In the third quarter of this year, residential solar installer Sunnova witnessed a slight drop in new customer additions, along with an increase in net losses compared to the same quarter last year. As reported, the company added approximately 37,600 new customers in Q3, bringing its total customer count to 386,200 as of September 30th. This figure falls short of its annual target, aiming to add between 135,000 and 145,000 customers in 2023, having added approximately 106,700 customers in the first three quarters of the year.
Despite the continuous growth in its customer base, Sunnova reported a net loss of $56.5 million in Q3, up from $32.3 million in Q3 2022. The increase in net loss was primarily attributed to higher interest expenses, netting $36.8 million, and elevated general and administrative expenses.
For the first three quarters of this year, Sunnova's net loss reached $267.6 million, a substantial rise from the $68.3 million net loss reported during the same period in the previous year. This was again linked to the escalation in interest expenses, netting $155.8 million, and increased general and administrative expenses.
In Q3, Sunnova's adjusted EBITDA stood at $40.4 million, a slight decrease from the $41.3 million reported in the previous year. Over the first three quarters of 2023, the company reported adjusted EBITDA of $83.0 million, down from $93.5 million during the same period in 2022. However, the company reaffirmed its commitment to achieving adjusted EBITDA for 2023 within the range of $235 million to $255 million.
Founder and CEO of Sunnova, William Berger, noted, “In Q3, Sunnova entered into a tax credit transfer transaction involving the sale of up to $145 million in investment tax credits… under the Inflation Reduction Act (IRA). Sunnova is dedicated to shaping and supporting the growth of this nascent market.”
Looking ahead, Sunnova has ambitious plans, aiming to add 185,000 to 195,000 new customers in 2024 while targeting adjusted EBITDA between $350 million and $450 million.
Berger highlighted the company's initiatives to navigate challenging macroeconomic conditions, including efforts to reduce working capital demands, manage operating expenses, decrease future corporate capital needs, and leverage advanced software and artificial intelligence applications to optimize operational efficiency.
In addition to the measures taken by the company, Sunnova secured funding from the US government last month. The US Department of Energy (DOE) agreed to provide up to $3.3 billion in loan funding, intended for the expansion of its energy monitoring and analysis platforms. The funding, of which $3 billion is guaranteed and will operate under a new loan channel named ‘Project Hestia,' will support improvements and expansions for its monitoring platforms.
Moreover, Sunnova commits to providing monthly servicing reports to the DOE, using data collected from its platforms and sharing information on greenhouse gas reductions achieved by customers installing its solar panels.
Berger concluded by stating, “As we navigate this higher interest rate and lower liquidity environment, it's essential to recognize the unique opportunity that arises from the convergence of declining solar equipment prices and the steady uptick in utility rates, creating a distinct wedge of value for our customers.”