Sunnova's Solar Setback: Trump Administration Scraps $2.92 Billion Loan Guarantee

The Trump administration has rescinded a partial $2.92 billion loan guarantee awarded to Sunnova Energy for its residential solar panel installations. The Department of Energy "de-obligated" the loan, relieving the federal government from any financial responsibility, as confirmed by a source close to the matter.

Initially announced under former President Joe Biden's leadership, this partial loan aimed to support financing for approximately 100,000 rooftop solar installations, especially targeting lower-income homeowners. This initiative was declared as the U.S. government's largest commitment to solar power. However, Sunnova, currently restructuring its debt, had already indicated that it did not plan to utilize the DOE's Project Hestia for the foreseeable future.

The landscape for residential solar power has faced challenges due to rising interest rates that elevate financing costs. Sunnova has engaged in selling $371 million in bonds backed by the loan guarantee from Project Hestia, though these are excluded from the company's restructuring endeavors. The competitive edge of Project Hestia waned as Sunnova leveraged better leasing options using tax credits established by Biden's 2022 Inflation Reduction Act. Any further developments within the DOE's loan program are uncertain given its political scrutiny and budget cuts.

(With inputs from agencies.)