KBRA Places 28 Sunnova Solar Loan ABS Ratings on Watch Developing

KBRA has placed on Watch Developing 28 ratings on the outstanding classes of notes issued from 12 Sunnova Helios and Hestia Solar Loan ABS transactions, following observed deterioration in asset performance. The asset performance has been driven by a combination of further credit deterioration, as well as a one-time change to the calculation of delinquency age implemented by SunStrong Management, LLC, (“SunStrong”), the successor servicer to the recently bankrupt Sunnova Energy Corporation (“Sunnova”).

The account re-aging followed the completion of the servicing transition from Sunnova ABS Management to SunStrong in early November 2025. Upon transition, SunStrong adopted two account aging practices which it viewed as more in line with industry standards. First, it is now recognizing charge-offs and delinquencies without applying a grace period for obligors. Previously, Sunnova’s convention was to recognize delinquencies and charge-offs only after the expiration of a 30-day grace period, effectively delaying recognition by one month. Second, SunStrong also re-aged accounts on an expired payment plan when the loans became 180+ days past due and included them in this one time increase in charge-offs. Annualized losses on Sunnova’s solar loan portfolio rose approximately 710 bps from 4.6% in October 2025 to 11.7% in November 2025, with approximately 60% of the increase attributable to the one-time change to the account aging practices, according to SunStrong.

Based on information provided by SunStrong, we expect the majority of the spike in losses and delinquencies to retrace in the next reporting cycle. That said, as is common following a servicer transition, additional administrative disruptions may occur in the coming months, which may cause delinquencies and losses to remain elevated.

The table below displays the initial and current credit enhancement and the Watch Placements undertaken in this review. To date, the securities have received timely interest payments.

On September 4, 2025, Solaris Assets, LLC completed the acquisition of substantially all Sunnova assets/operations and transitioned core operations to SunStrong, including SunStrong’s role supporting “billing and collections” and investor engagement/reporting. Sunnova was a Houston, TX based independent solar power company that provided low-cost solar electricity to homeowners. The Company started its operations in January 2013 and began providing solar energy services under its first operating Photovoltaic (“PV”) System in April 2013.

KBRA will continue to monitor the performance of the transactions and will seek to resolve or update the Watch Placements within 90 days.

For additional information regarding a specific transaction, see the list below to access ratings, reports, and disclosures:

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