Interview with Meghan Nutting of Sunnova | Sunnova’s $3B Loan Guarantee from the DOE & Working with Tribal Nations

Catherine: Hi, I’m Catherine McLean, Founder and CEO of Dylan Green. Today we are at the WRISE Leadership Forum in Minneapolis. And I have Megan Nutting joining me live from my hotel room. And Megan is the Executive Vice President of government regulatory affairs at Sunnova Energy. And normally in Denver?

Meghan: I normally am there but now we’re in Minnesota. It’s chili.

Catherine: I went to the twins game last night. Good for me. Not so good for them. But anyway. So can you introduce yourself and tell us a bit more about your current role?

Meghan: Sure, I’d be happy to. I work for a company called Sonnova which is a residential and commercial solar and storage services provider so that means basically, if you have a rooftop, we’ll help you get solar and put it on there. We’re based in Houston, which is an interesting place for a solar company to be based. But we operate in something like 46 markets across the US that includes Guam, Saipan, Puerto Rico, DC and the US Virgin Islands and the rest are states.

We make sure people have access to solar and we finance it for them, we operate and maintain it for them. And then we work with a network of local dealers, so about 1500 dealers all across the country, so small business owners that do the sales and installation side of the work. So we support their growth and their success. And they work directly with customers on our behalf.

Catherine: Cool. And how did you transition into clean tech? I think you entered Cornell as a theater major, which is just an obvious entry path. Then you served as the Deputy Press Secretary for a senator, as well as a World Bank consultant. So how’s the solar industry and policies specifically?

Meghan: That’s a really good question when you put it like that. I loved theater in high school. That was one of my favorite things to do. And so entering college, I wasn’t sure what I wanted to major in. And so I figured maybe try to pursue something I really, really loved. I also, at the same time, loved biology. So there was that too, so I ended up majoring in environmental biology and doing theater on the side and sort of taking some classes in that. And I have no regrets about that. I feel like a lot of the work I do today is a lot of public speaking and a lot of explaining complex issues to people and being able to be entertaining and concise and clear and connect with people is something that’s critical to the job I do and so I have no regrets about any theater that I’ve studied or done in my life.

Catherine: And also, when I think of politics, I think of theater.

Meghan: Totally theater. It’s a lot of theatrics and it are they really those people or are they playing a role. Right, exactly. I mean, it’s so true. And then so I studied environmental biology and then moved to DC where I thought the seat of power was and so that’s how I ended up working for Olympia Snowe, who is the senator from Maine, which is where I grew up, always wanting to focus on environmental issues on climate change.

And so I was working at the World Bank when I saw this job posting for a company I’d never heard of called Solar City back in 2009. And it was sort of unclear what was going to happen with the solar industry. It was pretty nascent. Was it going to survive? Was it going to be a thing? And they offered me a policy role? And I said, Okay I’ll take a chance and I’ll learn about energy because this is, this is a way to proactively address climate change. Rather than talking about policies and sort of talking around it here is a company deploying and taking action. And so I moved over to rooftop solar policy, and I haven’t looked back since.

Catherine: Great. So the US Department of Energy Loan Programs Office, recently signed a historic agreement partially guarantee over $3 billion in loans originated by Sunnova, through its new solar loan channel project. Hestia. Yes. Can you share more about this and the impact you think it will have for disadvantaged homeowners?

Meghan: Yeah, this is a huge, a huge win and a huge program and a huge vote of confidence from the Department of Energy. This is the first distributed solar loan guarantee that they’ve provided. And to me, it’s an indication that they see what a critical role distributed solar can play in meeting energy needs and meeting reliability and in helping lower income families afford their electricity bills. So what this is, it basically is a guarantee by the federal government so it allows our investors to be more comfortable with the lending that we’re doing because every time we put solar on someone’s roof we do it through a lease, a loan or a PPA. In this case, it would be a loan and so we have to raise money from our investors and will have to be comfortable then with the credit profile of the customers that we have. This guarantee basically has the government serve as a credit backstop and say that you can now serve lower credit score customers and we will take the first loss on any defaults. And so our investors say, Great, this is a good way to get customers. We don’t have to take so much risk on defaults. The government isn’t taking 100% of the risk. We’re taking some as well. There’s a chance we could never we’ll never use any of this money. There’s totally a chance that there will be no defaults and we’ll be we’ll be you know, we won’t use a credit backstop, it’s a safety net.

