By Avi Salzman and Mackenzie Tatananni

Shares of Sunnova Energy International cratered Monday after the company issued a warning about its ability to keep operating, given the company's cash constraints.

The stock plunged 64% to 60 cents after the rooftop solar company said its unrestricted cash, cash flows from operating activities, and commitments under existing financing agreements were "not sufficient to meet obligations and fund operations." It issued what is known as a "going concern" warning, which raises doubts about a company's ability to stay in business.

The rooftop solar industry has struggled lately, because fewer people are installing solar panels due to high interest rates and unfavorable or uncertain regulatory policies. As of December, Wood Mackenzie said 2024 U.S. installations were on track to fall 26% from the year before. The Trump administration's policies have only added more uncertainty.

"The overall environment is terrible," said Sunnova CEO John Berger on a conference call with analysts. "I mean, it's the political environment, the capital markets -- look at the equity trading off. And so, that just gets everybody in a very bad mood, candidly."

Competitor Sunpower filed for bankruptcy protection last year as its financial situation deteriorated.

Sunnova said it had hired a financial advisor to assist in its debt management and refinancing efforts.

However, "management cannot conclude completing future components of its plans are probable at this time as certain aspects of these plans are, at least in part, beyond management's unilateral control," Sunnova wrote.

For the fourth quarter, Sunnova reported a net loss of $127.7 million, narrower than the $234.8 million loss reported a year earlier.

The Houston-based company was founded in 2012, offering solar panel installations and energy storage services. The Better Business Bureau last accredited Sunnova in 2019 and issued a formal alert following hundreds of customer complaints.

Write to Avi Salzman at avi.salzman@barons.com and Mackenzie Tatananni at mackenzie.tatananni@barrons.com

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March 03, 2025 12:10 ET (17:10 GMT)

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