The litigation focuses on Sunnova’s disclosures about its business practices and the recent award by the Department of Energy (DOE) Loan Programs Office (LPO) of a $3 billion partial loan guarantee pursuant to a new solar loan channel named Project Hestia.
The complaint alleges that Sunnova made misleading statements and failed to disclose that: (1) it routinely engaged in predatory business practices against disadvantaged homeowners and communities, the same groups that Project Hestia was purportedly intended to benefit; and (2) the foregoing conduct subjected it to a heightened risk of regulatory and government scrutiny, as well as significant reputational and/or financial harm.
That loan guarantee and associated benefits to Sunnova were all placed at risk of not coming to fruition on Dec. 7, 2023, after the Chair of the US House Energy and Commerce Committee and the Ranking Member of the US Senate Energy and Resources Committee sent a letter to the LPO Director (Jigar Shah) regarding “disturbing reports” about Sunnova and demanding additional information and documents by no later than Dec. 21, 2023.
The Chair and Ranking Member wrote that they were alarmed about: (1) “recent, credible reports that Sunnova has racked up numerous consumer complaints, including those alleging troubling sales practices, such as Sunnova pressing elderly homeowners in poor health to sign long-term contracts costing tens of thousands of dollars[;]” (2) “predatory sales strategies[;]” and (3) “[a]dditional reports suggest these troubling reports are not isolated incidents”.
This news sent the price of Sunnova shares down $2, or about 16%, on Dec. 8, 2023.
