US DOE provides $3bn guarantee for Sunnova solar-storage

The US Department of Energy Loan Programs Office is to provide energy as a service provider Sunnova Energy International with a partial loan guarantee of up to $3 billion to support loans originated by the company to accelerate the adoption of solar and storage in disadvantaged communities and lay the foundations for virtual power plants.

The loan guarantee equates to a 90% guarantee of up to $3.3 billion of financing to support a new solar loan channel named ‘Project Hestia’.

Project Hestia would provide disadvantaged individuals and communities with increased access to Sunnova services by indirectly and partially guaranteeing the cash flows associated with those consumers’ loans. To be eligible, each energy system must be outfitted with Sunnova’s purpose-built technology, accessible by smart phone or other personal electronic device. The technology is designed to improve customer insights regarding their power usage and facilitate demand response behavior. 

Sunnova believes this approach is expected to expand access to Sunnova’s EaaS offerings, decrease greenhouse gas emissions, and increase the demand response impact of residential power systems.

The transaction is expected to close in the second quarter of 2023. Sunnova plans to issue its first securitization under the program in 1H 2023.

Sunnova was advised by ATLAS SP Partners and Citi on the transaction. Baker Botts acted as legal advisor to Sunnova and Kramer Levin acted as legal advisor to the financial advisors.

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