Residential solar installer Sunnova has filed for bankruptcy and plans to sell its assets while winding down operations. The company cited challenging market conditions, including rising interest rates and inflation, which have hindered its ability to secure necessary capital.
On June 11, 2025, Sunnova, the second-largest installer of third-party owned residential solar systems by market share, announced its Chapter 11 bankruptcy filing. Despite an increase in customer numbers and revenue, the company has struggled with profit margins, leading to an inability to meet its debt obligations, as stated by President and CEO Paul Mathews in the bankruptcy documents.
In a statement following the filing, Sunnova indicated it would accept bids for its assets and operations over the next 45 days. The company plans to cease any remaining operations after the sale. Sunnova has arranged to sell some of its assets to a holding company that received $15 million in financing from ATLAS SP Partners. Additionally, it has agreed to sell assets from its new homes business unit to Lennar Homes for $16 million.
Mathews emphasized that these actions represent a crucial step toward achieving the best possible outcome for Sunnova’s stakeholders. He expressed gratitude for the dedication of the Sunnova team, highlighting the company’s innovative contributions to the power sector and its belief in the future of residential solar and storage.
According to the bankruptcy filings, Sunnova faced dire liquidity issues and anticipated running out of cash by April or May if it could not find additional financing. Efforts to secure new lenders earlier in the year were unsuccessful, partly due to uncertainties surrounding an executive order related to the Inflation Reduction Act. Although the courts have since paused the order’s implementation and restored funding under the act, the initial uncertainty made lenders hesitant to provide Sunnova with the required financing.
From 2020 to 2024, Sunnova managed to quadruple its customer base and grow revenues, but factors such as high inflation, sustained interest rates, and tariffs severely impacted its profitability. The company attempted to reduce costs by focusing on lower-risk installations, which resulted in a reduction of year-over-year net losses by over 10% by 2025. However, these changes did not compensate for the previous aggressive spending and borrowing strategy aimed at rapid growth.
By early 2025, Sunnova struggled to pay its dealer network, leading to project work stoppages by contractors and a significant decrease in incoming cash flows.
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