Sunnova files for Chapter 11 to facilitate sale process

August 2025 | DEALFRONT | BANKRUPTCY & CORPORATE RESTRUCTURING

Financier Worldwide Magazine

August 2025 Issue

Amid mounting debt and declining demand, US energy company Sunnova Energy, along with several of its subsidiaries, has voluntarily filed for Chapter 11 bankruptcy protection.

The filing will enable the Houston-based company to initiate a sale process for certain assets and business operations. During this period, Sunnova intends to continue operating in the ordinary course of business.

Sunnova, an industry-leading adaptive energy services provider, focuses on making clean energy more accessible, reliable and affordable for homeowners and businesses. Through its adaptive energy platform, the company aims to deliver superior energy services at competitive prices, advancing its mission of powering energy independence.

It is the second residential solar company to file for bankruptcy in recent months, following the privately held Solar Mosaic. The filings highlight the challenges facing the sector, including rising interest rates, reduced incentives in key markets such as California and concerns over potential subsidy rollbacks.

To maximise value for all stakeholders, Sunnova will conduct a court-supervised sale process to attract the highest or most favourable bid for its assets. The company expects to complete the marketing and sale process within approximately 45 days, allowing interested parties to submit competing offers.

“The Chapter 11 filing is a critical step toward securing a value-maximising outcome for Sunnova’s stakeholders,” said Paul Mathews, chief executive of Sunnova. “Throughout this process, maintaining continuity of service for our customers is our top priority as we work to secure a long-term solution for our business operations under new ownership.”

Sunnova plans to continue monitoring, managing and servicing solar and storage systems as usual during the sale process. The company also intends to communicate directly with customers regarding any material changes that may affect the service and support it provides.

Sunnova has announced agreements with Atlas SP Partners and Lennar Homes to sell certain assets for $15m and $16m respectively, subject to court approval.

Proceeds from these asset purchase agreements, along with existing cash reserves, will be used to support core operations during the initial phase of the Chapter 11 process, while the company works to secure additional capital.

The company has also obtained interim relief to continue honouring its obligations under loan agreements, lease agreements, power purchase agreements, service contracts, managed solar renewable energy certificates, demand response agreements, warranties and production guarantees throughout the bankruptcy proceedings.

Sunnova is being advised by Kirkland & Ellis LLP and Bracewell LLP as legal counsel, with Alvarez & Marsal serving as financial adviser. Moelis & Company LLC is acting as investment banker, and C Street Advisory Group is providing strategic communications support.

“I am incredibly grateful to our dedicated Sunnova team for their hard work and commitment,” concluded Mr Mathews. “We have built an innovative power provider, and I continue to believe deeply in the future of our industry and the promise of residential solar and storage.”

Fraser Tennant