Sunnova becomes the second company to file for bankruptcy amidst industry challenges. Credit: anatoliy_gleb /Shutterstock.

Residential solar panel installer Sunnova Energy has filed for Chapter 11 bankruptcy protection in the US, as it faces increasing pressure from growing debt and declining demand, as reported by Reuters.

The move highlights ongoing challenges within the industry, including high interest rates and reduced incentives in key markets such as California.

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Sunnova is the second residential solar company to file for bankruptcy in June 2025, indicating broader issues affecting the sector.

Solar Mosaic sought similar protection, while SunPower ceased operations one year earlier.

Sunnova’s subsidiary, Sunnova TEP Developer, also filed for Chapter 11 bankruptcy protection at the start of June.

Sunnova made the filing at the Bankruptcy Court for the Southern District of Texas following a warning issued by the company in March regarding its inability to continue operating sustainably.

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The company’s estimated assets and liabilities are listed between $10bn to $50bn, with total debts amounting to $10.67bn, as of December 2024.

Sunnova also announced that it had signed agreements with Atlas SP Partners and Lennar Homes to divest specific assets to each company for $15m and $16m respectively, subject to court approval. The company will maintain its regular operations during the sale process.

The company also announced plans to reduce its workforce by 55% – 718 employees – as part of cost-cutting measures.

The situation is further complicated by policy changes under President Donald Trump’s administration, which revoked a partial loan guarantee worth $2.92bn previously awarded by President Biden’s administration.

Solar panel companies in the US expressed concerns about a Republican budget bill progressing through Congress. They warned that this legislation could harm the industry by removing a substantial subsidy for homeowners that has been crucial to its expansion.

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