reducing expenditures;
• revising dealer payment terms; and
• obtaining tax equity investment commitment that is sufficient to continue operating its business model.

The company hired a financial advisor to help manage debt management and refinancing efforts.

Sunnova held a conference call, a replay of which will be available through March 6 at (866) 813-9403 or (929) 458-6194, access code is 736946.