By Wolf Richter

Written by Wolf Richter

Estimated Reading Time: 3 minutes

Editors’ Note: It is a strange business model when the price of producing the product goes down and the usage increases, but many companies providing the service go bust. What is going on? Likely usage was forced fed through both subsidies and propaganda, and costs went down because subsidies finally allowed the industry to reach scale. However, the model was unsustainable because it was force-fed by ideology and massive government subsidies. The subsidies hid the actual costs, and the removal of subsidies reveals the underlying weakness. When the government makes “choices”, these are not the voluntary choices of the marketplace. When the government creates subsidies to change the cost differential among alternatives, those are not “true” costs, but contrived price structures that don’t reflect reality. Costs for solar energy often omit the cost of backup generation (usually natural gas), which must be installed to supply the base load when the sun is not shining or the wind is not blowing. Moreover, the motivation for “alternative energy” is based on a myth that human-generated C02 is the primary cause of climate change from time to time. To borrow a phrase from the environmental movement, government interference in energy markets is UNSUSTAINABLE!

The stock market’s solar craziness gets cleaned out stock by stock, even as solar-power generation continues to soar

Sunnova Energy International, which booked huge losses every single year selling residential solar energy equipment and services – $1.61 billion in total losses since 2017 – said on Sunday that it and its subsidiaries Sunnova Energy Corporation and Sunnova Intermediate Holdings, LLC, filed for Chapter 11 bankruptcy in Texas. Its subsidiary Sunnova TEP Developer had already filed for bankruptcy on June 1. In the filing, it said that it would continue operating as “debtor in possession” while trying to sell some of its assets under court supervision.

The marvel was of course its stock [NOVA] during the free-money pandemic. It went public in July 2019 at $12 a share and traded around $10 until the free money during the pandemic came along and caused the share price to spike five-fold to $55 by February 2021. That month, right at the peak, the Texas-based company acquired SunStreet from homebuilder Lennar, and Lennar washed its hands of it. Then the shares went to heck and were inducted into our pantheon of Imploded Stocks (minimum requirement: -70% from peak).

Shares last traded on Friday at 22 cents. The company said it expects to be delisted from the New York Stock Exchange and that holders of its shares “could experience a significant or complete loss on their investment, depending on the outcome of the Chapter 11 Cases” (data via YCharts).

During the years of losses, the company racked up $8.5 billion in debt, as per its last financial statement through December 31 – it failed to file its Q1 financials – amounting to over 10 times its 2024 revenues of $840 million.

In addition, the company had $2.1 billion in other liabilities, for total liabilities of $10.7 billion, as of its year-end financial statements.

Other solar stocks have collapsed as well. But solar power, in terms of electricity generation, keeps rocking higher.

Solar power generation surged 26.9% in 2024 to 303,167 GWh, utility scale and rooftop solar combined. This is not “capacity” but electricity generated and used. Solar’s share ballooned to nearly 7% of the total electricity generated in 2024, surpassing hydropower [my report with charts: US Power Generation by Source in 2024].

In addition, utility-scale batteries have become a profitable way of arbitraging the highly volatile electricity spot prices that can spike during high-demand hours and plunge during low-demand hours, often on the same day. In this arbitrage, batteries work well with big solar installations, buying electricity when the price is low, and selling it often just hours later when the price is high. And batteries work well with small-scale solar too. Some of the solar companies here are involved with both solar power and energy storage.

There are up-front costs with solar power, as there are with every power plant. When it comes to energy, there are no free lunches. But with solar, the “fuel” is free for the life of the installation, and the math has been getting better as the price of photovoltaic panels has come down over the decades.

Big utilities are all over solar power, as are big equipment providers, such as Tesla. But these eight Imploded Stocks here are specialized players, many of them with over 1,000 employees at the peak, and with hundreds of millions to several billion in annual revenues.

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