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Sunnova Files for Bankruptcy Amid Mounting Debt and Solar Market Slowdown

Sunnova Energy, a major U.S.-based residential solar company, has filed for Chapter 11 bankruptcy protection due to overwhelming debt and a sharp decline in demand. Its subsidiary, Sunnova TEP Developer, filed a similar petition earlier in June. With estimated liabilities between $10 billion and $50 billion, including nearly $1 billion in maturing bonds and convertible notes, Sunnova struggled to stay afloat amidst tightening credit markets and a rollback of incentives.

To cut operating costs, the company laid off 718 employees—about 55% of its workforce—effective May 30, 2025. Though revenue rose to $235.3 million in Q3 2024 (up 19% YoY), the financial strain proved too severe. A key setback was the U.S. Department of Energy’s withdrawal of most of a planned $3 billion loan guarantee, which severely restricted capital access.

Sunnova's downfall adds to a troubling trend in the clean energy sector, following similar bankruptcy filings by SunPower and battery firm Northvolt AB. High interest rates, waning investor confidence, and reduced policy support—particularly at the state level in California—have created an unsustainable environment for residential solar companies. According to E2, over $14 billion in clean energy and EV factory investments in the U.S. have been postponed or canceled since January 2025 due to uncertainty around federal tax credit policies.