U.S.-based residential solar firm Sunnova Energy reported a revenue of $235.3 million in the third quarter (Q3) of 2024, up 19% year-over-year (YoY) from $198.4 million in the corresponding quarter last year. The revenue growth was driven by a rise in customer agreements and incentives revenue, which increased by $49.3 million YoY.

Despite revenue growth, Sunnova experienced a net loss of $150.3 million in Q3 2024, against a $56.5 million loss in the same quarter in 2023. Factors contributing to the expanded net loss include a substantial increase in interest expenses, which reached $182.5 million, up from $57.6 million in the prior year, likely driven by higher borrowing costs and investment in growth initiatives.

Additionally, operating expenses rose due to workforce adjustments and process optimization, but the company anticipates these will support long-term cost efficiency.

Cumulative solar power generation under management increased to 2.9 GW from 2.3 GW, and energy storage under management increased to 1,556 MWh from 981 MWh as of September 30, 2024.

“In the third quarter, the Sunnova team delivered solid results as we continued to focus on the key priorities we outlined at the beginning of fiscal year 2024, mainly aimed at driving cash generation,” said William J. Berger, Sunnova’s founder and CEO. “Although our unrestricted cash balance declined in the third quarter, it was largely due to working capital seasonality. With the tax capital proceeds received in early October and additional asset-level capital proceeds expected later in the year, we remain confident in our ability to deliver on our $100 million cash generation target for 2024.”

9M2024

Revenue for the first nine months (9M) of 2024 grew 17% to $615.8 million from $526.5 million in the corresponding period last year. Customer agreements and incentives revenue was $404.3 million, up 43% from $282.8 million in 2023. Solar energy system and product sales saw a decline, reaching $211.4 million in 2024, down 13.2% from $243.6 million in 2023.

The company’s net loss increased by 20% to $320.1 million, up from $267.6 million in the same period last year. Higher interest expenses and provisions for expected credit losses contributed to this expanded loss.

Total operating expenses rose to $811.4 million, a 20.5% increase from $673.2 million in the prior year. General and administrative expenses increased by 21.7% to $339.7 million compared to $279.1 million in 2023, largely due to workforce costs and strategic initiatives.

During the earnings call, Berger noted that high interest rates and the ongoing reduction in capital velocity have created a challenging environment for the solar industry. This has made managing working capital more critical. He emphasized that while interest rates are leveling off or possibly decreasing, the availability and speed of working capital remain a limiting factor for industry growth.

Rising utility rates are a significant driver of demand for solar installations across the U.S. Sunnova highlighted that rate increases, particularly in states like Texas and Florida, are making solar solutions more attractive as they provide consumers with protection against energy cost inflation. Berger mentioned that the rise in utility rates and declining equipment costs have created a favorable economic environment for solar adoption.

Sunnova reported a 21% narrower net loss in the second quarter of 2024 at $79.7 million, an improvement from the $100.8 million loss reported last year, primarily due to higher revenue and investment tax credit sales resulting in an income tax benefit.