Sunnova, once a leading light in the US solar industry, is poised to file for bankruptcy protection, marking a dramatic fall for a company that once dominated the residential solar sector. The move would make it the second major US solar giant to collapse in recent years, following the demise of SunPower.
Founded in 2012 and listed on the NYSE in 2019 with a peak valuation of $6bn, Sunnova specialised in residential solar solutions: designing, installing and maintaining rooftop systems, often paired with battery storage. Unlike manufacturers, its model mirrored that of Chinese distributed solar operators, focusing on installation and maintenance services rather than manufacturing. This low-capital, high-volume approach aimed to overcome the US market’s biggest hurdle: high upfront costs. A typical 7.5kW residential system cost $20,000-$45,000 (Forbes), so Sunnova offered free installations in exchange for 20-year power purchase agreements (PPAs), funded by securitising its solar asset portfolio to raise capital.
The 2022 Inflation Reduction Act (IRA) turbocharged growth. By packaging transferable 30% tax credits into sellable financial products, Sunnova attracted tech investors and scaled rapidly. Revenue soared from $132m in 2019 to $840m in 2024, with 444,000 customers across 50 states and 3GW of capacity under management – making it a residential solar titan.
But profitability eluded Sunnova. Cumulative losses from 2019 to 2024 exceeded $1.5 billion, with a loss of $448 million in 2024 alone. Three crises proved fatal:
Rising US interest rates choked off cheap capital for its asset securitisation model.
Falling solar interconnection prices undermined future revenue projections.
Increased tariffs on imported panels drove up installation costs.
In February 2025, the company laid off nearly 300 employees, about 15% of its workforce, in a bid to cut annual cash expenses by $35 million. The move, part of a wider cost-cutting strategy, followed months of financial strain but failed to address the underlying causes of the company’s decline.
In March 2025, the company warned that it would run out of cash within a year, citing ‘macroeconomic and political pressures’. The announcement triggered a 64% crash in a single day, with shares plunging to $0.209 by 12 May, valuing the company at just $26.24 million, a fraction of its former glory.
