10 Worst Performing Solar Stocks to Buy Now

8. Sunnova Energy International Inc. (NYSE:NOVA)

6-Month Performance as of February 27: -84.08%

Number of Hedge Fund Holders: 19

Sunnova Energy International Inc. (NYSE:NOVA) provides energy as a service in the US. It offers electricity, operations and maintenance, and other services, and operates a fleet of residential solar energy systems with a generation capacity of ~2,292 megawatts for over 419,000 customers.

In the first nine months of 2024, it added 76,600 customers, with 60,000 being solar customers, emphasizing high-margin and high-credit-quality growth. The company is increasing its cash flow by maximizing a tax incentive called the Investment Tax Credit (ITC). By requiring US-made parts in new deals after September 1, 2024, it has boosted its average ITC rate to 42.2% in October, which is a 17% increase. This directly translates to more government tax credits, with each 1% increase in the ITC rate adding roughly $50 million annually to the company’s cash flow. It aims for 45% in 2025 and 2026.

It’s aggressively cutting costs and reduced O&M expenses by 48% and G&A by 5% as a percentage of revenue in FQ3 2024. Looking ahead, Sunnova Energy International Inc. (NYSE:NOVA) projects $359 million in unrestricted cash generation for 2025, and $400 million for 2026. It anticipates adding 110,000-120,000 gross customers in the full year 2024, focusing on profitability over volume.