Timothy Gardner and Nichola Groom
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By Timothy Gardner and Nichola Groom
WASHINGTON (Reuters) -President Donald Trump's administration has canceled a partial loan guarantee of $2.92 billion that had been awarded to residential solar panel installer Sunnova Energy, the company said on Wednesday.
A source familiar with the matter said the Department of Energy had "de-obligated" the loan guarantee, meaning the federal government is not responsible for the financing. Bloomberg News first reported the move.
Sunnova, which is restructuring its debt and has warned that it may not be able to continue as a going concern, said in a regulatory filing in March that it did not intend to use the DOE facility, known as Project Hestia, for the foreseeable future.
In April 2023, former President Joe Biden's administration announced the partial loan guarantee of up to $3 billion to back financing for about 100,000 rooftop solar installations, primarily for lower-income homeowners. At the time, the Energy Department billed the facility as the largest ever U.S. government commitment to solar power.
But residential solar has struggled since then as higher interest rates have pushed up financing costs.
Sunnova, one of the biggest U.S. residential solar companies, has sold $371 million in bonds that are backed by the Project Hestia loan guarantee, according to a source, but those notes are not included in the debt that the company is seeking to restructure.
The program became less attractive to Sunnova because the company could market cheaper, leased systems to homeowners using tax credits created by former President Joe Biden's 2022 Inflation Reduction Act, a company source said. The credit for loans, which was Project Hestia's focus, is less lucrative.
The Trump administration, which is pushing to maximize oil and gas production, has said it is reviewing financing from the Department of Energy's Loan Programs Office to companies involved in alternative energy.
Under Biden, the office aimed to speed development of the clean energy sector, with loans to companies that struggled to obtain private financing.
It faces an uncertain future with job cuts implemented by Elon Musk's so-called Department of Government Efficiency and reductions to the office outlined in the House budget bill.
The loans office since 2009 has issued more than $35 billion in loans and loan guarantees and been paid back by companies, including Musk's Tesla. But it has also been a target for Republicans since 2011 over a $535 million loan to Solyndra, a failed solar company.
