Sunnova Energy International: S.D. Tex. Case 25-90160 363 Sale

Sunnova Energy International Inc., the second-largest installer of third-party owned residential solar systems in the United States, filed for chapter 11 bankruptcy on June 9, 2025. The Houston-based company served over 500,000 customers and secured a $3 billion Department of Energy loan guarantee described as the federal government's single largest commitment ever to solar energy. Rising interest rates, policy changes in California, the Trump Administration's termination of that DOE loan, and an industry-wide decline in residential solar installations preceded the filing, as Sunnova reported approximately $8.9 billion in long-term debt and $13.5 million in cash. Through a 155-day restructuring, an ad hoc group of the company's bondholders formed Solaris Assets, LLC—backed by affiliates of GoodFinch Management—and acquired substantially all of Sunnova's assets for approximately $118 million, with operations transitioning to SunStrong Management. The filing followed SunPower's August 2024 bankruptcy and coincided with Mosaic's chapter 11 case.

Debtor(s)	Sunnova Energy International Inc.
Court	U.S. Bankruptcy Court, Southern District of Texas (Houston Division)
Case Number	25-90160 (jointly administered)
Judge	Hon. Christopher M. Lopez
Petition Date	June 9, 2025
Plan Type	Third Amended Joint Chapter 11 Plan
Confirmation Date	November 12, 2025
Effective Date	November 14, 2025
Total Debt (2024)	~$10.67 billion
Long-Term Debt	~$8.9 billion
Cash at Filing	~$13.5 million
DOE Loan Guarantee (Terminated)	$3 billion
DIP Facility	$90 million
Claims Agent	Kroll Restructuring Administration LLC
Buyer	Solaris Assets, LLC
Transaction Value	~$118 million
Solar Customers Acquired	500,000+

From Enron to Energy-as-a-Service: Building a Residential Solar Company

Sunnova Energy was founded in Houston in 2012 by William (John) Berger, a veteran of the power industry whose career began as an analyst for Enron Corp. in 1996 before rising to director at Enron Energy Services. After Enron's bankruptcy, Berger brought his energy sector experience to co-founding Standard Renewable Energy (SRE) and later SunCap Financial, positioning himself at the intersection of power generation and consumer finance. Armed with a civil engineering degree from Texas A&M (cum laude) and an MBA from Harvard Business School (2003), Berger designed Sunnova around the "energy as a service" (EaaS) concept, allowing homeowners to use solar leases and power purchase agreements (PPAs) with little to no upfront costs. Customers paid for the energy their systems produced rather than purchasing equipment.

Rapid expansion and public markets. The EaaS model supported Sunnova's growth. By July 2019, the company went public on the New York Stock Exchange under ticker symbol NOVA, raising approximately $170 million in its initial public offering. Sunnova positioned itself as more than an installer—the company operated as a residential solar services platform, owning and maintaining the systems on customer rooftops while collecting long-term revenue streams from lease payments and PPAs. This asset-heavy approach required substantial capital investment and provided recurring revenue over 20-25 year customer contracts. By the time of its bankruptcy filing, Sunnova had accumulated a portfolio spanning 4 GW of distributed generation and storage assets across the United States and was the second-largest installer of third-party owned residential solar installations in the U.S.

Business model complexity. Sunnova's operations required financing arrangements. The company securitized solar loan portfolios, maintained warehouse credit facilities, and executed tax equity transactions to monetize investment tax credits. Each customer installation required equipment procurement, local installation contractor coordination, permit acquisition, utility interconnection, and ongoing system monitoring and maintenance. The company owned and maintained assets on customer rooftops while servicing leases and PPAs.

Project Hestia: The DOE Loan Guarantee

In September 2023, the Department of Energy's Loan Programs Office provided Sunnova with a partial loan guarantee agreement guaranteeing up to 90% of $3.3 billion in term loans under a program dubbed "Project Hestia." The arrangement was described as the federal government's single largest commitment ever to solar energy and was designed to support deployment of 568 MW of solar and storage capacity while expanding distributed energy resources to disadvantaged communities.

