WASHINGTON: The administration of President Donald Trump has revoked a $2.92 billion partial loan guarantee that was granted to the residential solar panel installer Sunnova Energy (NOVA.N), the firm announced on Wednesday. An insider aware of the situation mentioned that the Department of Energy had "de-obligated" the loan guarantee, indicating that the federal government is no longer liable for the funding. The action was initially reported by Bloomberg News. Sunnova, currently restructuring its debt and cautioning about its ability to remain a going concern, stated in a regulatory filing in March that it does not plan to utilize the DOE facility, referred to as Project Hestia, in the near term.
In April 2023, the administration of former President Joe Biden revealed a partial loan guarantee of up to $3 billion to support funding for nearly 100,000 rooftop solar setups, mainly aimed at lower-income homeowners. At that moment, the Energy Department promoted the facility as the largest commitment to solar energy from the U.S. government ever. However, residential solar has faced challenges since that time, as increased interest rates have raised financing expenses. Sunnova, a major residential solar company in the U.S., has issued $371 million in bonds supported by the Project Hestia loan guarantee, as stated by a source, but these notes are excluded from the debt the firm intends to restructure.
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A company source stated that the program lost its appeal for Sunnova as the company could promote more affordable leased systems to homeowners by utilizing tax credits established by former President Joe Biden's 2022 Inflation Reduction Act. The loans associated with Project Hestia, which was its main focus, are not as profitable. The Trump administration, which aims to enhance oil and gas output, has indicated it is assessing funding from the Department of Energy's Loan Programs Office to firms engaged in renewable energy. Under Biden, the office sought to accelerate the growth of the clean energy industry, providing loans to firms that faced difficulties in securing private funding.
It confronts an unpredictable future due to layoffs initiated by Elon Musk's so-called Department of Government Efficiency and budget cuts detailed in the House spending proposal. Since 2009, the loans office has provided over $35 billion in loans and loan guarantees, with repayments coming from companies such as Musk's Tesla. However, it has also been a focus for Republicans since 2011 due to a $535 million loan granted to Solyndra, a bankrupt solar firm. The Department of Energy didn't respond right away to a request for a comment.
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