Leading U.S. solar company Sunnova Energy filed for Chapter 11 bankruptcy protection on June 8, becoming just the latest industry stalwart to fall by the wayside.
What's happening?
Mosaic and SunPower also met this fate within the last year, as EnergySage detailed, prompting the question: "Will more major solar companies follow suit?"
The move was no surprise because of "an unpredictable political and regulatory landscape, high interest rates, and persistent inflation," according to the independent clean energy advocate. These factors have slowed demand for solar energy and financing, particularly among residential customers. From 2023 to 2024, Americans installed 32% fewer solar systems on their homes.
"This model thrived when interest rates were low — particularly in 2020 when the Federal Reserve slashed rates to near zero," EnergySage reported. "But as rates climbed in recent years, the cost of borrowing money skyrocketed, shrinking profit margins for solar companies reliant on financing. Sunnova, SunPower, and others found themselves caught between rising capital costs and slowing customer demand, a squeeze that led to financial distress."
Why is this important?
The platform highlighted the necessity of government policies and subsidies in the industry's development, noting California solar installations dropped by 45% after a 2023 rule reduced net metering credit values by 75%.
This move may have helped utilities, but it significantly cut residents' ability to benefit from their investments by selling energy back to the grid. Installing solar panels also lowers utility bills to or near $0 and eliminates the production of heat-trapping gases from the use of dirty energy sources. It helped to topple SunPower, too, EnergySage stated.
The high upfront cost of solar systems — about $29,000 — also means many customers take out loans to pay for the infrastructure. But with costs and interest rates rising since the coronavirus pandemic, those circumstances have become untenable.
What's being done about solar adoption?
The Trump administration's push to end Inflation Reduction Act incentives and tax breaks for clean energy investments has had a chilling effect on the solar industry and renewable energy in general, EnergySage said. Those subsidies could be gone next year with an act of Congress, but they are still available now.
EnergySage offers free services that can help you land nearly $10,000 for a solar installation. Enter basic information about your home and situation, and then compare quotes from vetted installers. It has a helpful mapping tool, too, showing state-by-state costs as well as incentive details.
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