Sunnova has gone against the tide of US residential solar players shelving full-year guidance in the face of the COVID-19 crisis, predicting its business model makes prior targets deliverable.
On Thursday, the Houston-headquartered firm said it still expects to reach adjusted EBITDA of US$58-62 million and add 28,000-30,000 new customers by the end of the year, retaining guidance it had first put forward in late February.
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As part of a new update, Sunnova posted solar installs of 53.5MW for Q1 2020, split between leases (12.3MW), PPAs (28MW) and loans (13.2MW). The quarterly total is the highest in company records going back to Q2 2017, and exceeds its 25.6MW-46.1MW roll-out rates every quarter last year.
The firm linked its faith in its ability to meet pre-pandemic guidance with its “large backlog” of finalised systems. CEO William J. Berger also pointed at the efforts by Sunnova’s dealers to liaise with relevant authorities, which made it possible to meet its April in-service target.
“Our business model continues to provide excellent visibility into future cash flows,” Berger said. “This visibility is reflected in the fact 91% of the mid-point of our 2020 targeted revenue and principal and interest from solar loans is locked in through existing customers as of May 1, 2020.”
Sunnova quarterly installs in 2019 and so far this year
| Q1 2019 | Q2 2019 | Q3 2019 | Q4 2019 | Q1 2020 | All-time cumulative (as of 31 March 2020) | |
|---|---|---|---|---|---|---|
| Leases | 6.5MW | 7MW | 8.6MW | 9.8MW | 12.3MW | 203.5MW |
| PPAs | 11.7MW | 17.2MW | 22MW | 24.5MW | 28MW | 328MW |
| Loans | 7.4MW | 7.7MW | 8.5MW | 11.8MW | 13.2MW | 94.1MW |
| Total MW | 25.6MW | 31.9MW | 39.1MW | 46.1MW | 53.5MW | 625.6MW |
Source: Sunnova
Appetite for storage offering as debt, losses pile up
But Sunnova’s bullish talk came as its update painted a firm still deep in the red. The US$77 million in net losses now posted in Q1 2020 is more than half the US$133.4 million the group lost over the whole of 2019, and doubles the US$35.5 million net loss figure of Q1 2019.
Sunnova claimed to have served more customers over the year’s first quarter than in Q1 2019, fuelling a US$3.1 million rise of revenues to US$29.8 million. For its part, adjusted EBITDA dipped between Q1 2019 (US$8.1 million) and Q1 2020 (US$6.2 million).
With net long-term debt growing US$1.3 billion to US$1.5 billion over the quarter, Sunnova sought this week to underscore its “ample” liquidity levels. The firm, holding US$169.2 million in cash as of 31 March 2020, has raised or is looking to raise further funds via a new facility (US$130 million) and private exchanges (US$55 million).
The update shows Sunnova succeeded in enlarging its customer base from 78,600 to 85,400 over Q1 2020. The firm pointed at the appetite for its SunSafe solar-plus-storage offering among households facing “economic hardship”, adding that attachment rates for its storage systems jumped to 30% over the year’s first quarter.
How the financial community will respond to Sunnova’s restated full-year guidance remains to be seen. Performance of the firm’s shares at the New York Stock Exchange has been mixed since its IPO in July 2019, which yielded the residential installer US$170 million (US$11.25 per share) where US$365 million (US$18 per share) had initially been expected.
Sunnova will be facing analyst questions at a conference call later on Friday. Follow the link ahead to register
PV Tech has set up a dedicated tracker to map out how the COVID-19 pandemic is disrupting solar supply chains worldwide. You can read the latest updates here.
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