And so we’ll be using this to predominantly serve lower credit score customers. Obviously it’s not a perfect Venn Diagram of low income and low credit score. Many low income families have amazing credit. Many higher income families don’t have as good credit. But to the extent that there is an overlap, that is who will be serving the end 20% of this fund will go towards serving Puerto Rico, which is basically in its entirety, considered a low income territory, according to the energy markets tax credit. And because of the work we’ll be doing, trying to serve lower income communities and lower credit score customers. The DoD considers this part of the justice 40 initiative that the federal government is focused on. So this is one tool in the toolbox for that.

Meghan: That’s great. That’s such an accomplishment. $3 billion. just mind boggling when you think about these number. It blows my mind. So I know Sunnova has worked with tribal nations. So this is something I’ve been trying to focus more on the podcasts lately. And something I’m seeing some real traction with which is really exciting. So you’ve been working with the Navajo Nation in partnership with empowered by light to make solar more accessible. Can you talk about this project and Sunnova’s work with indigenous people more broadly. We worked closely with the Navajo Nation and Empowered By Light to put solar and storage on the Hard Rock chapterhouse chapterhouse is sort of a meeting location for the community and we wanted to lower their electricity bills we wanted to provide for liability in case the power went out. This is critical because 14,000 Navajo families don’t have access to electricity they live connected to the grid without access.
At the same time, they’ve been very vocal about not allowing coal mining on their land and good for them for doing. There’s a really good synergy between the work we do and the needs of I think a lot of tribal communities in that we promote energy, independence and democratization. We want you to produce your own energy we want you to have reliable energy we want you not to have to depend on anybody, but your own systems and your own your own solar your own battery. And so that’s really resonated with a lot of the tribes we’ve spoken to. So last month, we were invited to participate in a symposium put on by the Alliance for tribal clean energy. We spoke on a panel there we did a cultural training. We listen to what different tribal nations are interested in what they need for their communities what they’re looking for. It’s obviously different if you’re if your tribe based if you’re the Penobscot in Maine or the pachanga and California right your needs are the Navajo and in Arizona your needs are different but the the broader context is we want them to be able to control and use their own energy and not have to depend on on outside forces.
So we’re working right now on becoming a preferred provider. Through the Alliance for tribal clean energy. We’re really interested in you know, content, we’re having conversations with a number of tribes. But the hardrock chapter house was sort of one of our first entries into this and and we think it was a huge success. It was a great experience.

Catherine: Sunnova and Franklin, who recently launched a first of its kind 200 volt Compliant batteries helped deploy energy storage for multifamily homes. Can you talk about this partnership and why do you think it’s significant?

Meghan: Yeah, I’m a huge, huge fan of Franklin, who I really liked their battery technology and our Sunnova new homes division is the preferred and only provider of this new technologies for multifamily homes. It’s called the a power battery, which you can connect in parallel to form you know, a by a bigger battery, and that is all controlled by something called an a gate, which is a management software and you can put a bunch of a gates on a multifamily property. So this technology allows multifamily homes you know, when you have different meters but you sort of all in the same building to still access battery storage and solar energy. And so we’re, I think Franklin is a fantastic Counterparty, they make fantastic products, and we’re really excited to be the only ones providing this option.

Catherin: That’s great. So permitting times and processes are obviously still a major challenge for the solar industry. How do you think Congress can advance distributed energy resource system planning in the near future? So for example, I know that you’ve highlighted the solar automated permitting process or solar app previously.

Meghan: Yes, the solar app is a tool created by the National Renewable Energy labs (NREL), it’s an automated solar permitting process. So it’s free for AHJ’s to use AHJs are Authorities Having Jurisdiction, that the municipality, the city, the county, whoever’s providing your permit, it’s free for them to tool it’s free for them to use and it provides instant online permitting for systems that comply with all of the codes and standards that they need to comply with. For the edge cases, those are sent back to the permitting office to actually approve, but it means that you don’t have to show up at a permitting office with a physical drawing, physical paperwork. You don’t have to stand in line if it makes the whole process more efficient, and it uses less staff time. And if we’re going to deploy solar at the rate, we need to deploy it in order to meet decarbonization goals, energy transition goals. We need to move these things through the process more quickly. This can’t take forever the permitting process.
I think the state that’s done the best with this so far is California. Last year they passed the Cal app program which provides AHJ’s $40 to $100,000. They apply for this money to work on adopting solar app once again, it’s free from the government but it takes training, it takes staff time so this grant helps with that, all of that. And then California just passed SB 379, which requires all jurisdictions over 100,000 people to adopt its solar app or something similar. I think there’s only one that’s done something similar and I think basically everyone else has done solar app.
At the same time the governor just signed I think this week, a bill limiting permitting costs, so nobody can charge more than $450 for a solar permit, which also makes all the sense in the world because as we talk about the cost of labor going up and the supply chain going up and panels, we don’t want to add additional costs and time to this process. So some states like New York, they can charge over $1,000 Just for a solar permit. It’s a significant portion of the overall cost of the system, right. But California is doing a really good job keeping permitting costs down, making sure that the process is really efficient. It’s fast for the customer. It’s easy, it’s easy for the installer. So tools like solar app that that the government created for us can go a long way to help with that.

