Recently, bankruptcies among U.S. solar companies are increasing. As the Donald Trump administration pushes for cuts to solar subsidies, there are growing concerns that solar companies may face a wave of bankruptcies.
On the 9th (local time), Bloomberg and other major foreign media reported that Sunova Energy, the largest residential solar installation company in the U.S., has applied for Chapter 11 bankruptcy protection in a southern Texas bankruptcy court. Chapter 11 is a process for restructuring under the supervision of a bankruptcy court to seek revival, akin to Korea's 'court receivership.'
Founded in 2012, Sunova became a symbol of the U.S. residential renewable energy boom, once securing over 400,000 customers and surpassing a market value of $5 billion (about 6.8 trillion won). This was thanks to the U.S. government's solar installation incentives and homeowners' energy transitions.
However, Sunova currently carries a liability of $8.9 billion (about 12.1 trillion won) and plans to sell or clean up most of its assets through the bankruptcy filing. Last year, it recorded a loss of $448 million (about 600 billion won), and Sunova's stock price has fallen more than 93% as of April this year compared to its peak in 2021.
Sunova's crisis intensified with the onset of the Trump administration. With rising interest rates making financing difficult, tariffs increased equipment import costs. Last month, the Trump administration partially canceled about $3 billion (about 4 trillion won) in loan guarantees previously approved for Sunova by the Joe Biden administration.
Paul Matthews, CEO of Sunova, explained the background of the bankruptcy filing, saying, "The current administration does not prioritize the continuous support of subsidies for the solar industry and the overall success of the industry."
According to The Wall Street Journal (WSJ), Sunova has struggled in recent months to provide solar panel installations, energy storage, and financial services to residential customers. To cut expenses, Sunova plans to reduce its workforce by about 55%, equivalent to 718 jobs.
On the 6th, Solar Mosaic, a private company providing loans for solar installations, filed for bankruptcy. The company stated that it has been facing difficulties in attracting new investments and resolving liabilities due to political uncertainty related to solar tax credits.
WSJ evaluated that "sluggish demand, rising interest rates, and changes in the government's attitude toward renewable energy have shaken the solar industry," noting that "especially in recent months, congressional leaders pushing for cuts in incentives have significantly affected the solar industry."
Currently, the ruling Republican Party is seeking to move the effective date for the elimination of solar tax credits under the Inflation Reduction Act (IRA) from 2033 to 2028 in support of the tax cut legislation of President Trump. Pavel Molchanov of Raymond James, a global investment bank, said, "Depending on the handling of the tax bill in Congress, the solar industry's situation may worsen by 2026."
Last year, U.S. solar company SunPower filed for bankruptcy protection. Amid sharp increases in installation prices for residential solar panels, the reduction in related subsidies in California, one of the largest solar markets in the U.S., had a significant impact.
Reuters reported, "Sunova is the second residential solar company to file for bankruptcy this month," adding, "Rising interest rates, cuts in incentives in major markets like California, and concerns over subsidy reductions indicate that the solar industry is facing challenges."