Report: U.S. Residential Solar Financier Sunnova Plans IPO

Sunnova Energy Corp., among the largest U.S. residential solar
third-party ownership providers, is planning an initial public
offering that could value the Houston-based company at more than $1
billion including debt, according to a Tuesday report
from Reuters citing
anonymous sources. 

Sunnova declined to comment on Reuters’ report that it has
filed confidential documents to hold an IPO later this year. The
company, founded in 2012, has seen more than $2.5 billion in
investment from backers including Energy Capital Partners, Triangle
Peak Partners, and Quantum Strategic Partners.

Sunnova has built up a significant market share in the
residential solar financing market, providing leases and loans for
systems installed via a nationwide network of contractors. At the
end of 2018, Sunnova was the fourth largest residential solar
third-party ownership (TPO) provider in the United States, behind
Sunrun, Vivint Solar, and SunPower, according to Wood Mackenzie
Power & Renewables’s
U.S. Residential Solar Finance Update
.

What differentiates Sunnova from these competitors, however, is
that Sunnova also provides residential solar loans, allowing the
company to take advantage of that growing market as well, Alison
Mond, WoodMac solar analyst, noted Tuesday.

At the end of 2018, Sunnova was the seventh largest residential
solar financier overall, including both TPO players and loan
providers, behind Sunrun, Mosaic, Loanpal, Sunlight Financial,
Vivint Solar, and Dividend Finance.

Sunnova has raised more financing than some of its biggest
competitors that have also taken the IPO route. For example, Sunrun
had raised $681 million in venture financing when it went public
in 2015,
raising another $251 million
 to achieve an initial market
capitalization of $1.36 billion. SolarCity (now Tesla) raised
roughly $90 million in
its 2012 IPO
 to achieve an initial market capitalization of
about $600 million.

But then, of course, the U.S. residential solar market is much
larger, and the products being sold and financed much cheaper, than
they were even a few years ago. Sunnova’s most recent raise of

$775 million in April 2017
included the company’s first
asset-backed securitization, and one of the largest in the
industry’s history.

Sunnova’s reported IPO may give the market a measure of
investors’ appetite for a residential solar provider that relies
solely on its network of regional dealers and contracts to install
the solar and storage systems it sells, WoodMac solar analyst
Austin Perea noted.

By contrast, Sunrun, Tesla/SolarCity, Vivint, and SunPower all
do a combination of direct and channel partner installations.
“The question to ask here would be whether Sunnova’s IPO says
anything about the long-term viability of the national installer
model,” Perea said. 

Sunnova has also followed its competitors into the business of
providing behind-the-meter batteries alongside solar systems,
launching its SunSafe
product in March 2018
 and now selling in California,
Arizona
, Hawaii, Puerto Rico and
Texas
. That’s compared to market leader SunRun, which sells
its BrightBox package to Hawaii, Arizona, Nevada, New York and
Massachusetts. 

Source: FS – GreenTech Media
Report: U.S. Residential Solar Financier Sunnova Plans IPO