Sunnova Energy (NYSE:NOVA) experienced a 16% drop in its stock value at the time of writing following serious concerns raised by leading congressional Republicans. Cathy McMorris Rodgers, Chair of the House Energy and Commerce Committee, and John Barrasso, Senate Energy and Natural Resources Ranking Member, sent a probing letter to the Department of Energy’s Loan Programs Office. They expressed alarm over Sunnova’s $3 billion partial loan guarantee for Project Hestia, citing numerous consumer complaints and reports of unethical sales tactics.
The letter points to instances where Sunnova allegedly pressured vulnerable elderly homeowners, including those in poor health, to sign expensive long-term contracts, sometimes just before their passing. These contracts, often worth tens of thousands of dollars, have led to substantial difficulties for families. Reports also include allegations of maintenance delays and predatory sales strategies.
Notably, the controversy extends to Puerto Rico, where over 1,000 complaints were filed against Sunnova for misleading claims and failure to deliver promised energy bill savings. The Energy and Commerce Committee members have requested detailed documentation from the Loan Programs Office by December 21, 2023, in light of these allegations. Project Hestia, touted as the Federal Government’s largest commitment to solar power, aims to provide loans for clean energy systems to 75,000-115,000 homeowners, particularly in disadvantaged communities and Puerto Rico.
What is the Forecast for NOVA Stock?
Turning to Wall Street, analysts have a Strong Buy consensus rating on NOVA stock based on 15 Buys, five Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. After a 200% rally in its share price over the past year, the average NOVA price target of $18.18 per share implies 78% upside potential.