Residential solar companies like Sunnova are likely to suffer the brunt of the reconciliation bill passing the Senate in its present form. (Illustrative Photo; Photo Credit: Bilanol/Shutterstock.com) 
Business

Sunnova Subsidiary Files For Chapter 11 Bankruptcy Protection

Sunnova’s bankruptcy highlights mounting pressures from policy cuts, high rates for residential solar in the US

Anu Bhambhani

  • Sunnova’s subsidiary has filed for Chapter 11 with assets and liabilities of $100 million to $500 million

  • It follows the Trump administration's cancellation of the company’s $2.92 billion federal loan guarantee

  • Sunnova had earlier issued a going-concern warning, citing tax credit delays and falling demand

US residential solar installer Sunnova Energy International has filed for Chapter 11 bankruptcy protection for its subsidiary Sunnova TEP Developer in the US Bankruptcy Court for the Southern District of Texas.

According to local media reports, the company has reported $100 million to $500 million in assets and liabilities. It says that the company will have funds available for unsecured creditors. The company is considering a potential sale or restructuring. 

This comes days after the Trump administration cancelled the company’s $2.92 billion government loan guarantee, according to a Reuters report.

Sunnova had earlier issued a going-concern warning in March 2025, blaming lower tax equity contributions owing to timing delays of Investment Tax Credit (ITC) sales and fewer installed systems. It had already announced plans to cut down its workforce by 15% (see Sunnova Narrows Net Loss For FY2024; Issues Going Concern Warning).

After SunPower, Sunnova is another big residential solar company to have filed for bankruptcy protection. This market segment has been facing turbulence for a long time now, owing mainly to high interest rates that have significantly lowered the demand for residential solar (see SunPower Corporation & Subsidiaries File For Bankruptcy Protection Under Chapter 11).

Problems are not yet over for the US solar industry. If the Senate clears the One, Big, Beautiful Budget Reconciliation Bill as passed by the House, solar leasing companies will not be able to collect the ITC. This would further bring down the residential solar segment (see US House Passes Bill Threatening Clean Energy Incentives).