President Donald Trump’s administration has cancelled a partial loan guarantee worth $2.92bn (approximately EUR2.69bn) previously awarded to Sunnova Energy, a company specialising in residential solar panels. The decision, confirmed by the company in a statement on Wednesday, marks a break from the federal energy commitments made under the previous presidency.
Guarantee cancelled amid energy financing review
The United States Department of Energy (DOE) has “de-obligated” the loan guarantee, according to a source familiar with the matter quoted by Reuters on May 28. This de-obligation means the federal government is no longer responsible for the guaranteed financing. The move comes as the DOE’s Loan Programs Office is being reviewed by the current administration, which is seeking to redirect public funding towards hydrocarbon sectors.
The guarantee was part of Project Hestia, announced in April 2023 under President Joe Biden’s administration. It aimed to support the installation of approximately 100,000 rooftop photovoltaic systems, prioritising lower-income households. At the time, the DOE described the initiative as the largest federal commitment ever made in support of residential solar in the United States.
Financial restructuring and strategic shift at Sunnova
Sunnova Energy Corporation, one of the largest U.S. residential solar providers, stated in a regulatory filing in March that it did not intend to utilise the Hestia credit line in the foreseeable future. The company is undergoing debt restructuring and has raised concerns about its ability to continue operations.
According to a source cited by Reuters, Sunnova has nevertheless issued $371mn in bonds backed by the Hestia project guarantee. These securities are not included in the debt currently being restructured. The company is said to have shifted its strategy toward leasing photovoltaic systems, made more competitive by tax credits introduced by the 2022 Inflation Reduction Act, also enacted under the Biden administration.
Budget cuts and uncertain future for the loan office
The cancellation of the guarantee comes amid growing uncertainty surrounding the DOE Loan Programs Office. The office, overseen by the Department of Government Efficiency launched by Elon Musk, is facing job cuts and a budget reduction outlined in the House of Representatives’ budget bill.
Since its establishment in 2009, the office has issued over $35bn in loans and guarantees, some of which have been repaid by companies like Tesla. However, it has remained under congressional scrutiny since the Solyndra case, a solar firm that went bankrupt after receiving $535mn in federally guaranteed loans.