The termination. On May 28, 2025, the Trump Administration terminated the $3 billion loan guarantee after Sunnova contacted the Energy Department to initiate cancellation. Approximately $2.9 billion in funds were formally "de-obligated" back to the federal government, with a subsequent DOE amendment reducing the maximum aggregate guarantee from $3 billion to $371.6 million, reflecting partial guarantees previously issued for two solar loan asset-backed securities transactions under Project Hestia.

The Path to Bankruptcy: Industry Conditions and Capital Structure

Sunnova faced sector-wide challenges and company-specific pressures. While the company's customer base and revenue continued to grow through late 2024, rising interest rates, inflation, and tariffs eroded profit margins, and the company was unable to pay its debts despite growth.

California's NEM 3.0 changes. When California's Net Energy Metering 3.0 (NEM 3.0) took effect in April 2023, it reduced net metering credit values by approximately 75%. The policy shift coincided with a 45% decline in California residential solar installations between 2023 and 2024.

Rising interest rates and the financing model. Residential solar in the United States depends heavily on financing—most homeowners adopt solar through loans, leases, or PPAs rather than outright purchases. The EaaS model required matching long-term customer payment streams against upfront capital outlays. By late 2024, high interest rates made it costly for homeowners to finance solar panels, with sometimes up to one-third of customer payments going toward interest rather than the solar system itself. By the end of 2024, Sunnova's total debt had reached approximately $10.67 billion.

Industry-wide installation decline. The residential solar industry experienced six consecutive quarters of year-over-year decline in new installations, with the first quarter of 2025 showing a 13% year-over-year drop. Nationwide, residential solar installations declined 31% in 2024.

The going concern warning. In March 2025, Sunnova warned investors it might not have enough money to continue as a going concern. At the same time, founder John Berger resigned as CEO, with Paul Mathews assuming the president and chief executive role. Sunnova laid off more than 700 employees—over 55% of its workforce—ahead of the filing, and its stock was delisted from the New York Stock Exchange with trading suspended immediately upon the bankruptcy announcement. The company entered chapter 11 with liabilities ranging from $10 billion to $50 billion according to its schedules.

Chapter 11 Case: Structured Sale Process

Sunnova entered chapter 11 with pre-arranged asset purchase agreements and a timeline for an expedited sale process while continuing operations for the assets being sold.

Filing and First Day Relief

A subsidiary—Sunnova TEP Developer, LLC—filed its own petition on June 1, 2025, followed by the main chapter 11 petitions for Sunnova Energy International Inc. and affiliated debtors on June 9, 2025. The cases were assigned to Judge Christopher M. Lopez in the U.S. Bankruptcy Court for the Southern District of Texas (Houston) and jointly administered under Case No. 25-90160. First day declarations by CEO Paul Mathews and Chief Restructuring Officer Ryan Omohundro detailed the company's financial condition and the circumstances of the filing. The court granted complex chapter 11 case treatment and approved Kroll Restructuring Administration LLC as claims and noticing agent.

DIP Financing from Bondholders

The debtor-in-possession financing arrangement was provided by an ad hoc group of the company's corporate bondholders, with Domus (US) LLC as DIP agent. Court filings indicate the debtors initially pursued a $70-$100 million DIP to fund an approximately 45-day sale process, with the ad hoc group pivoting to a DIP-backed credit bid strategy. The bankruptcy court granted interim approval on June 13, 2025, allowing immediate access to $15 million of DIP funds to support operations during the sale process. The DIP carried superpriority administrative expense claim status and first-priority liens on DIP collateral.

Initial Asset Sales

Sunnova moved to sell discrete asset packages. On June 11, 2025, the court approved a $15 million sale of eligible systems assets to Atlas SP Partners, which coordinated with warehouse lenders who had claims against specific solar loan portfolios. The following day, the court approved a $16 million sale of the company's "New Homes" solar business to Lennar Homes, LLC. Combined, these initial sales generated $31 million in proceeds.

Stalking Horse Sale and Auction Process

The bidding procedures motion filed June 12, 2025, established a framework for marketing Sunnova's remaining asset base, including the core residential solar servicing platform and the generation and storage portfolio. The process contemplated accepting bids for 45 days following the filing. On July 31, 2025, the court entered the stalking horse sale order, establishing the baseline bid for the auction process.

