Although, according to interviewees, the bankruptcy of Sunnova Energy International (NYSE: NOVA), one of the main suppliers of solar equipment and financing in Puerto Rico, will not represent the collapse of the renewable energy sector on the island, its downfall exposes deep cracks in the country’s regulatory framework and public energy policy.

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According to experts consulted by Business, Sunnova’s financial collapse reveals that, at least in Puerto Rico, the problem lies not in the functioning of solar systems, but in the financing model designed to make this technology feasible on the island. As a result, thousands of people are vulnerable to the outcome of the company’s bankruptcy proceedings in the U.S. Bankruptcy Court for the Southern District of Texas.

“Definitely, those individuals or businesses that installed solar systems and contracted financing with this entity will not be affected in their entirety, but obviously there is uncertainty regarding the warranty on that equipment,” said Julián Herencia, executive director of the Association of Renewable Energy Producers (APER).

On June 9, Sunnova filed a voluntary petition under Chapter 11 of the federal Bankruptcy Code, causing uncertainty about the guarantees for equipment installed in approximately 80,000 homes on the island, which in turn were financed by the renewable energy giant. Chapter 11 of the federal bankruptcy code deals with the reorganization or financial restructuring of those who invoke such judicial protection.

Data included in the fiscal plan of the Puerto Rico Electric Power Authority (PREPA) certified by the Fiscal Oversight Board (FOMB) last June shows that there are approximately 117,000 residential roofs with photovoltaic systems in Puerto Rico.

In other words, at least seven out of every 10 solar panel systems installed on residential roofs in Puerto Rico have been installed and/or financed by Sunnova.

As this is the largest bankruptcy in this segment in Puerto Rico, the Senate Transportation, Telecommunications, Public Utilities, and Consumer Affairs Committee has launched an investigation into the possible adverse impact of the process on Puerto Rican consumers, and the legislator promoting the measure, Héctor Joaquín Sánchez, is considering expanding the investigation to analyze the situation of other companies such as Sunrun.

The legislative investigation, however, comes after hundreds of citizen complaints to the Department of Consumer Affairs (DACO) that have been reported by this newspaper.

After the collective trauma caused by Hurricane María due to the collapse of the electrical system, between 2018 and 2023, thousands of households invested tens of thousands of dollars in photovoltaic systems. According to the FOMB, the number of residential photovoltaic systems quadrupled. Now, Puerto Rico is the fifth jurisdiction with the highest per capita solar adoption in the United States.

However, the terms of financial agreements, whether financing or leasing, service contracts are essentially unknown. As a result, among other things, when problems arise, consumers allege breach of contract, fraud, and onerous financing.

According to data from DACO, between January 2024 and May 2025, 661 complaints were filed against solar panel companies in Puerto Rico, of which 400 are active and 261 have been adjudicated.

According to Javier Rúa Jovet, director of public policy for the Solar Energy and Storage Association of Puerto Rico (SESA), Sunnova’s customer warranties remain covered by the company.

“From the perspective of warranties and customer service, that is fully covered, under Sunnova currently and under the successor company, which is supposedly moving quickly,” said Rúa Jovet.

The SESA executive emphasized that the bankruptcy process is expected to be resolved between this month and early August.

For its part, Sunnova Energy Corporation confirmed that its parent company is receiving offers to purchase part or all of the corporation’s assets, including assets and contracts in Puerto Rico.

According to court records, anyone who believes they have a claim against Sunnova has until August 6 to file their claim.

The company told Business that two offers have been received. These will be reviewed by the bankruptcy court on July 25.

Luis Aníbal Avilés, former president of the governing board of the Puerto Rico Electric Power Authority (PREPA), insisted that both DACO and the Department of Justice must intervene in Sunnova’s bankruptcy proceedings to represent the thousands of affected consumers in Puerto Rico.

“They should intervene in the bankruptcy proceedings in Texas on behalf of Sunnova’s debtors (consumers) to negotiate this type of cost,” Avilés said.

In a public hearing before the Senate, DACO Secretary Valerie Rodríguez Erazo mentioned that, after filing for bankruptcy, Sunnova has raised the bankruptcy flag to halt legal proceedings against it, including several of the 26 complaints that remain active with that agency.

However, for Herencia, director of APER, DACO is at least eight years late in intervening in the case, as he asserts that the agency should have regulated the clauses in solar system companies’ contracts long ago so that they would not be detrimental to consumers.

“These clauses should have been reviewed to ensure that these contracts had clauses that protected consumers in the event of a situation like this” of bankruptcy, Herencia said.

Meanwhile, the Department of Justice, although summoned to a public hearing last week, did not participate.

Justice Secretary Lourdes Gómez Torres only sent a statement saying that once the Senate committee completes its investigation, the agency “will be available to receive and evaluate the legal aspects of its findings, if necessary.”

Despite the departure of the main financier of solar panels on the island and the debate surrounding net metering, those consulted agreed—separately—that demand and the pace of growth in the residential and commercial renewable sector will continue at the same speed.

“From the perspective of the dynamism and growth of residential installations, (Sunnova’s bankruptcy) has had no impact,” said Rúa Jovet.

