Sunnova net losses continue to increase, Q3 customer additions down

Although the number of customers continued to rise, Sunnova incurred a net loss of US$56.5 million in Q3, up from US$32.3 million in Q3 2022. This higher net loss was due to the increase in interest expense, net of US$36.8 million and higher general and administrative expense.

In the first three quarters this year, Sunnova’s net loss was US$267.6 million, compared to a net loss of US$68.3 million in the first three quarters last year. Sunnova again attributed the increase in net loss over the nine-month period to an increase in interest expense, net of US$155.8 million and higher general and administrative expense.

Q3 adjusted EBITDA was US$40.4 million, slightly decreasing from US$41.3 million year-on-year. As for the first three months in 2023, adjusted EBITDA was US$83.0 million, down from US$93.5 million in the first three quarters in 2022. However, Sunnova reaffirmed that its adjusted EBITDA for 2023 will be between US$235 million and US$255 million.

“In Q3, Sunnova entered into a tax credit transfer transaction involving the sale of up to US$145 million in investment tax credits … under the Inflation Reduction Act (IRA). Sunnova is dedicated to shaping and supporting the growth of this nascent market,” said William Berger, founder and CEO of Sunnova.

Looking ahead, Sunnova aimed to add 185,000-195,000 new customers in 2024, with adjusted EBITDA between US$350 million and US$450 million.

Berger said Sunnova had undertaken multiple initiatives under the challenging macroeconomic conditions, including reducing working capital demands, managing operating expenses, reducing future corporate capital needs, and integrating advanced software and artificial intelligence applications to maximise operational efficiency.

Apart from measures taken by the company, Sunnova also secured funding from the US government last month, as the US Department of Energy (DOE) agreed to supply up to US$3.3 billion in loan funding, which will be used to expand its energy monitoring and analysis platforms. The loan funding, of which US$3 billion is guaranteed and will operate under a new loan channel named ‘Project Hestia’, will go towards improvements and expansions for its monitoring platforms.

Moreover, Sunnova will provide monthly servicing reports to the DOE using the data collected from its platforms, alongside information on greenhouse gas reduction derived from customers installing its solar panels.

“As we navigate this higher interest rate and lower liquidity environment, it’s essential to recognise the unique opportunity that arises from the convergence of declining solar equipment prices and the steady uptick in utility rates, creating a distinct wedge of value for our customers,” Berger said.