US to Loan $3 Billion to Sunnova’s Solar Program
Sunnova’s project to expand environment-as-a-service offerings
U.S.-based residential solar company Sunnova has received conditional approval for a partial loan guarantee of up to $3 billion from the U.S. Department of Energy’s (DOE) Loan Programs Office.
This will provide a 90% guarantee for up to $3.3 billion of financing to support Sunnova’s solar loan program, which aims to increase access for disadvantaged individuals and communities to its services by indirectly guaranteeing a portion of their loans’ cash flows.
For eligibility, each energy system must be equipped with Sunnova’s technology, which is designed to improve customer insights into their power usage and encourage demand response behavior.
The company said this strategy would expand Environment-as-a-Service (EaaS) offerings, establish a foundation for future virtual power project activities, decrease greenhouse gas emissions, and increase the demand response impact of residential power systems.
William J. Berger, Sunnova’s CEO, stated that the project would enable a significant private sector investment in energy infrastructure and disadvantaged American communities.
The financing from the U.S. government would speed up the adoption of solar and storage, reduce greenhouse gas emissions, and enhance access to dependable, clean, and reasonably priced energy for communities that benefit the most from low-cost energy.
Sunnova estimated that the loan guarantee could support loan originations worth $4-$5 billion, reduce the company’s weighted average cost of capital, and result in interest savings.
Robert Lane, Sunnova’s EVP and CFO, noted that the conditional commitment from DOE is expected to boost grid reliability, improve access to clean energy, and increase ratings and advance rates on the company’s senior bonds.
Sunnova has committed to submitting monthly servicing reports and hardware and software deployment information to the U.S. government as part of the agreement. The company has also agreed to measure the reduction in greenhouse gas emissions associated with the project.
The deal is anticipated to be finalized in the second quarter of 2023. Sunnova aims to release its first securitization under the initiative in the first half of 2023.
The company posted a net loss of $61.9 million for the fourth quarter (Q4) of 2022 compared to $31.2 million year-over-year.
The solar company attributed higher revenue was also fueled by the acquisition of SunStreet Energy Group in April 2021 and the sale of inventory to dealers or other parties.