It is estimated that solar panel companies in Puerto Rico continue to install an average of 4,000 systems per month. That capacity already totals about 1,200 megawatts, according to SESA data.

According to professor Avilés, those 1,200 megawatts produced on residential roofs and fed into the electrical system are equivalent to a 300-megawatt power plant, “in other words, we are eliminating an entire plant.”

And the list of households interested in becoming prosumers, according to those interviewed, continues to grow.

Currently, prosumers only pay $4 per month to PREPA. According to the FOMB, even though these households remain connected to the grid and consume energy produced by the state-owned company’s generating fleet, they do not pay the costs of maintaining the electrical grid or subsidies, an equation that is paid for by the rest of the subscribers.

In fiscal year 2024, losses from the net metering program totaled $84 million, according to the FOMB. As a result, PREPA’s certified fiscal plan raises the need to modify the calculations for that program.

“Solar panels are not an individual project, they are a collective project. We are taking advantage of the sun, without it costing LUMA Energy, Genera PR, and PREPA a penny (dollar) because we pay for them privately and create a new plant,” said the professor from the University of Puerto Rico (UPR).

During the Senate hearing, it was revealed that among Sunnova’s main creditors are three Puerto Rican companies owed millions of dollars: Windmar Home, with $54 million; Power Solar, with $24 million; and ISO Solar, with $4 million.

The amount, however, is small in relation to the total debt, as Sunnova seeks to restructure approximately $8.5 billion in debt.

According to SESA, Sunnova’s installers and suppliers in Puerto Rico appear to be prepared to absorb the impact of not recovering all of their debts.

Furthermore, although Sunnova has installed nearly seven out of every 10 photovoltaic systems on the island, there are some 70 small installation and maintenance companies operating in Puerto Rico, according to data from Casa Pueblo.

Hurricane María, which struck almost eight years ago, revealed the critical condition of the electrical system. Despite the million-dollar contracts awarded to private companies such as LUMA Energy, Genera PR, and the latter’s parent company, New Fortress Energy (NFE), the stability and reconstruction of the electrical system, far from improving, seems to be worsening, according to the Puerto Rico Energy Bureau (PREB).

Amid a dispute with the administration of Jenniffer González Colón, NFE—whose corporate bonds were also downgraded to speculative or junk status by Standard & Poor’s—last week withdrew the barge that directly supplies natural gas to two of the island’s main power plants.

Furthermore, Puerto Rico is entering the peak hurricane season without Power Expectations, the bidder with no track record in the energy sector or financial backing that won the contract to provide backup power generation, having made any progress in the process of bringing emergency generators to the island. That competitive bidding process is the subject of a legal dispute by Javelin Commodities Global, the company that was not awarded the contract.

The state of Puerto Rico’s electrical system and the problems surrounding the contractual relationships of the operators or suppliers of that infrastructure, including NFE’s recent deliberate act of cutting off the island’s natural gas supply, have been a cause for concern for analysts at the island’s banking institutions. The issue has come up in recent quarterly financial results conferences held by the country’s major banks.

In addition, PREPA is still in the process of restructuring its debt under Title III of the federal Promesa law.

According to Arturo Massol, director of Casa Pueblo, the government lacks the will to promote renewable energy.

The civic leader believes that as long as dependence on fossil fuels such as diesel and natural gas continues to be encouraged, Puerto Rico’s energy situation will not improve.

“It’s not that we have to be 100% solar (energy), that’s not what I mean. It’s that the sun should be redefined as a primary fuel and we should make the most of it, and then we can talk about gas and other fuels,” Massol said.

Puerto Rico’s public policy establishes that by 2050, all electricity generation must come from renewable sources. To achieve this goal, the Energy Policy Act established certain intermediate targets that have been modified by the current administration.

Last March, Governor Jenniffer González Colón signed Law 1-2025 to eliminate the intermediate targets, but maintaining the goal of 100% renewable by 2050.

The most recent calculation provided by LUMA in a report to the Puerto Rico Energy Bureau (PREB) is that 6% of the island’s power generation comes from solar energy.

However, SESA estimates that solar energy generation accounts for between 16% and 17% of demand, including residential installations and utility-scale facilities, i.e., solar and wind farms, which produce more than five megawatts.

“On the path we are on, which is one of decline, if they intend to re-engineer the problem, there will be an even bigger problem, because many of these facilities were not configured to operate with gas,” Massol insisted.

The outlook for solar energy is complicated by the recent actions of President Donald Trump, who favors the extraction of fossil fuels on US soil and, in contrast, imposes tariffs on the importation of solar panels. Last April, the United States adopted a series of tariffs on solar panels from Southeast Asia, particularly from countries such as Thailand, Malaysia, and Cambodia, under the premise that manufacturing plants operating in those economies are, in reality, subsidiaries or belong to economic interests in China.

“Now more renewable energy is needed than ever before, and therefore stability must be protected. The government must use its tools to protect the economic stability of Sunnova’s participants,” Massol continued.

El Nuevo Día requested an interview with the Puerto Rico Energy Bureau, but at the time of publication, the regulatory agency had not responded.

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This content was translated from Spanish to English using artificial intelligence and was reviewed by an editor before being published.