A solar installation company that received a $3 billion partial loan guarantee from the Biden administration declared bankruptcy earlier this week as the solar industry faces uncertain headwinds.

Sunnova Energy said Sunday that it filed for Chapter 11 bankruptcy in South Texas to facilitate a sale of its assets and business operations. The company will continue operating in the meantime as bidders submit proposals.

The bankruptcy declaration came shortly after the Trump administration canceled its loan guarantee in late May after the previous administration agreed to it in September 2023. Sunnova and the Biden administration’s Department of Energy agreed to a $3 billion partial loan guarantee in September 2023 to finance close to 100,000 rooftop solar installations, primarily for lower income households, and to create over 3,000 jobs.

A Sunnova spokesperson told NR the company deobligated the loan guarantee on May 22 and used only $371 million of it. The company disclosed in a March 10-K filing that it was no longer using the loan program and communicated with the Energy Department to conclude it earlier this year.

The spokesperson said that no tax dollars were used because Sunnova had $371 million of bonds trading at par, and stated that Sunnova’s program completed its purpose by providing reliable and affordable power to eligible customers.

The initiative was known as Project Hestia and was billed as the U.S. government’s largest ever commitment to building out solar power. It was conducted through the Energy Department’s Loan Programs Office, a unit that finances energy startups and next generation technology.

“Throughout this process, maintaining continuity of service for our customers is our top priority as we work to secure a long-term solution for our business operations under new ownership,” Sunnova CEO Paul Mathews said in announcing the bankruptcy proceedings.

“I’m incredibly grateful to our dedicated Sunnova team for their hard work and commitment. We have built an innovative power provider, and I continue to believe deeply in the future of our industry and the promise of residential solar and storage.”

Sunnova and Lennar Homes LLC have entered an agreement for Lennar to purchase $16 million worth of assets related to Sunnova’s new homes business unit, the company said.

Sunnova’s debacle resembles the bankruptcy of solar company Solyndra, a firm that received $535 million of loans from the Obama administration and filed for bankruptcy in 2011. Solyndra remains an infamous example of failed green energy policy and government cronyism.

“The green energy disaster in America is only getting larger and more inexcusable,” said Steve Milloy, a senior fellow at the Energy and Environmental Legal Institute. Milloy is a prominent skeptic of green energy and apocalyptic climate change predictions.

“During the Obama era, the Solyndra fiasco only cost $500 million,” Milloy said. “But now, in 2025, the Joe Biden-subsidized Sunnova cost taxpayers $3 billion. Solar power has no purpose and only raises electricity prices.”

The Trump administration’s approach to energy has been to prioritize abundant, reliable sources of power, especially oil and natural gas, rather than intermittent and unreliable renewable sources. Republicans appear set to remove at least some renewable energy tax credits in the “big, beautiful” budget bill currently in the works.

President Biden’s Inflation Reduction Act created new tax credits for electric vehicle and renewable energy production to advance the Democratic Party’s climate agenda, but it did not directly contribute to reduced inflation. The House version of the budget reconciliation bill would end the IRA’s unused credit subsidy funding without reducing the Loan Programs Office’s authority to dish out loans. But, some observers believe ending the credit subsidy could reduce the LPO’s funding, effectively preventing the program from operating.

“Solar company Sunnova—once promised a staggering $3 billion loan guarantee by the Biden administration—has filed for Chapter 11 bankruptcy,” said Jason Isaac, CEO of the pro-fossil fuel American Energy Institute. “That’s nearly six times the taxpayer money wasted on Solyndra under Obama, and yet another indictment of Washington’s reckless obsession with unreliable, politically favored energy.”

“It’s time for government to stop distorting energy markets and let reliable American energy thrive,” he added.

The Trump administration has overturned Biden-era energy regulations and the previous administration’s unpopular electric vehicle mandate in its effort to unleash American energy production. Earlier Thursday, Trump signed congressional resolutions ending California’s own electric vehicle mandate, including one that would ban sales of new gas-powered cars by 2035.

Editor’s note: This article was updated after publication to include comment from a Sunnova spokesperson.