Sunnova Energy CEO Sees Opportunity Ahead for Solar

Sunnova Energy International CEO John Berger envisions every home becoming a nanogrid, or a small utility, capable of either standing on its own or being part of a centralized grid.

Imagine the home as a fueling station of sorts, powered by the sun.

“You might want to think of us as a wireless power company,” he explained March 2 during the UT Energy Week conference. “That’s the vision. How do you have solar, batteries, maybe a generator, load management, EV charging, other technologies all wired together, if you will, with software with a single app,” backed by a company that can diagnose problems—including remotely—and fix them?

It’s a different business model, resembling a distributed utility versus the centralized utility, he said. It’s also an opportunity for the solar energy sector, including Sunnova, a Houston-headquartered provider of residential solar and energy storage service.

Technology advances are opening more doors for the solar sector, and more incentives could give it another boost as the world transitions to cleaner forms of energy.

Much focus has been on how to replace vehicles with internal combustion engines with EVs and putting charging stations along the highway, or setting up wind farms in place of coal plants, he said. However, new technologies—especially solar and batteries—are opening new possibilities for the sun as a distributed fuel source with efficient technology converting raw Btu, sunlight, into electricity.

“I’m quite confident we’ll see a lot of innovation and change as we move forward in this energy transition,” Berger said.

In the last 10 years, technology has steadily progressed, helping to make solar more cost-competitive.

“It’s been a general trend that you get about 10 watts of energy density pick up on solar modules every nine months, maybe 12 months. Last year, evidently it was 50 watts,” Berger said before turning to advances in storage. Among these is Tesla’s Powerwall, an integrated battery system that stores solar energy for backup when the grid goes down. The system, as described by Tesla, detects outages and automatically recharges with sunlight.

Technological advances have also been made in lithium-ion battery chemistry as well as high-capacity batteries having longer discharge times.

All of which could boost the attractiveness of the role of solar as a distributed energy resource, including in making bi-directional charging—powering, for example, an EV from a home or vice versa—a reality. Berger recalled Ford’s Super Bowl commercial featuring the F-150 Lightning charging a home that lost power.

“It’s definitely part of what we’re working on,” Berger said. Sunnova announced in October 2021 a partnership with ChargePoint Inc., an EV charging network provider, to offer Sunnova customers EV charging service.

Solar additions could account for about half of new electric generating capacity this year, according to the U.S. Energy Information Administration. Utility-scale solar capacity jumped by about 13.9 gigawatt (GW) in 2021 with forecasts indicating 21.8 GW and 24.1 GW of added capacity in 2022 and 2023, respectively. Small-scale solar capacity could rise by 4.4 GW annually this year and in 2023, up from 32.7 GW in 2021.

This comes as costs for solar photovoltaic (PV) systems become more competitive with other energy sources. Data from Deloitte show the costs have declined 85% over the past decade. The firm said it expects the solar industry to expand community solar projects to new markets, explore new configurations and business models, and grow solar-plus-storage buildouts.

Sunnova, which reported in late February its year-on-year revenue rose to nearly $242 million, brought into service more solar energy systems last year and acquired Lennar Corp.’s residential solar platform called SunStreet. Since its formation in 2012, the company has grown to serve roughly 200,000 customers in the U.S. and the Caribbean region. It aims to double its customer count by year-end 2023.

Like others in the energy space, the company continues to navigate regulatory, economic and geopolitical uncertainty that could impact the business.

On the regulatory front, Berger said tariffs, such as the PV tariffs, don’t work; however, incentives, including manufacturing subsidies such as for semiconductors, could. There appears to be bipartisan support, he added, showing hope in the so-called COMPETES Act. The legislation aims to combat antidumping and countervailing duties.

“Right now, you’re seeing utility scale solar and storage drop from the levels of the last year under the Trump administration tremendously. I think part of this is because of tariffs on the solar panel side of things,” Berger said. “We’ve been able to navigate that. There’s economic reasons why we can afford to pay more for the panels and so forth than the utilities, but it’s been a real problem.”

Rising oil and gas prices and the invasion of Ukraine by Russia, which he called a war machine powered by oil and gas, are adding another dimension to the energy transition and the need for diverse, adequate energy supplies, he added.

Crude hit $111/bbl this week with Henry Hub surpassing $4.70/MMBtu.

“Energy is becoming much more expensive. … We expect to see significantly higher utility rates in Texas and beyond as we move forward into the year,” Berger said. “We’ve seen some mind-popping rate increases of 20-plus percent already and the year has just gotten started.”

These issues highlight how risky the global energy business is, he said, and the need to accelerate the energy transition and step up self-reliance to meet energy needs.

“I predict the next 10, 15 years are going to be really a golden age for energy transition,” he said.