The US administration has withdrawn a $2.92bn partial loan guarantee for Sunnova Energy, a residential solar panel installer, as reported by Bloomberg.
The Department of Energy (DOE) has “de-obligated” the loan guarantee, meaning the federal government is no longer responsible for the financing.
The move comes as Sunnova is restructuring its debt and has expressed concerns about its ability to continue operations.
Sunnova stated in a regulatory filing in March 2025 that it did not plan to utilise the DoE facility, known as Project Hestia, in the foreseeable future.
The previous administration under former President Joe Biden announced a partial loan guarantee in April 2023 to support financing for 100,000 rooftop solar installations, particularly for lower-income homeowners.
Under Biden, the DoE’s Loan Programs Office aimed to accelerate clean energy sector development by providing loans to companies that found it difficult to secure private funding.
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By GlobalDataThe Energy Department described Project Hestia as the largest US government commitment to solar power at that time.
However, the residential solar sector has faced challenges due to increased interest rates, which have raised the cost of financing.
Sunnova has issued $371m in bonds backed by the Project Hestia loan guarantee. These bonds are not part of the debt Sunnova is currently looking to restructure.
Project Hestia became less appealing to Sunnova because the company could offer more affordable leased systems to homeowners, capitalising on tax credits from the 2022 Inflation Reduction Act introduced by Biden.
The tax credits for loans, which were the focus of Project Hestia, are considered less beneficial.
The current administration, led by President Donald Trump, is prioritising oil and gas production and has indicated a review of DoE financing for alternative energy companies.
The future of the loans office is uncertain, with job reductions implemented by Elon Musk’s Department of Government Efficiency and budget cuts proposed in the House budget bill.
Since 2009, the office has issued $35bn in loans and loan guarantees, with repayments from companies including Tesla.
However, it has faced criticism from Republicans since 2011 following a $535m loan to Solyndra, a solar company that later failed.
The Department of Energy has not commented on the cancellation of Sunnova’s loan guarantee.
