Sunnova's single-day plunge of 64% triggers a sector avalanche, as the U.S. photovoltaic industry faces its "darkest hour."

According to Zhitong Finance APP, Sunnova Energy (NOVA.US) fell 64.25% on Monday, dragging down the entire U.S. solar sector. The company reported a larger-than-expected loss and warned of significant uncertainty regarding its ability to continue as a going concern; less than a week ago, the largest solar manufacturer in the U.S., First Solar Inc., indicated that customer delays were becoming increasingly severe, while the largest residential solar company, Sunrun Inc., also stated that it expected installation volumes to remain flat this year. This seems to indicate that the U.S. solar industry is facing its biggest challenge since entering the mainstream market over a decade ago.

Other solar-related stocks also fell: Maxeon Solar Technologies (MAXN.US) dropped 20.9%, Sunrun (RUN.US) fell 14.9%, SolarEdge Technologies (SEDG.US) decreased 14.3%, FTC Solar (FTCI.US) declined 7.9%, Enphase Energy (ENPH.US) fell 7.8%, First Solar (FSLR.US) dropped 6.3%, Shoals Technologies (SHLS.US) decreased 4.6%, and Nextracker (NXT.US) fell 3.6%.

The rooftop solar business has been hit by high interest rates and reduced incentives in various states. Now, former President Trump's opposition to green energy initiatives means that large project developers face new risks, including potential permitting obstacles, which cast a shadow over growth prospects. Trump's attempt to repeal former President Biden's Inflation Reduction Act has also raised concerns among some investors that key federal financial incentives may disappear.

At the North America International Solar and Energy Storage Exhibition (Intersolar & Energy Storage North America) held last week in San Diego, attendees warned that the uncertainty currently plaguing the industry could persist for much of this year, or at least until the Trump administration provides clearer signals regarding its next policy moves.

Tom Starrs, Vice President of Government and Public Affairs at EDP Renewables North America, stated at the conference: "During this period, the market will be in chaos, and this chaos is man-made. Uncertainty brings risk, and risk suppresses new investment."

Solar energy has long been viewed as a key solution to meet growing electricity demand and limit global emissions—the industry provided the most new generating capacity in the U.S. last year and is expected to do so again this year. However, as global temperatures continue to break records, electricity demand may see its largest increase in decades, driven by the AI boom. Meanwhile, the Trump administration is quickly positioning natural gas as the dominant new power supply, which threatens both solar's market control and the climate fight The residential solar industry is currently facing the most severe impact.

On Monday, Sunnova stated that its cash inflows are insufficient to meet obligations and has suspended its performance guidance. The company indicated that management has developed plans to address risks, including debt refinancing, obtaining additional debt financing, cutting expenses, and modifying dealer payment terms. The company also mentioned that it has hired a financial advisor to help "manage certain aspects of debt management and refinancing," but did not disclose specific names.

Spokesperson Russell Wilkerson stated, "We are confident in managing our obligations and laying the foundation for Sunnova's long-term success." He pointed out that the company has nearly $550 million in cash on its balance sheet, has signed a new $185 million loan agreement, and recently announced a restructuring plan that will cut costs by approximately $70 million. He added, "These initiatives will put the company in a more favorable position."

Sunrun lowered its cash generation guidance for this year last week.

After a nearly 20% decline in installation volume in 2024, analysts have downgraded their forecasts for residential solar installations in 2025. Meanwhile, the Trump administration and Congress are considering cuts to the tax credit policies that companies like Sunnova rely on to generate cash, in addition to the loans and grants supported by former President Biden's Inflation Reduction Act, which have also been frozen by the federal government.

At the same time, First Solar CEO Mark Widmar stated during last week's earnings call that energy forecasts indicate that the U.S. will need an additional 128 GW of generating capacity by 2029 to meet peak summer electricity demand. Analysts from energy research firm Wood Mackenzie predicted in a report at the Intersolar conference that even with new natural gas power plants, the electricity demand gap in the U.S. will still reach about 114 GW by 2030.

Leaders in the solar industry believe that the sector is still very well-positioned to meet the growing electricity demand, especially considering its rapid expansion capabilities. Widmar noted that large nuclear power plants take more than a decade to come online, while natural gas generation capacity may take five years to scale up, and due to supply chain constraints and turbine shortages, costs will still be higher than five years ago.

However, attending developers also indicated that their interactions with government agencies have been less responsive. TD Cowen analyst Jeff Osborne, who attended the event, stated that this could slow down project progress