Bolstered By Q1 Customer Growth, Sunnova Sticks to 2020 Guidance Despite Coronavirus

Unlike many of its peers, Sunnova Energy is keeping its 2020
guidance in place. The Houston-based residential solar company
expressed a “high level of confidence” that it would meet its
goals for the year as it reported earnings for Q1 2020.

In the first part of the year, Sunnova added 6,800 customers —
compared to 3,276 in Q1 2019 — and increased revenue by $3.1
million, to $29.8 million. Though Sunnova more than doubled its net
loss over the same period last year, to $77 million, CEO John
Berger doesn’t expect that to hold the company back in 2020.

“We’re prepared to weather any storm and we’re prepared to
do that for at least the next two years if not beyond,” Berger
told Greentech Media. “We’re prepared for the worst and hoping
for the best.”

Over the year Sunnova expects to add up to 30,000 new customers
and end with cash flow between $10 and $20 million. Berger said
after the first quarter the company was already close to reaching
half of its target revenue and income from system loans for the
entire year. The company beat its financial expectations for the
quarter.

Berger attributed the company’s position to its dealer-centric
model, conservative approach to forecasts and its recent work to
shore up finances through tax equity investment and debt
financing.

Sunnova’s confidence is not shared widely in an industry
struggling through the pandemic. Among the solar industry, the
residential sector has been particularly hard hit by an
unprecedented economic slowdown and shutdown orders restricting
installations and permitting.

Vivint Solar, SunPower and national leader Sunrun have all
revoked guidance for the year, bracing for the possibility of
reduced cash flows and lower installation figures. And those
companies, with national footprints, are in many cases better
positioned to weather the uncertainty than smaller and local
installers.

Sunnova relies on a diffuse network of 191 local dealers. While
managing the roll-out of online sales to local partners may have
proven difficult, Sunnova appears to have taken the change to
virtual sales channels in stride, growing installations over Q4
2019 and increasing its
storage attachment rate
to 30 percent, up from 24 percent in Q4
2019. On a Friday earnings call, Berger said the dealer model
allowed Sunnova’s partners to “tailor their actions to the
local situation.”

After a dip in demand in March and early April, Berger told GTM
that customer interest began ticking back up last month and has
returned to year-over-year growth. Whether that trend will hold
remains unclear.

Impacts to Sunnova’s financials and sales may not fully
materialize until later in the year, with the pandemic overlapping
only partially with the first quarter. The company is also girding
for potential resurgences of the virus, which is continuing to
spread throughout the U.S.

If cases begin to increase exponentially, Berger said the impact
on financial markets would likely be severe.

“I don’t think COVID[-19] is going to go away anytime
soon,” Berger told GTM. “I also think we have a very large
global economic problem and I’m concerned about that. I’m very
optimistic about our industry, but I’m very cautious on the
overall environment itself.”

The company did receive a loan through the Paycheck Protection
Program, part of federal stimulus legislation that incentivizes
businesses to keep workers on payroll by offering forgivable loans.
But after closing on recent financing arrangements, Sunnova said it
chose to pay the money back in May.

Looking through to the rest of the year, Berger admits that much
is mired in uncertainty. But the company has worked to frame solar
as a product that can save customers money in an economic downturn
and guarantee reliable power with the addition of storage.
California, the biggest solar-plus-storage market, is headed into a
fire season that will coincide with the pandemic, making it even
more difficult for people to go without power or evacuate from
their homes.

“We’re stuck in our homes, right? You can’t have the power go
off because a wildfire or hurricane,” said Berger. “People
recognize … that the fragility of the world we live in shouldn’t
be taken for granted.”

Source: FS – GreenTech Media
Bolstered By Q1 Customer Growth, Sunnova Sticks to 2020
Guidance Despite Coronavirus