Sunnova narrows its quarterly loss and looks to build on SunStreet opportunity

The company narrowed its first quarter loss to $24 million, an improvement from a year earlier and driven by lower interest expenses.

April 29, 2021 David Wagman

Image: SunStreet

Sunnova Energy International posted a net loss of $24.1 million for the three months ended March 31, 2021. That compared to a net loss of $77.0 million for the three months ended March 31, 2020.

The company said the smaller loss was largely the result of lower net interest expense. It said this was driven by decreases in realized losses on interest rate swaps of $31.3 million related to the termination of certain debt facilities in 2020, unrealized losses on interest rate swaps of $26.3 million, and debt discount amortization of $2.9 million.

Sunnova said its first quarter revenue rose to $41.3 million, an $11.4 million increase from a year earlier. The increase was primarily due to an increase in the number of customers served.

These decreases were offset in part by an increase in interest expense of $2.5 million due to an increase in the principal debt balance after entering into new financing arrangements.

In February, Sunnova said it would acquire Lennar’s residential solar platform, known as “SunStreet.” As part of the deal, Sunnova became the residential solar and storage service provider for Lennar’s new home communities that offer solar.

The deal offered Sunnova access to a multi-year supply of homesites, reduced customer acquisition cost by making solar a standard feature on new homes, and an opportunity to upsell solar and battery storage services to the roughly 250,000 homes built by Lennar in the last decade.

The company said its first quarter total net operating expense rose to $64.6 million, an increase of $20.4 million from the same period a year earlier. The increase stemmed from an increase in the number of customers served, greater depreciation expense, and higher general and administration (G&A) expense.

Its G&A expense was higher due to $4.0 million in SunStreet acquisition costs. The company also cited higher payroll and employee-related expense due to an increase in non-cash equity compensation and the hiring of personnel in commercial operations to support growth.

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