Solaris Acquisition: DIP Lenders Acquire Assets

On September 4, 2025, Solaris Assets, LLC completed its acquisition of substantially all of Sunnova's assets and business operations. Solaris was formed by the Ad Hoc Group of DIP financing lenders and affiliates controlled by GoodFinch Management, LLC to acquire and operate the Sunnova portfolio.

SunStrong Integration

To operate the acquired portfolio, Solaris retained SunStrong Management, LLC as asset manager. SunStrong had previously acquired legacy SunPower assets in 2024. The Sunnova integration expanded SunStrong's managed portfolio to over 500,000 solar customers and 4 GW of distributed generation and storage assets, making SunStrong one of the largest residential solar asset managers in the United States. Former Sunnova CEO Paul Mathews joined SunStrong as Chief Revenue Officer following the acquisition. For Sunnova customers, service continued under the SunStrong platform, with the new operator assuming responsibility for ongoing monitoring, maintenance, and customer service functions.

Plan Confirmation: Completing the Restructuring

While the asset sale closed in early September 2025, the formal chapter 11 plan process continued through the fall to address remaining claims, professional fees, and administrative matters.

Plan Evolution

The debtors filed their initial plan and disclosure statement on August 14, 2025. The plan was amended multiple times before confirmation:

Confirmation and Effective Date

On November 12, 2025, Judge Lopez entered the confirmation order approving the Third Amended Joint Chapter 11 Plan. The effective date occurred two days later on November 14, 2025, consummating the plan and completing the formal restructuring process. The timeline from petition to confirmation was about 155 days. Following the effective date, Sunnova ceased independent operations, with the company's financial restructuring website directing customers to SunStrong for ongoing service.

Consumer Disputes in Residential Solar Bankruptcy

The Sunnova docket included adversary proceedings filed by homeowners and consumers challenging aspects of their solar agreements.

The adversary proceedings centered on several categories of disputes. Homeowners challenged the validity of UCC financing statement filings that encumbered their properties, arguing that liens should be released or declared invalid. Other complaints alleged false pretenses or misrepresentation in connection with solar installation agreements—claims framed under section 523(a)(2) as potentially nondischargeable. Additional proceedings sought recovery of money or property from the debtors, reflecting disputes over payments, deposits, or performance obligations. The debtors filed multiple motions to dismiss these adversary proceedings, arguing that the claims should be resolved through the claims process rather than individual litigation.

Professional Retentions and Fees

The Sunnova case involved multiple retained professionals across several disciplines.

Debtor Professionals

Kirkland & Ellis served as lead bankruptcy counsel. Bracewell LLP provided local counsel services given the Texas venue. Alvarez & Marsal supplied Ryan Omohundro as Chief Restructuring Officer and provided ongoing financial advisory services. Moelis & Company handled investment banking responsibilities, including marketing the asset sale and managing the bidding process. Kobre & Kim served as special counsel.

Committee Professionals

The official committee of unsecured creditors retained Willkie Farr & Gallagher as lead counsel, with Blank Rome providing local Texas representation and Berkeley Research Group serving as financial advisor. These professionals represented the interests of unsecured creditors in negotiations over plan treatment and distribution priorities.

Fee Applications

Final fee applications were filed in December 2025 as the case moved toward conclusion. Kirkland & Ellis International LLP, Bracewell LLP, Kobre & Kim LLP, and Alvarez & Marsal each submitted applications for court approval. Moelis & Company's fee application was approved separately.

Industry Context: Residential Solar

Sunnova's bankruptcy followed SunPower's August 2024 filing and coincided with Mosaic's chapter 11 case.

SunPower's August 2024 bankruptcy. SunPower filed for bankruptcy in August 2024.

Mosaic's concurrent filing. Mosaic filed for chapter 11 at approximately the same time as Sunnova and had originated more than $13 billion in solar loans for 360,000+ homes. Mosaic announced it would pause new loan activity and stop milestone payments to installers beginning May 27, 2025, received $45 million in DIP financing (including $15 million in new money), and was acquired by Solar Servicing LLC in September 2025.