Catherine: Do you think some of it is, we were talking about in the break about marketing, I mean, do you think some of it is just people don’t know about it? Like marketing it to these different AHJ’s?

Meghan: Totally Yes. They might not know about it. It might seem too intimidating. And don’t want to learn about adopting it. There’s also solar up doesn’t cover everything so it doesn’t cover new home so it doesn’t cover flat roofs. It might not take into account hurricane standards. So there might be issues with that. The thing is you can adopt it, and it can apply to the things that it applies to and then the permitting department can sort of one-off cover the rest of the permit. So it can take some of the burden away from AHJ but we have 10s of 1000s of AHJ’s around the country. And so getting in front of all of them, letting them know that this isn’t that scary, telling them how they can participate in the energy transition speeded up, makes it easier. It takes a lot of work. And so we need a lot of ambassadors. So if you’re listening to this, and you’re in an AHJ at your day to day or you have someone please tell them.

Catherine: So the IRA has spurred many announcements about domestic solar pannel domestic solar panel manufacturing. What else is needed for the solar industry to overcome ongoing tariff and supply chain challenges?

Meghan: Yeah, this is a tough one. Obviously the oxen ADCDP petition, the anti dumping countervailing duty petition, which I feel like you and your household may know a little a little bit about one or two things. Obviously that up-ended the industry I mean, it threatened tariffs of up to 250% and threatened retroactive tariffs. It stopped the supply chain short for a while it was I think it was one of the darkest times in our industry. Thankfully, the Biden administration put a two year moratorium on this and made sure that no retroactive tariffs can be charged. So the supply chain picks back up so that that moratorium ends next April. So but luckily, none of the tariffs can be retroactive. And so the IRA obviously passed and includes a number of incentives for domestic manufacturing. So it includes like actual money for each step of the value chain so it’s a couple of cents per kilowatt hour, and then it includes a domestic content adder for the EITC. It includes an incentive for building manufacturing facilities. So we have a lot of new incentives. The thing is we’re up against, we’re up against a lot.
China. So there’s sort of a couple steps in the solar value chain, you make polysilicon, you make ingots, then you do cells, wafers and then modules. And so right now China produces 96% of the world cells 88% of the world’s wafers and a lot of the world’s poly silicates. And they also manufacture the manufacturing equipment needed to make all of those things. And so it’s expected by 2026, they’ll be producing four times more than the global demand for solar panels. So we’re up against just this manufacturing powerhouse where it begins with very cheap modules.
That being said, here in the US, we’re expected to manufacture more modules. So the final step in the value chain, then we need starting next year, so we’ll be manufacturing more than we are actually expected to build starting in 2024. But that doesn’t mean we have every step of the value chain. For example, no new since the IRA passed, no new polysilicon plans have been announced. Some have been un-mothballed but we don’t have any new big announcements and the sellin wafer capacity is also still pretty limited.

Catherine: So net metering is another hot topic in many states throughout the US. What are some challenges states are facing with net metering and how important is that metering when it comes to solar adoption rates.

