Under pressure from increasing debt and falling demand, U.S.-based residential solar company Sunnova Energy filed for Chapter 11 bankruptcy protection on Sunday. Earlier this month, Sunnova TEP Developer, Sunnova Energy’s subsidiary, filed a voluntary petition for relief under Chapter 11 before the United States Bankruptcy Court for the Southern District of Texas.

In May, the company’s board approved a reduction in workforce, effective May 30, 2025. It let go of approximately 718 employees (approximately 55% of the company’s workforce) to reduce the company’s operating expenses and to preserve value for stakeholders.

Sunnova had spoken about the impacted employees being paid earned wages and salary, as well as earned but unused paid time off, and a severance payment calculated in accordance with the applicable employee’s severance plan.

As of December 31, the company reported its estimated assets and liabilities to be between $10 billion and $50 billion, along with a total debt of $10.67 billion, according to a court filing.

Sunnova reported a revenue of $235.3 million in the third quarter of 2024, up 19% from $198.4 million in the corresponding quarter the previous year.

Sunnova’s bankruptcy petition is the latest in a series of clean energy companies in the U.S. and Europe going under.

Last August, SunPower and its subsidiaries filed for bankruptcy. Later in the year, battery developer and manufacturer Northvolt AB sought to restructure under Chapter 11 in the U.S. In March this year, Northvolt filed for bankruptcy in Sweden.

Sunnova was weighed down by significant liabilities, ranging from $10 billion to $50 billion, including close to $1 billion in bonds and convertible notes maturing by 2026. A sharp slowdown in residential solar demand, driven by high interest rates and reduced state-level incentives, particularly in California, significantly impacted revenues. The situation became more challenging when the U.S. Department of Energy withdrew most of a $3 billion loan guarantee. With investors pulling back and credit markets tightening, the company was unable to raise new capital.

According to E2, businesses in the U.S. have canceled or delayed over $14 billion in investments in clean energy and clean vehicle factories since January of this year, due to rising concerns surrounding the future of federal clean energy tax credits and policy.