**Sunnova Energy Faces Dealer Opposition Amid Bankruptcy Struggles**
Sunnova Energy International Inc., a prominent player in the residential solar market, is encountering resistance from its dealers as it navigates bankruptcy proceedings and seeks to secure funding for its Chapter 11 filing. An ad-hoc group of dealers submitted an objection on Monday, arguing that a proposed $15 million asset sale of solar systems would undermine their claims. They also noted that Sunnova has not engaged in discussions with them regarding the sale’s terms, as detailed in court documents.
Sunnova, which ranks among the largest rooftop solar companies in the United States, currently lacks secured debtor-in-possession financing and has only $13.5 million in cash available, while facing nearly $9 billion in funded debt. During the initial hearing in Texas, company counsel Brian Schartz indicated that Sunnova is pursuing asset sales in smaller increments to advance its bankruptcy strategy. “We just ran out of time. We are playing a Whac-a-Mole,” Schartz remarked, highlighting the challenges the company faces.
Unlike many companies that enter bankruptcy with a restructuring support agreement and a clear plan, Sunnova’s situation is more complex. The company is in discussions for potential debtor-in-possession financing with a group of investors represented by a major law firm.
During the hearing, James Muenker, an attorney for the large dealer Power Solar LLC, raised concerns regarding funding related to a program in Puerto Rico. He inquired whether Sunnova possesses funding and grants from the U.S. Department of Energy associated with the program and if those funds would be allocated to settle vendor claims. Muenker noted, “There’s no debt financing currently, and we don’t know where the case exactly is going to go.”
Last month, Sunnova announced an agreement with the Energy Department to reduce a $3 billion partial loan guarantee to $372 million, a move that may impact its financial strategy moving forward. The case is currently being heard in the U.S. Bankruptcy Court for the Southern District of Texas.
**FAQ**
**What challenges is Sunnova Energy facing in its bankruptcy?**
Sunnova Energy is struggling to secure funding and facing objections from dealers regarding asset sales that could affect their claims, all while managing significant debt and limited cash reserves.
