Sunnova uses portfolio to secure $615 million in funding

With the help of Credit Suisse, the residential solar company’s lease/PPA portfolio allowed it to close one of the largest funding rounds in the asset-backed securities market.

April 25, 2017 Frank Andorka

Image: Pixabay

Finally – an antidote to the string of bankruptcies plaguing the residential solar installation market lately.

In stark contrast to competitors SunEdison and Sungevity, Sunnova used its portfolio to secure $615 million round of funding, split between a private placement of its subsidiary and two warehouse credit facilities.

Credit Suisse oversaw the transactions, which included $255 million placement for its subsidiary Helios Issuer and two warehouse credit facilities totaling $360 million.

“Our view has been the same from day one: distributed solar is becoming the most cost-effective form of power service and the company that can focus on long-term profitability in this growing and dynamic sector will be well-positioned to succeed,” said Sunnova CEO William J. Berger. “At the end of the day, Sunnova isn’t simply a solar company; we’re a power company.”

Sunnova has now raised $695 million over the past two months and more than $2 billion in the past four years, including tax equity, debt and corporate equity, from private equity firms, institutional investors and major Wall Street banks. As pv magazine reported earlier this month, Sunnova’s assets included residential installations in 14 states, Puerto Rico and Guam.

“The U.S. power industry is changing, and we are leading that change,” said Jordan Kozar, chief financial officer. “These financings are yet another sign of the strength that we have created through focus and financial discipline.”

Sunnova’s securitization is not the first in the residential solar market – and the two companies that have are still standing strong, avoiding the struggles experienced by competitors Vivint Solar and Sungevity.

The first company to back its funding rounds with its assets was SolarCity, which launched the sector’s first transaction in November 2013. Two years later, Sunrun decided to launch its own securitization transaction.

On EnergySage’s most recent list of the Top 10 residential solar installers (by size), using 2015 numbers, Sunnova was the third largest company behind only SolarCity and Vivint.

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