Allen & Overy Advises the U.S. Department of Energy on a USD3 billion Loan Guarantee to Sunnova Energy International
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Allen & Overy (A&O) announced today that it advised the U.S. Department of Energy (DOE) on the USD3bn Loan Guarantee to Sunnova Energy International to support solar loans originated by Sunnova under a new solar loan channel named “Project Hestia,” which will make distributed energy resources (DERs), including rooftop solar, battery storage and virtual power plant (VPP)-ready software available to more American homeowners. The DOE loan guarantee agreement is issued pursuant to Title XVII of the Energy Policy Act of 2005.
Project Hestia is expected to provide disadvantaged homeowners and communities with increased access to clean, flexible power via Sunnova services by indirectly and partially guaranteeing the cash flows associated with consumers' loans in Sunnova’s securitization transactions. The loan guarantee enables Sunnova, a leading Energy as a Service provider, to provide loans for clean energy systems for approximately 75,000 to 115,000 homeowners throughout the United States, including its territories. Each energy system will include access to Sunnova’s purpose-built VPP technology, accessible by smart phone or other personal electronic device. This approach is expected to expand access to Sunnova’s adaptive energy platform, lay the foundation for future VPP activities, decrease greenhouse gas emissions and increase the demand response benefits of residential power systems.
“We believe strongly in DOE’s mission to support new energy transition technologies and to provide more equitable access to power,” said Sami Mir, Washington, D.C. partner in A&O’s global projects, energy, natural resources and infrastructure (PENRI) practice. “Our team is proud of our ongoing work with DOE team and is thrilled to have advised DOE on this first-of-its-kind securitization transaction.”
Sunnova also seeks to provide loans to homeowners in energy-burdened communities. Sunnova will aim to provide at least 20% of Project Hestia loans to homeowners in Puerto Rico. All installations in Puerto Rico will include both solar and battery storage. The island has a history of severe weather events that have resulted in frequent and sustained power outages. Rooftop solar-plus-storage systems have demonstrated their ability to provide power to homes during severe weather events, often when grid infrastructure on the island is damaged.
The A&O team consisted of Sami Mir, John Hwang (Partner, New York), Rebecca Stubbs (Senior Counsel, Washington, D.C.), Derek Poon (Senior Counsel, New York) and Ari Yannakogeorgos (Associate, New York,).