The U.S. solar industry is engulfed in a wave of bankruptcies that is affecting the entire clean energy market. Residential solar installer (NOVA-US) filed for bankruptcy protection on Monday (9th), becoming the second residential solar company to do so this month. Since the beginning of the year, over $14 billion in clean energy and electric vehicle investments in the U.S. have been canceled or delayed.

According to the latest analysis from the nonprofit organization E2, despite the lower installation costs of renewable energy technologies, the Trump administration's anti-renewable energy policies, subsidies favoring fossil fuels, and a high-interest rate environment have posed significant challenges to the clean energy industry. The bankruptcy of Sunnova highlights the dire situation facing the residential solar market. Recently, the House of Representatives passed a bill that could end federal solar tax credits, which were a key part of former President Biden's climate plan. Analysts warn that if this project is cancelled, it could severely impact the residential solar market and lead to a significant reduction in investments.

Phil Shen, an analyst at Roth Capital Partners, pointed out that if the tax credits are removed, the size of the residential solar market could be halved. While Sunnova had been facing debt issues even before Trump took office, weak sales meant it could not meet its debt obligations, and recent collapses in federal support have worsened investor sentiment about its outlook.

In March, Sunnova warned that the company might not be able to continue operations, leading to the resignation of its CEO, John Berger. Before filing for bankruptcy, the company's stock price had plunged over 90% since the beginning of the year, with a market value of only $27.5 million left. Court documents listed the company’s assets and liabilities between $10 billion and $50 billion, with a total debt of $10.67 billion. The company plans to reduce its workforce by about 55% (approximately 718 employees) to cut costs.

Earlier this month, solar financing company Solar Mosaic also filed for bankruptcy, becoming another example of the recent wave of bankruptcies in the U.S. solar industry. Analysts pointed out that the business model of the U.S. residential solar market heavily relies on capital raising and third-party financing. If interest rates rise and subsidies decrease, it can easily fall into a financial crisis.

The Trump administration recently canceled part of a $2.92 billion loan guarantee previously awarded to Sunnova during Biden's tenure, exacerbating the company's cash flow pressure. Moreover, if Congress proceeds with tax reform plans, it could end tax credits for residential solar. Analyst Pavel Molchanov from Raymond James warned that if Congress ultimately approves the cancellation of tax credits, the outlook for the residential solar market after 2026 could become even more severe.

Analyst Joe Osha from Guggenheim Securities bluntly stated that the residential solar industry has always faced financing risks, noting, “This business model relies on raising capital, installing panels on rooftops, and then using cash flow to meet investor expectations. But if the funding chain is disrupted, it can easily fall into crisis.” Market observers have noted that despite the uncertainty of subsidy policies, demand for the U.S. grid is soaring due to the rapid growth of AI data centers, pushing up demand for renewable energy. However, the volatility of subsidy policies and the high-interest rate environment may pose a precarious future for the entire clean energy industry in the U.S.