Sunnova’s 71% Stock Plunge Heralds US Solar’s State of ‘Chaos’

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(Bloomberg) — Sunnova Energy International Inc. shares plunged 71% as the company warned there’s substantial doubt it will remain in business. That came less than a week after First Solar Inc., the biggest US solar manufacturer, said it was seeing increasing customer delays. And it was also on the heels of Sunrun Inc., the biggest US residential solar company, saying it expects installation volumes to be flat this year. 

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The US solar industry is in the midst of the biggest reckoning it’s faced since going mainstream more than a decade ago.

Business for rooftop solar was already hurt by high interest rates and lower state incentives. Now, President Donald Trump’s moves against green energy means developers of large-scale projects are seeing new risks, including potential permitting obstacles, clouding the outlook for growth. Trump’s push to unravel former President Joe Biden’s Inflation Reduction Act is also making some investors nervous that key federal financial incentives will disappear. 

Attendees of last week’s Intersolar & Energy Storage North America conference in San Diego, one of the country’s biggest annual industry events, warned that the uncertainty gripping the industry is likely to last through much of this year, or at least until the Trump administration gives more clear signals on what’s next for policy.

“In the meantime, it will be chaos, and intentionally so,” Tom Starrs, vice president of government and public affairs at EDP Renewables, North America, said during the keynote panel at the conference. “With uncertainty comes risk, and with risk, comes a holding back of new investments.” 

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Solar had been viewed as a crucial answer for dealing with rising electric demand while capping global emissions — the industry provided the most new annual US power capacity last year and is expected to do the same for this year. But just as the world hits record after record for heat, power demand may surge the most in decades on the back of the artificial intelligence boom. Meanwhile, Trump’s administration has moved quickly to position natural gas to dominate the new electric supplies, threatening both solar’s grip on the market and the climate fight.

The residential solar sector has been the hardest hit so far. 

On Monday, Sunnova said it doesn’t have enough cash coming in to meet its obligations and is suspending guidance. The company said its management has made plans to address the risk, including refinancing debt, getting additional debt financing, cutting expenses and revising dealer payment terms. It also said it hired a financial adviser to help “manage certain aspects of debt management and refinancing efforts,” without disclosing the name.

Sunrun last week lowered its cash generation guidance for the year. 

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Sunnova shares traded down 59% to about 68 cents as of 12:28 p.m. in New York, after earlier slumping more than 70%, the most on record. Sunrun dropped as much as 7.9% on Monday. 

Analysts have been lowering their home solar installation projections in 2025 after installs fell by nearly 20% in 2024. And meanwhile, the Trump administration and Congress are considering moving to cut the tax credits that Sunnova and others have counted on to generate cash. That’s on top of a federal freeze of loans and grants that were aided by Biden’s signature climate law. 

“They’ve had the rug pulled out from under them,” said Melissa Bergsneider, an executive account manager at Allume Energy. 

Meanwhile, energy forecasts show that the US will need 128 gigawatts of new capacity by 2029 to meet high summer peak demand, First Solar Chief Executive Officer Mark Widmar said on an earnings call last week. Analysts at Wood Mackenzie, a energy research firm, forecast that even with new gas plants, unmet power demand in the US will be around 114 gigawatts by 2030, according to a presentation at Intersolar. 

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Solar leaders contend the sector is still well-suited to meet increasing power demand, especially given the industry’s ability to ramp up quickly. Large-scale nuclear plants take more than a decade to come online, while natural gas capacity could take half a decade to scale and still cost more than it did five years ago, due to supply-chain constraints and turbine shortages, Widmar said. 

But developers at the gathering also reported that they had less responsive interactions with government agencies. That can slow projects, said Jeff Osborne, a TD Cowen analyst who attended the event.

“This is rock bottom as it relates to uncertainty,” he said.

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