Sunnova, Sunrun, And Solar ABS

Summary

• Sunnova and Sunrun rely on Asset Backed Securitizations to fund operations, but in my opinion, this model is unsustainable in a high interest rate environment.
• Sunnova and Sunrun focus on solar servicing through leases and power purchase agreements more than residential ownership, in order to raise capital and fund operations.
• Both companies have been unprofitable for years and continue to accumulate debt through complex financial mechanisms.

Justin Paget

Summary

Many solar companies big and small have filed for Chapter 11 bankruptcy protection, not being able to withstand the high interest rate environment that will continue to persist for at least another year. Two of the biggest solar

Analyst’s Disclosure:I/we have a beneficial short position in the shares of NOVA, RUN either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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