The recent bankruptcy of a solar panel retailer exposes not just problems with making solar power economically viable, but also how government programs and conflicted policymakers can waste taxpayer money on bad companies.
Government support in the form of loan guarantees or subsidies has a history of finding companies like Solyndra and others that go out of business or declare bankruptcy despite infusions of government financial help. The latest example is a solar panel company called Sunnova, Inc.
Founded in 2012 by William J. Berger, Sunnova was a commercial and residential solar company that sold and leased clean energy technology, performed solar panel installations, and even offered financing plans such as loans. The company did business all over the country, especially in California, Puerto Rico, and New Jersey.
Back in September 2023, during the administration of former President Joe Biden, the Loan Programs Office (LPO) of the US Department of Energy closed the deal on a $3.3 billion loan guarantee to Sunnova in support of the company’s “Project Hestia” program, which looked to encourage new customers.
Project Hestia, named for the ancient Greek goddess of hearth and home, was designed to support loans for domestic solar purchasers, with the stated goal of making “distributed energy resources” more available to homeowners. The project used a “virtual power plant model” promoted by the director of the LPO, who wrote an opinion piece on the subject in October 2023. With the LPO loan guarantee, Sunnova had the ability to offer government-backed loans to customers that would otherwise not be able to afford rooftop solar.
Yet what Sunnova also had was a parade of red flags that should have raised concerns within the LPO. As the loan guarantee was being awarded, the Better Business Bureau (BBB) had flagged the company for a “pattern of complaints” about its sales practices and customer service. The Better Business Bureau last accredited the company in 2019, and despite Sunnova’s claim that it was “working closely” to reacquire accreditation, the bureau noted that “…the BBB is not able to work with Sunnova Energy Corporation at this time to have accreditation reinstated as the business currently does not meet the BBB’s Standards for Accreditation.”
Sunnova also had problems in Puerto Rico, where the island’s Energy Bureau required it to change business practices after getting complaints from customers about its contracts and billing procedures. Customers alleged that their signatures had been transplanted onto restrictive contracts, and that Sunnova salespersons made false representations as to the value of the product. One family reportedly moved out of the country but was not allowed to remove the solar panels from their roof, forcing them to continue paying upkeep or face legal action. Even worse, the only recourse Sunnova allowed customers was an in-house arbitration process, sometimes taking place thousands of miles away in Texas – a requirement that the Energy Bureau determined was illegal.
The obvious question, then, is why Sunnova was selected for a $3 billion loan guarantee? Six months after the award, in December 2023, a group of congressmen asked that very question, citing the company’s history of shady business practices and comparing it to Solyndra Inc., a notorious solar cell manufacturer that went bankrupt in 2011 despite receiving more than $500 million in stimulus funds during the Obama administration.
The congressional inquiry also focused on the LPO’s director, Jigar Shah. Shah is linked indirectly to Sunnova through an industry group called the Cleantech Leaders Roundtable. Cleantech, which Shah cofounded in 2019, shared a board member (Anne Slaughter Andrews) with Sunnova. A solar industry veteran, Shah left the LPO in January in front of the incoming Trump administration, though he has remained active in clean energy spaces.
Furthermore, Shah has been accused of using his role as the director of the LPO to benefit Cleantech, operating a “pay-to-play” scheme with his former organization as a beneficiary. Shah continued to be listed on the Cleantech website until 2023, years after he joined the Department of Energy in March 2021. During this time, he also continued to appear at Cleantech events for loan-seeking companies, including a “Deploy23” conference that Cleantech invited the LPO to cohost in 2023.
Since leaving the government, Shah has defended the Sunnova loan specifically, even after the company’s bankruptcy. When asked about taxpayer risk, Shah denied that the LPO funds had been wasted, stating “Only if the tariff uncertainty caused a similar level of pain to the Global Financial Crisis would the LPO have to pay out anything on the Guarantee.” Shah can claim that no taxpayer money is at risk, and explain how the LPO loan guarantee is different from Sunnova’s broader corporate operations – but this fails to explain why those red flags about the company were ignored to get Sunnova the loan guarantee in the first place.
Time has not been kind to Sunnova’s supporters. In February 2025, Sunnova held its annual meeting for its retail dealers. Despite being months in arrears on payments to these dealers and struggling to handle its mounting debt, the company urged its dealers to keep marketing and selling its solar panels, encouraging their patience and promising them payment. According to some dealers, this was the result of a new payment contract introduced last December, which delayed immediate payouts to allow Sunnova to hold onto cash for longer. Some dealers feared having their accounts shut down if they did not agree to the change.
Four months later, Sunnova was bankrupt. The company filed for bankruptcy in the Southern District of Texas in early June, and was allowed to continue its operations while it seeks a buyer. Sunnova had already been in trouble for months by this point, especially after the incoming Trump administration canceled the remainder of the Sunnova loan guarantee in May.
The struggling company reported nearly $9 billion in funded debt, and saw its share price fall by as much as 30 percent while gutting more than half its workforce. Sunnova has since announced the sale of its business operations and assets to a group controlled by GoodFinch Management for $25 million. . Meanwhile, all those subsidiary dealers are saddled with about $347 million in unpaid funds, with no clear path or timeline for getting the money they are owed.
While they wait, Sunnova’s executives won’t. On July 15, Sunnova asked the bankruptcy court for permission to offer a $7 million incentive plan to seven members of its top leadership, including its CEO. This, the company told the court, would ensure that these officers are “properly incentivized” during the bankruptcy process.
