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U.S. Residential Solar Provider Sunnova Preps for Green Bond

DRY LAKE VALLEY, NEVADA - JUNE 28: Solar panels from the 100-megawatt MGM Resorts Mega Solar Array are shown after it was launched on June 28, 2021 in Dry Lake Valley, Nevada. The project sits on 640 acres of desert about 30 miles north of the Las Vegas Strip in the Dry Lake Solar Energy Zone. Its 323,000 7-by-3-foot solar panels are forecast to generate about 300,000 megawatt-hours - about 35 percent of MGM's annual electricity use in Las Vegas - making it the hospitality industry's largest directly sourced renewable electricity project in the world. All the solar power generated is scheduled for use by MGM Resorts. On hot summer or spring days, the array can produce up to 90 percent of the daytime power needs of MGM's 13 Las Vegas properties which is equivalent to the power used by about 27,000 average U.S. homes annually. (Photo by Ethan Miller/Getty Images) Photographer: Ethan Miller/Getty Images North America

(Bloomberg) —

Sunnova Energy International Inc., one of the biggest U.S. residential-solar companies, is looking to tap into the green-bond market amid a surge of homeowner demand for clean power.

Houston-based Sunnova has completed some steps needed before issuing a green bond, including launching a green-financing framework, Chief Financial Officer Robert Lane said on the company’s earnings call last week.

“Bottom line here is we are locked and loaded,” Lane said, adding that it’s not a formal announcement of an offering. “You should expect to see us in the market very soon.”

Sunnova priced a $212 million solar loan asset-backed security last month, which Lane said in a release should also help accelerate the issuance.

The sale would be the first syndicated green corporate bond in the U.S. residential-solar market, according to data compiled by Bloomberg. Sunnova said it intends to use proceeds from green bonds to finance or refinance existing or new eligible projects, including new home-solar systems, according to the framework.

“Look for a green-bond issuance as a near-term catalyst to support the stock,” said Philip Shen, an analyst at Roth Capital Partners, in a research note.

New issuance of green, social, sustainability and sustainability-linked bonds from corporations and governments worldwide is at a record $614.5 billion so far this year, according to data compiled by Bloomberg. Bankers are bracing for an even busier second half.

READ: ESG Bond Sales Sprint to $1 Trillion as Investors Force Change

The U.S. Senate is heading toward passage this week of a $550 billion infrastructure bill that would provide the biggest infusion of federal spending on public works in decades and mark a major milestone for President Joe Biden’s economic agenda. The package would provide broad subsidies for roads, water projects and power grid upgrades, which investors expect would ultimately boost the environmental, social, governance debt market.

The U.S. last year installed a record 19.2 gigawatts of solar generating capacity, according to the Solar Energy Industries Association and Wood Mackenzie.

–With assistance from Daniel Covello.

© 2021 Bloomberg L.P.

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