Industry data. The residential solar industry experienced six consecutive quarters of year-over-year decline in new installations, with the first quarter of 2025 showing a 13% year-over-year drop. Nationwide, residential solar installations declined 31% in 2024. House reconciliation legislation proposed terminating the 30% investment tax credit for household solar installations at the end of 2025, which would make solar installations approximately one-third more expensive for consumers.

Key Timeline

Frequently Asked Questions

When did Sunnova file for bankruptcy?

Sunnova Energy International Inc. filed for chapter 11 bankruptcy on June 9, 2025, in the U.S. Bankruptcy Court for the Southern District of Texas (Houston). A subsidiary, Sunnova TEP Developer, LLC, had filed a separate petition on June 1, 2025. The cases were jointly administered under Case No. 25-90160 before Judge Christopher M. Lopez.

What caused Sunnova's bankruptcy?

Multiple factors contributed to the filing: rising interest rates; California's NEM 3.0 policy that reduced net metering credits by 75% and coincided with a 45% decline in California installations; the Trump Administration's termination of Sunnova's $3 billion DOE loan guarantee; and an industry-wide decline in residential solar installations (down 31% in 2024). The company entered bankruptcy with $10.67 billion in total debt, $8.9 billion in long-term debt, and $13.5 million in cash.

What was Project Hestia?

Project Hestia was a Department of Energy Loan Programs Office initiative that provided Sunnova with a partial loan guarantee for up to 90% of $3.3 billion in term loans. Announced in September 2023, it was billed as the federal government's single largest commitment ever to solar energy and was designed to support deployment of 568 MW of solar and storage capacity while expanding access to disadvantaged communities. The program was terminated in May 2025 after Sunnova notified the DOE it would not draw additional funds.

Who bought Sunnova's assets?

Solaris Assets, LLC—formed by the Ad Hoc Group of DIP financing lenders and affiliates controlled by GoodFinch Management—acquired substantially all of Sunnova's assets for approximately $118 million. The transaction included a credit bid of the DIP financing, $25 million in cash consideration, and payment of certain cure costs. Solaris retained SunStrong Management, LLC to operate the acquired portfolio.

What happened to Sunnova's customers?

Sunnova's customer systems continue to receive service from SunStrong Management, LLC, which was retained by Solaris to manage the acquired portfolio. The integration expanded SunStrong's managed assets to over 500,000 solar customers and 4 GW of distributed generation and storage capacity. Former Sunnova CEO Paul Mathews joined SunStrong as Chief Revenue Officer. Customers continued to receive monitoring, maintenance, and support services.

How large was Sunnova's debt load?

By the end of 2024, Sunnova's total debt had reached approximately $10.67 billion, including approximately $8.9 billion in long-term debt. The company's bankruptcy schedules listed liabilities ranging from $10 billion to $50 billion. At filing, the company held approximately $13.5 million in cash.

Why did homeowners file adversary proceedings?

The case included at least five adversary proceedings filed by consumers and homeowners. These disputes involved challenges to UCC financing statement filings that encumbered properties, allegations of false pretenses or misrepresentation in solar sales agreements, and claims for recovery of money or property.

How long did the bankruptcy take?

The case proceeded from petition (June 9, 2025) to confirmation (November 12, 2025) in approximately 155 days. The effective date occurred on November 14, 2025.

What happened to Sunnova's employees?

Prior to filing, Sunnova laid off more than 700 employees—over 55% of its workforce. Former CEO Paul Mathews joined SunStrong as Chief Revenue Officer.

What does Sunnova's failure mean for residential solar?

Sunnova's bankruptcy followed SunPower's August 2024 bankruptcy and coincided with Mosaic's chapter 11 case. The industry experienced six consecutive quarters of year-over-year installation decline, and residential solar installations declined 31% in 2024. House reconciliation legislation proposed terminating the 30% investment tax credit for household solar installations at the end of 2025.

Who is the claims agent for Sunnova Energy?

Kroll Restructuring Administration LLC serves as the claims and noticing agent. The firm maintains the official claims register and distributes case notifications to creditors and parties in interest.

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