The Trump administration has canceled a loan guarantee of $2.92 billion granted by the previous administration to solar major Sunnova.
Per a Bloomberg report, the cancelation followed Sunnova’s telling the federal government it had changed its mind about the loan and no longer wanted to use it. The company had only made use of some $371 million from the facility, the report noted. The Biden admin had celebrated the loan guarantee as the largest subsidy package ever granted for solar power.
For Sunnova, however, the package was the worst option compared to leasing solar systems to its customers, utilizing tax credits provided for in the Inflation Reduction Act. These credits were a more lucrative option than issuing government-guaranteed debt, one unnamed source told Reuters.
Sunnova is currently preparing to file for bankruptcy, but that has nothing to do with Trump’s policies. The company has been struggling recently under the weight of higher interest rates that prompted a stock crash in wind and solar last year. It has also suffered a blow from state governments’ decision to curb the availability of subsidy money for solar as they realised the money supply is not infinite.
Now, the Trump administration has taken the axe to those tax credits along with a lot more other subsidy options for alternative energy developers and suppliers, which has likely made Sunnova’s position all the more precarious. It has, in fact, made the position of the whole industry a lot more precarious.
“Developers have built $145 billion in solar, wind and battery-storage projects since expanded federal tax credits were approved in 2022, while manufacturers have invested $73 billion in 94 factories that are now operating,” the Wall Street Journal wrote earlier this month. Now, all this investment is in jeopardy thanks to the “big, beautiful” budget bill. Sunnova and sector players are at the mercy of the market.
By Irina Slav for Oilprice.com
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