The US solar industry faces a wave of bankruptcies that is impacting the entire clean energy market. Residential solar installer Sunnova Energy International Inc. (NOVA-US) filed for bankruptcy protection on the 9th of this month, becoming the second residential solar company to do so within the month.

According to the latest analysis by the nonprofit organization E2, despite the lower construction costs of renewable energy technologies, the clean energy industry faces significant challenges due to the Trump administration's anti-renewable energy policies, subsidies favoring fossil fuels, and a high interest rate environment.

Sunnova's bankruptcy highlights the dire circumstances of the residential solar market. Recently, the House of Representatives passed a bill that could terminate federal solar tax credits, a crucial component of the climate legislation introduced by former President Biden. Analysts warn that the cancellation of this credit would severely impact the residential solar market and result in a substantial decrease in investment.

Although Sunnova faced debt issues before Trump's presidency, the soft sales made it impossible for the company to repay debts on time, and the recent halt of federal support has led investors to be more pessimistic about its future. In March of this year, Sunnova warned that it might not be able to continue operations, and shortly thereafter, CEO John Berger resigned. Before filing for bankruptcy, the company's stock price had plunged more than 90% since the beginning of the year, leaving its market value at just $27.5 million.

Sunnova disclosed in court filings that its assets and liabilities range from $10 billion to $50 billion, with total liabilities reaching $10.67 billion. The company also plans to cut approximately 55% of its workforce (about 718 employees) to reduce expenses. In addition to Sunnova, Solar Mosaic, a solar financing company, also filed for bankruptcy earlier this month, marking another case in the recent wave of solar industry bankruptcies in the US.

Analysts point out that the business model of the US residential solar market heavily relies on capital raising and third-party financing. When interest rates rise and subsidies decrease, it becomes easy to fall into financial distress. The Trump administration recently canceled part of the loan guarantees previously granted to Sunnova by the Biden administration (amounting to $2.92 billion), increasing the cash flow pressure on the company. Furthermore, if Congress continues to advance tax reform plans, residential solar tax credits could be eliminated. Analyst Pavel Molchanov from Raymond James warns that if Congress eventually passes the cancellation of these credits, the prospects for the residential solar market could become even more severe after 2026.

Analyst Joe Osha from investment bank Guggenheim Securities stated that the residential solar industry has always faced financing risks, saying, 'This business model relies on capital raising, installing panels on rooftops, and then meeting investor expectations through cash flows. However, whenever the cash chain is in trouble, it becomes easy to fall into crisis.'

Market observers indicate that, besides the uncertainty of subsidy policies, the demand for the US power grid is surging due to the rapid growth of AI data centers, which in turn boosts the demand for renewable energy. However, the turbulence of subsidy policies and the high-interest rate environment may lead the entire US clean energy sector into a precarious future.