Today Sunnova announced that it has secured $300 million in equity from private equity firm Energy Capital Partners. Following substantial funding raises involving at least three other private equity firms, the company has raised over $1.2 billion in three years.
Sunnova says that it will use the funds to primarily to acquire new customers and service its existing customer base. Working through a network of local installers, the company provides leases, power purchase agreements and loans for residential solar PV systems in 17 states. Additionally it operates in three overseas U.S. territories (Guam, Puerto Rico and Saipan), where other national solar companies have less of a presence.
Sunnova notes that due to its installer network, its acquisition of new customers will also create jobs and grow small businesses throughout its service area. As Sunnova is a private company, it is hard to know how large it is in terms of market share or revenue.
Sunnova also has a different business model than leading third-party solar providers. The way they raise their money is a little different, Mercom Capital CEO Raj Prabhu told pv magazine. He notes that instead of raising separate funds to deploy solar as SolarCity and Sunrun do, Sunnova raises money at the corporate level which they use for deployment.
However, the details of how this is being done are not clear. They raised over a billion dollars, but they are not very open about the details of their fundraising, notes Prabhu.
Another differentiator is Sunnova’s relationship to tax equity. The company says that it does not use tax equity financing to fund its installations. In an interview on extension of the Investment Tax Credit (ITC) in pv magazine‘s March print edition, Nat Kreamer of Spruce Finance stated that Sunnova has not been successful in raising tax equity financing.
This would explain why Sunnova was a dissenting voice arguing against ITC extension. Either way Sunnova will join other third-party solar companies in enjoying an ongoing boom across all solar market segments that is the result of a three-year ITC extension and subsequent phase-down.
Update: This article was changed at 2:10 PM EST (U.S.) on March 21 to include information sent by Sunnova.