US residential solar installer Sunnova has recorded its best ever quarter in terms of sales, while a strong customer backlog and increased installations have helped drive revenue upwards, although its net losses have increased on last quarter.
Speaking as the installer disclosed its Q2 2022 financial results, Sunnova chief executive William J. Berger said the company recorded its “best quarter for sales in company history” which will create “a significant backlog of customers” that are set to be placed in-service before the end of the year.
The Texas-based company posted net losses of US$37 million for Q2, up from US$20 million Q1, when the company had hoped its losses were in decline. For the first half of the year, the company recorded a cumulative net loss of US$30.3 million, three times less than the US$90.3 million recorded at the end of June 2021.
At the same time, Sunnova’s revenue jumped significantly in Q2 with the company taking in an expectation-beating US$147 million, a substantial increase on the US$80.5 million it recorded in Q1, causing its stock to jump overnight on Wednesday (27 July).
In the first half of this year, the company has already doubled its revenue (US$212 million) compared to H1 2021, when it stood at US$107 million.
The increased revenue was primarily due to the increased number of residential solar systems in operation from the company, along with SunStreet’s acquisition in April 2021 and an increase in inventory sales revenue, the company said.
Furthermore, after a light dip in new customer additions during the previous quarter, Sunnova added 17,300 new customers in Q2 2022, bringing the total to 225,000 as of 30 June 2022.
“As centralised utilities continue to increase their rates, demand remains strong for our energy services while homeowners seek to offset rising energy costs and increase their energy reliability,” Berger said.
Even though the installer increased the number of customers from the previous quarters, it still fell short of the installer’s expectations due to delays in receiving permission to operate (PTO) from some utilities, Berger said during a conference call with analysts.
“While missing these targets was frustrating, investors should consider these shortfalls to be timing driven, as we still expect to hit our 2022 customer additions target with a more back-end weighting and we will ultimately still collect the principal owed to us over the terms of the solar loans,” Berger explained.
Numbers are also down year-on-year (as shown in the chart) but this is due to the more than 30,000 customers added from the SunStreet acquisition in April 2021.
Despite missing some of its targets during Q2 2022, Sunnova has maintained its guidance for 2022, expecting new customer additions of between 85,000 – 89,000 and earnings within a range of US$117 – US$137 million.
When quizzed by analysts on how the recently agreed climate bill might support Sunnova’s business, Berger said it was the “perfect” bill for the company.
“If you had to write a bill that was perfect for our company as a residential energy service provider like a Sunnova, this bill would be the perfect bill,” he said, adding that the ITC extension was crucial to the company’s operations, while the manufacturing tax credits included in the bill would ensure the domestic supply of PV modules.
Conference call transcript from Seeking Alpha.