Sunnova’s revenue reached US$235.3 million in the third quarter, up from US$219.6 million in the second quarter, as “customer agreements and incentives revenue”, which the company described as a “core” operation, saw a 46% increase between the third quarter of 2023 and the third quarter of 2024 to reach US$49.3 million. The company also noted that, in the third quarter of 2024, its weighted average number of power purchase agreements (PPAs) signed and solar systems leased reached 238,400, up from 173,500 in the same quarter of 2023, suggesting that, despite its financial struggles, Sunnova has continued to expand its portfolio of operating residential solar systems.
“In the third quarter, the Sunnova team delivered solid results as we continued to focus on the key priorities we outlined at the beginning of fiscal year 2024, mainly aimed at driving cash generation,” said William J Berger, Sunnova’s founder and CEO. “Although our unrestricted cash balance declined in the third quarter, it was largely due to working capital seasonality.”
The graph above shows how the company’s most recent losses compare to those endured in prior quarters, with the sustained increase in profits a positive development for the company. Berger also noted that tax credits in general, and Investment Tax Credits (ITCs) in particular, have been a boon for the company; Sunnova noted that, in the third quarter of 2024, its use and sale of tax credits delivered US$46.1 million in benefits, up from just US$9.3 million in benefits seen in the third quarter of 2023.
The presence of ITCs has been a cornerstone of the US’ Inflation Reduction Act (IRA), as it has sought to encourage greater domestic manufacturing of clean energy products and technologies, and the transfer of these credits has quickly become a significant industry within the US energy space. Last month, figures from Crux suggested that, in the third quarter of 2024 alone, US companies traded as much as US$7.5 billion of tax credits across the renewable power space, and Sunnova’s latest results show the company has benefitted from a considerable US$159.4 million in tax credit benefits so far in 2024.
Berger noted that these positive developments had encouraged the company to maintain its cash generation guidance for the next three years, reaffirming its commitment to generating US$100 million by the end of this year. Sunnova expects to generate US$350 million in 2025, and US$400 million in 2026, an optimistic outlook for the company after it revised down its forecast for quarterly customer additions, historically a key metric included in Sunnova’s financial results that has this year ceased to be published, in its second quarter results.