Meghan: The bottom line is if you want more solar net metering is a proven policy that will get you there. More net metering, more solar adoption. That’s the bottom line and all of this. Net metering is a policy decision. It’s something for those that don’t know, I know you were aware of this, net metering is a credit for excess generation that your system produces that you send back to the grid that your neighbor then uses you don’t your neighbor isn’t then having to pay transmission distribution or transmission fees or transmission upgrade for that they’re not getting paid for line losses. So it’s an easy way for the utility to sell power to your neighbor and not have to incur all the costs they normally incur. So it’s easy for homeowners to understand. It makes a lot of sense, especially when you add it with time of use rates because that tells you when the solar is most valuable when energy is most valuable when it’s not.
The thing is a lot of utilities are very threatened by people producing their own electricity. No surprise there. Their job is to sell and provide electricity and if you are doing that for yourself, that is a threat and you know a basic threat to their business model. And so they’ve come up with a lot of arguments against rooftop solar against net metering. They like utility scale solar that they own. They like community solar which they can control more but energy you control yourself somehow doesn’t work for them.

Catherine: Is that mostly regulated utilities or both?

Meghan: I say mostly regulated utilities. Munis and coops tend not to work in the best interest of their customers and their nonprofit, but still they want to be selling electricity to people, to you. So the bottom line is that net metering is good for solar adoption. So it’s a policy decision. If policymakers decide to change that, then we have to call that what it is; it’s a policy decision. But the fact is that individuals investing in rooftop solar and increasingly batteries at their homes, helps other ratepayers on the grid, it makes it cheaper for other ratepayers. For example, in New England, it was recently announced at the third largest coal plant in New England’s being retired. The reason given for that is that so many people have installed solar that there’s no need to run this coal plant anymore. So that’s good for people’s health. It’s good for people’s wallets that they don’t now have to pay for this coal plant for the upkeep for the fuel.
In California a couple of years ago, the Commission rejected a request for a few billion dollars worth of transmission upgrades. They said those upgrades were no longer needed because enough people had done energy efficiency upgrades and installed solar, distributed solar all over that they didn’t need to, they didn’t need to make the upgrades to the transmission line. So that saved other ratepayers, billions of dollars, because some homeowners made personal investments in these systems. Oh, and in Puerto Rico. I was talking to someone about this the other day, he said he very firmly believes given all the blackouts in Puerto Rico and all of the how often generation doesn’t match loads. It’s under what the demand is. rooftop solar has avoided innumerable blackouts in Puerto Rico because it’s reduced load so much that they don’t need so much generation anymore to match what people are demanding. And so the amount of strife that saved the amount of money that was saved just by individuals investing in solar on their own rooftop has helped prevent blackouts around the island multiple times. So these investments people are making are good for all other ratepayers. Net metering is something that’s easy for them to understand.
If it has to be replaced with anything, it should be replaced with something that fairly values their contribution to the grid, the energy they’re sending back or the load reduction. They’re participating. In. California has one program where they’re paying battery owners $2 a kilowatt hour at certain times when there’s peak demand for their battery energy. $2 a kilowatt hour is an unheard of sum of money. I mean, electricity is sometimes eight to 20 cents a kilowatt hour. So $2 is a lot of money. There’s a ton of value in the services those customers are providing by sending their battery energy back to the grid.
So all of it’s a policy decision, all of it’s a balance. But, fundamentally, I think that the value and the energy that solar customers and solar and batteries customers provide to the grid needs to be acknowledged and needs to be adequately compensated.

Catherine: I was thinking about this when you were talking about tribal nations, because it would obviously be a good way for them to be energy independent. Yes, but also to make some additional income, no?

Meghan: It absolutely would be to participate in what’s called aggregations, virtual power plants, distributed power plants, however you want to put it, but you spread power plants throughout your community, which happens with rooftop solar and storage. And you use that either as demand side management, you can use it in conjunction with EV batteries or smart thermostats. Renters can participate in this too, but you use it for demand side management when there’s too much demand you can manage you met in this case you match demand to supply rather than supply to demand, which is cheaper for everyone. We’ve overbuilt our grid by 20% for peak times, if we could reduce that cost by 20%. And instead of providing peak power, just reduce demand or demand side management or we are actually cheaper for everybody.
And so you can do that through demand side management or the actual capacity being provided. If you have batteries. Through a distributed power plan, right and tribal communities could do this, low income communities could do that and any community could do this. And a number our there’s a number of virtual power plants out there and this is something we’re doing through Project Hestia. We’re making sure all of our customers that we sign up through have the software needed to participate in a virtual power plan. If they have that ability in their community.

Catherine: Well, that’s great. Thank you so much for talking to me and I’ve learned so much and thank you for everything you’re doing for our industry.

Meghan: Thank you. You’re always so fun and amazing to talk to. I love seeing your posts. I love seeing what you’re doing.