Sunnova Bankruptcy Adds to Puerto Rico Residents’ Energy Woes

After Hurricane María ravaged Puerto Rico in 2017, knocking out power to the entire island, Gabriel Rodríguez Acevedo’s parents turned to solar company Sunnova Energy International Inc. seeking an alternative to long supply lines and noisy gas-powered generators.

When the company filed for Chapter 11 on June 8, Rodríguez Acevedo worried about the 25-year warranty, uncertain whether installer Power Solar or financier Sunnova would handle repairs, and if his retired parents would face out-of-pocket costs.

“I don’t know if the responsibility falls on Power Solar or whoever buys the debt,” Rodríguez Acevedo said. “If another hurricane like María comes and damages a panel, who would be responsible?”

Battered by blackouts and high energy costs, Puerto Ricans have adopted solar at some of the fastest rates of any US jurisdiction. Many fear Sunnova’s default threatens what they saw as a reliable solution to power outages and rising energy rates.

An uptick in solar bankruptcies adds a layer of uncertainty, as their equipment remains vulnerable to natural disasters.

At least a dozen solar companies filed for bankruptcy in the past two years, including another major lender, Warburg Pincus-backed Solar Mosaic, this month.

Previous bankruptcies left thousands of homeowners on the US mainland with leases but no support for malfunctioning systems and installers directing them to bankrupt financiers for assistance, Bloomberg Law found.

Bankruptcy Fallout Looms

Sunnova, which reported roughly $8.9 billion in long-term debt and plans to sell its assets in bankruptcy, told customers in a June 9 email that it’s still providing service and fulfilling warranty obligations, and that clients must continue making payments.

Puerto Rico is Sunnova’s second-largest residential market, with 80,454 net-metered third-party installations reported in March by the Energy Information Administration, just behind California’s 91,521. The state has about 12 times the island’s population, but higher competition.

Sunnova in a statement said it will provide customers with updates on “any material changes that may impact the service and support” it offers in Puerto Rico. The company also intends to continue projects under the now-overhauled US Department of Energy’s Puerto Rico Energy Resilience Fund, which committed $440 million in 2024 to install rooftop solar and batteries in vulnerable households.

Sunnova said it’s seeking court authorization to continue disbursing these funds to complete projects.

Solar bankruptcies in recent years, from Vision Solar’s liquidation to SunPower Corp.'s reorganization, left clients in limbo. As SunPower assets were sold, customers faced service delays, repair issues, and communication challenges with new owners.

Bryant Dunivan Jr. of Dunivan Law PA, who has experience assisting customers with solar panel loans, said Sunnova should operate as usual in Chapter 11. If customer loans are sold, the obligations would transfer to a new lender, which could create issues.

“That’s the large one that could impact service,” Dunivan said. “Also, if layoffs occur, that could impact their service requests.”

Sunnova said in June it was laying off about 55% of its workforce.

Juan González, president of WindMar, one of the largest local installers, said warranty and service obligations in Sunnova agreements are between homeowners and the financier.

“Our understanding is that Sunnova’s servicing obligations, under both leases and loans, are budgeted from the customer payments and cash flows and will either stay with Sunnova or transition to a successor, depending on the Chapter 11 case,” he said.

González noted that Sunnova continues to service Puerto Rico customers with its own crews, while WindMar assists in expediting site visits and warranty claims.

WindMar doesn’t have a direct contractual service obligation to mutual Sunnova-WindMar customers, González said. “We provide contact-center support, troubleshooting, and service truck rolls mostly on a good-faith basis,” he said.

Despite Sunnova’s assurances, some clients fear the bankruptcy will hinder access to assistance.

Cynthia Santos, a Sunnova client since December 2024, said her system hasn’t worked properly for months, forcing her to pay both for the solar system and for LUMA Energy, the private company that manages power distribution and transmission.

“I’m essentially paying twice,” Santos said.

In addition to warranty and repair claims, the bankruptcy claims process could prove difficult for certain Puerto Ricans, especially seniors and non-English speakers.

Hidden Opportunities

Puerto Rico Energy Czar Josué Colón Ortiz said there were no immediate indications that Sunnova’s bankruptcy was destabilizing the island’s solar sector.

“We may find out” otherwise, he told Bloomberg News on the sidelines of a June 12 Chamber of Commerce local meeting. “But at the moment, I have not received any official notice that those companies that are providing distributed energy to residences and businesses have been affected by this situation.”

Javier Rúa-Jovet, Solar Energy Storage Association of Puerto Rico’s chief policy officer, said Sunnova’s troubles were opening up opportunities for competitors.

“One of the interesting things that’s happening is that both WindMar and Power Solar, which had been partners of Sunnova, have started their own financing divisions,” he said.

On June 2, the day after Sunnova affiliate TEP Developer filed for bankruptcy, Omar Sebastián Rodríguez received an email from Sunnova notifying him that his financial agreement for the equipment installed in April was terminated at WindMar’s request.

Rodríguez said the company committed to providing details for the new agreement with WindMar within 15 to 30 days.

“I hope they honor the same terms and conditions I agreed to before the Sunnova cancellation,” Rodríguez said.

WindMar denied that homeowners were automatically enrolled in new leases, saying it offered an alternative financing option for certain projects.

Sunnova’s bankruptcy could also fuel growth for Sunrun, another major player in the Puerto Rico solar market. Sunrun declined to comment.

Rúa-Jovet also said there’s no evidence of a slowdown in solar adoption, which is running at about 4,500 new installations per month.

“What drives installations in Puerto Rico is a combination of elements which have not changed,” he said, “and that’s mainly that we have expensive electricity and a weak grid.”