Solar Company Backed by $3 Billion Biden Loan Hit With Class Action Lawsuit
A solar company that was approved for a $3 billion loan from the Biden administration last year is facing a class action lawsuit from investors who claim the company withheld troubling information about its business practices.
The lawsuit claims that Sunnova Energy "made materially false and misleading statements about its operations," including its allegedly "predatory business practices against disadvantaged homeowners and communities."
The news could raise new questions for the Department of Energy’s Loan Programs Office and Sunnova. The DOE has been facing scrutiny over the $3 billion loan since November, when the Washington Free Beacon reported on consumer complaints that accused Sunnova of ripping off elderly dementia patients.
Republican lawmakers on the Senate and House energy committees raised concerns with the DOE about the consumer complaints in December, noting that the loan is intended to help Sunnova expand its customer base to "disadvantaged homeowners and communities."
The lawsuit says the inquiries led to a "precipitous decline" in Sunnova’s stock price, which tumbled 16 percent the day after Congress sent a letter to the DOE questioning the loan. The suit claims that Sunnova "failed to disclose material adverse facts" about its sales practices, which "subjected the company to a heightened risk of regulatory and/or governmental scrutiny, as well as significant reputational and/or financial harm."
The lead plaintiff in the case, Ricardo Trindade, is an investor who reportedly purchased around 1,800 shares in Sunnova last July. The lawsuit was filed in the U.S. District Court for the Southern District of Texas.
Sunnova’s stock price plunged again in late February, after it announced a $100 million stock offering plan that spooked investors and raised concerns that the company was short on funds. Sunnova also reported a net loss of around $500 million last year, over twice as high as the year prior.
The DOE did not respond to a request for comment. Sunnova did not respond to a request for comment.
The Free Beacon reviewed at least 50 consumer complaints filed against Sunnova in Texas since 2022. Multiple complaints alleged that Sunnova sales representatives persuaded elderly dementia patients, some on their deathbeds, to sign multi-decade solar panel leases.
Terry Blythe, a Texas resident, told the Free Beacon that her father was 86 years old and had been diagnosed with dementia when a door-to-door Sunnova salesman persuaded him to sign a 25-year solar panel lease in 2020. When her father passed away earlier this year, Blythe said she was left saddled with the $34,000 contract.
Another Texas resident, Mary Loller, told the Free Beacon that her elderly father was senile and had been given months to live when a door-to-door Sunnova salesman sold him a $60,000 solar system for his mobile home last year.
"My dad told [the salesman] at that time he was on hospice and dying. And basically, he wasn't in his right mind," said Loller.
In the wake of the report, Sen. John Barrasso (Wyo.) and Rep. Cathy McMorris Rodgers (Wash.), the top Republicans on the Senate and House energy committees, asked the DOE to turn over records regarding the loan to Sunnova.
The inquiry into the Sunnova loan—the largest federal loan ever approved for a solar company—is part of a broader congressional probe into potential conflicts of interest at the DOE’s Loan Programs Office. The DOE office, which controls a $400 billion funding spigot authorized by Biden-backed spending bills, is run by former green energy executive Jigar Shah.
Before joining the Biden administration, Shah founded and ran a nonprofit trade association called Cleantech Leaders Roundtable, which has continued to set up meetings between him and loan-seeking companies. Cleantech Leaders’ former board chair, Anne Slaughter Andrew, also sits on the board of Sunnova.
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