Sunnova Sticks to 2020 Guidance, Bolstered By Customer Growth
In contrast to other U.S. residential solar companies, Sunnova Energy kept its 2020 guidance in place and expressed a “high level of confidence” that it will meet its goals for the year.
In the first quarter of 2020, Houston-based Sunnova added 6,800 customers — compared to 3,276 in Q1 2019 — and increased revenue by $3.1 million, to $29.8 million. Though Sunnova more than doubled its net loss over the same period last year, to $77 million, CEO John Berger doesn’t expect that to hold the company back in 2020.
“We’re prepared to weather any storm and we’re prepared to do that for at least the next two years if not beyond,” Berger said in an interview. “We’re prepared for the worst and hoping for the best.”
Over the year Sunnova expects to add up to 30,000 new customers and end with cash flow between $10 and $20 million. Berger said after the first quarter the company was already close to reaching half of its target revenue and income from system loans for the entire year.
Berger attributed Sunnova's position to its dealer-centric model, conservative approach to forecasts and its recent work to shore up finances through tax equity investment and debt financing.
Sunnova’s confidence is not shared widely in an industry struggling through the pandemic . Among the solar industry, the residential sector has been particularly hard hit by an unprecedented economic slowdown and shutdown orders restricting installations and permitting.
Vivint Solar, SunPower and national leader Sunrun have all revoked their guidance for the year, bracing for the possibility of reduced cash flows and lower installation figures. And those companies, with national footprints, are in many cases better positioned to weather the uncertainty than smaller and local installers.
Growing for now, but bracing for possible virus resurgence
In contrast to those other companies, Sunnova relies on a network of 191 local dealers. But Sunnova appears to have taken the rapid shift to virtual sales channels in stride, growing installations over Q4 2019 and boosting its storage attachment rate to 30 percent, up from 24 percent in Q4 2019. On a Friday earnings call, Berger said the dealer model allowed Sunnova’s partners to “tailor their actions to the local situation.”
After a dip in demand in March and early April, Berger said customer interest began ticking back up last month and has returned to year-over-year growth.
Impacts to Sunnova’s financials and sales may not fully materialize until later in the year, with the pandemic overlapping only partially with the first quarter. The company is girding for potential resurgences of the virus, which is continuing to spread throughout the U.S.
If cases begin to increase exponentially, Berger said the impact on financial markets would likely be severe.
“I don’t think COVID[-19] is going to go away anytime soon,”...