Sunnova Energy International recently entered into a $3 billion partial loan guarantee agreement with the U.S. Department of Energy Loan Programs Office, which equates to a 90 percent guarantee of up to $3.3 billion of term loans, to support solar loans originated by Sunnova under a new solar loan channel.
The new solar loan channel, called “Project Hestia,” is expected to provide disadvantaged homeowners and communities “with increased access to clean, flexible power via Sunnova services by indirectly and partially guaranteeing the cash flows associated with consumers' loans,” the company said.
Each energy system will include access to Sunnova’s purpose-built technology, accessible by smart phone or other personal electronic device, Sunnova said.
The technology is designed to improve customer insights regarding their power usage and will facilitate demand response behavior.
This approach “is expected to expand access to Sunnova’s adaptive energy platform, lay the foundation for future virtual power plant activities, decrease greenhouse gas emissions, and increase the demand response benefits of residential power systems,” the company said.
The DOE loan guarantee agreement will support the origination of Sunnova loans associated with solar, storage, or other Sunnova Adaptive Home™ technologies that utilize Sunnova’s demand response and VPP enabling software throughout the United States and its territories.
Sunnova expects the loan guarantee agreement will support over an estimated $5 billion in Sunnova loan originations, reduce the company’s weighted average cost of capital, and generate interest savings.
Sunnova anticipates utilizing the DOE loan guarantee in connection with its first Hestia asset backed securitization, Hestia I, in the fourth quarter of 2023.
The DOE loan guarantee agreement is issued pursuant to Title XVII of the Energy Policy Act of 2005.
Project Hestia is designed to accelerate the deployment of new digital engagement and behavior modification technologies. The Sunnova app and portal aims to reduce greenhouse gas emissions, enhance the informed use of load controllers and smart appliances, and support grid stability by giving consumers near real-time insight into their residential energy system and quantifying the location-specific emissions impact of changes in consumer behavior.
Sunnova will provide DOE with monthly servicing reports supplemented by hardware and software deployment information. To measure project benefits, Sunnova will also measure and report on the reduction in greenhouse gases associated with Project Hestia.
To advance economic and environmental benefits for disadvantaged communities, Sunnova said it intends to use Project Hestia to finance collateral pools that realize agreed criteria related to FICO distributions, and certain concentrations of customers located in disadvantaged communities.