Sunnova Closes $150 mn in Financing to Fund Growth

Sunnova Energy has closed an aggregate USD 150 million in financing with an aim to fund its continued growth in customer count and battery storage sales

Sunnova Energy International has announced that it has closed an aggregate USD 150 million in financing through an approximately USD 95 million revolving asset-based loan facility and a private placement of USD 55 million aggregate principal amount of convertible senior notes. Access to this capital will allow the firm to fund its continued growth in customer count and battery storage sales, as well as fund the purchase of inventory that it intends to use to allow related solar energy systems to qualify for a 30 percent Federal investment tax credit (ITC) by satisfying the 5 percent safe harbor method outlined in IRS notice 2018-59.

“Given strong operational momentum in the business, we now expect our 2020 customer growth to exceed expectations from even our third-quarter call in October,” said William J. Berger, chief executive officer of Sunnova. “These new debt facilities will enable us to finance the purchase of equipment, which will allow us to safe harbor the 30 percent ITC and give us access to additional working capital and asset level capital to fund our continuing growth.”

The Equipment Facility will provide just over USD 95 million of debt availability, all of which will be drawn by year-end 2019 to fund equipment purchases, with a maximum facility size of approximately USD 138 million, subject to lender consent. The Convertible Notes Private Placement provides for the issuance of USD 55 million in corporate level debt, with an option to increase to USD 75 million if all parties consent, with a high degree of repayment flexibility for the company.

“We are pleased that our unlevered asset-level returns, inclusive of all dealer payments, were not sacrificed to achieve our current growth and continue to be stable and attractive, consistent with our prior performance,” said Berger.

“This is a testament to our differentiated business model. We expect to continue the rapid growth of our industry-leading estimated net contracted customer value asset base as we maintain our focus on maximising recurring cash flows. We see battery sales and attachment rates increasing faster than previously expected as an ever-growing number of large manufacturers ramp up new energy storage product launches.”

In January last year, the firm had expanded its service in New York to give homeowners access to Sunnova SunSafe solar energy generation and home battery storage service.