Solar Powerhouse Sunnova Crumbles Under $8.5B Debt Mountain, Files Bankruptcy

Sunnova Energy, the solar giant everyone thought was unstoppable, collapsed into Chapter 11 bankruptcy on June 8, 2025. The Texas-based company couldn’t handle its crushing $8.5 billion debt load. They dumped 718 employees—55% of their workforce—just days before filing. Stock cratered 32% overnight. So much for clean energy success stories. With $6 billion in notes at risk and subsidiaries already folding, this mess is just getting started.

Sunnova Energy crashed into bankruptcy court on June 8, 2025, capping off a brutal week that saw the Trump administration yank a $2.92 billion loan guarantee and the company slash 718 jobs.

The residential solar installer filed for Chapter 11 protection in the Southern District of Texas, listing assets and liabilities somewhere between $10 billion and $50 billion. That’s quite the range.

Three days earlier, its subsidiary Sunnova TEP Developer had already thrown in the towel with its own bankruptcy filing on June 1.

Talk about a death spiral. The company’s stock tanked 31.82% in pre-market trading on June 9, because apparently losing government backing and firing half your workforce doesn’t inspire investor confidence. Who knew?

Stock plummets 31.82% after government pulls funding and company axes half its workforce

The layoffs hit hard – 718 employees, roughly 55% of Sunnova’s total workforce, got pink slips on May 30. The board approved the bloodbath right before the bankruptcy filing, probably while updating their LinkedIn profiles.

This mess gets complicated fast. Sunnova has nearly 40 subsidiary units scattered across its corporate structure. The company serves as sponsor and originator for 24 residential solar loan and lease transactions.

KBRA, the rating agency, is sweating bullets over 54 classes of notes from these deals totaling $6 billion. That’s billion with a B. The good news is each issuer operates as a bankruptcy-remote entity with first-priority perfected security interest in collateral.

The bankruptcy affects 13 loan and 11 lease deals where Sunnova acts as production and performance guarantor. Translation: a whole lot of solar customers might be wondering what happens to their panels now.

Industry watchers say more Sunnova subsidiaries could file for bankruptcy protection soon. The parent company itself might need additional bankruptcy protection beyond what the subsidiaries have done. It’s like watching dominoes fall, except each domino costs millions.

The filing hammers home the brutal reality facing renewable energy companies. Even with all the talk about green energy being the future, companies still need cold hard cash to survive. Sunnova learned that lesson the hard way.

The collapse comes as a stark contrast to the broader solar industry which added 39.6 GW capacity in 2024 alone, highlighting the disconnect between sector growth and individual company struggles.

The voluntary bankruptcy petition marks another casualty in the residential solar sector, where grand ambitions keep colliding with financial reality. Some industry reports suggest this case might even head to the California Supreme Court. Because nothing says “clean energy transformation” quite like bankruptcy court.