Rooftop

SunPower no longer supporting solar lease PPAs, sales, and installations (UPDATE: Renova Energy pauses operations)

SunPower no longer supporting solar lease PPAs, sales, and installations (UPDATE: Renova Energy pauses operations)
(A solar array installation at the University of California-Davis. Image: Sunpower Corp.)

Update 7/22/24: SunPower partner Renova Energy has sent a letter to its customers saying it will temporarily cease its business operations in California and Arizona. Renova is the largest solar company in the Coachella Valley, employing hundreds of people.

“Over the past several years, some of you have noticed and reached out to me regarding longer wait times, communication and technical difficulties, and confusion related to our partnership with SunPower,” Renova CEO Vincent Battaglia wrote. “It was not a healthy path that we were going down with them, and your concern, both from the outside and the inside made me adjust our processes always to accommodate their inadequacies as a solar and battery technology and finance provider.”

Battaglia contends the decision to halt installation, service, and rooftop work will “be remedied over the next few weeks.”

“Once our partner/debtors take proper financial steps, I feel confident that we can properly serve our desert communities,” Renova’s CEO adds, asking for patience through this process.

Other notable companies with SunPower investment include EmPower Solar, Freedom Solar Power, and Sea Bright Solar.

It has been a rough year for SunPower, and it doesn’t appear the company is out of the woods yet. In a letter to dealers, the residential solar technology and energy services provider announced it will no longer support new leases, PPA sales, and new project installations of these financing options.

“This decision was not made lightly, and we continue to consider options to support our mutual customers and our collective pipeline of business,” SunPower said in the letter, which was included in an industry note from ROTH Capital. “As a result, we will deactivate Lease and PPA offerings EDDiE, cease countersigning new agreements, and all active unsigned proposals will expire. Additionally, all new shipments and project installations will be halted.”

SunPower’s current conundrum can be traced back to late 2023, when the company announced it had breached a credit agreement due to late financial reporting caused by a subsidiary’s inventory reporting error, per Reuters, which allowed its lenders to immediately demand the repayment of its $65 million debt. The company soon received a waiver from its lenders preventing technical default and providing $75 million in funding, extending the timeframe for repayment.

In February 2024, SunPower said it had received additional waiver extensions from Atlas Securitized Products Holdings, L.P., and Bank of America, providing for the extension of the latest temporary waivers until February 16. This was soon followed by the announcement that it raised $175 million in capital financing through the second-lien term loan.

By the end of February, former SunPower CEO Peter Faricy had departed the company. In March, SunPower said it received a notice from the Nasdaq indicating that the company was not in compliance with a Nasdaq listing rule after a delay in filing a form.

In April 2024, Thomas Werner, SunPower’s Principal Executive Officer and Executive Chairman, wrote a letter to SunPower employees explaining that in order for the company to “achieve financial viability,” it needs to transition “away from areas where we have been unable to sustain profitable operations, and improving financial controls.” In other words, layoffs were coming.

“As such, we are moving to a low fixed-cost model that we believe we will be able to better flex when the market is up or down,” Werner said in the letter. “Specifically, we are winding down our SunPower Residential Installation (SPRI) locations and closing SunPower Direct sales. We are also reducing our workforce to better align our business with our new focus. With this shift, we will reduce our workforce by approximately 1,000 people in the coming days and weeks.”

Last month, SunPower announced it drew upon the $50 million second tranche of the $175 million second lien term loan from Sol Holding that it announced in February. As a result of drawing upon the second tranche under the second lien term loan, SunPower agreed to issue warrants to Sol Holding to purchase up to approximately 33.4 million shares of common stock at an exercise price of $0.01 per share. 

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