Is Sunnova Energy International (NOVA) Halal to invest in?

Is Sunnova Energy International (NOVA) Halal to invest in?

How much of Sunnova’s revenue comes from haram?

Sunnova offers residential solar and energy storage services in the United States.

Sunnova earns its revenue from the following segments:

  • Power Purchase Agreements:

Includes revenue generated from long-term residential solar service agreements. 

  • Lease Revenue:

Includes revenue generated from lease agreements for solar energy systems and energy storage systems.

  • Solar Renewable Energy Certificate Revenue:

Includes revenue generated from selling Solar Renewable Energy Certificates (SRECs) to utilities and other third parties who use the SRECs to meet renewable portfolio standards.

  • Loan Revenue:

Includes interest earned from financing contracts for solar energy systems sold to customers through financing.

  • Other Revenue:

Includes revenue generated from state and utility incentives, revenue from the direct sale of energy storage systems to customers, and sales of service plans.

The contributions from each of Sunnova’s revenue segments in their 2020 annual report were as follows:

An area of concern for Practical Islamic Finance is revenue generated from extending out loans and earning interest from financing contracts. While this percentage has not dramatically increased in recent years, investors will have to monitor this percentage closely to see if it grows as time progresses.

Practical Islamic Finance concludes:

 Only a non-material portion of Sunnova’s revenue comes from haram. 

Does Sunnova rely on interest to operate?

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What is Sunnova’s Environmental, Social, and Governance (ESG) impact?


According to Sunnova’s 2020 ESG Report, the company has generated 2.4 Billion kWh of clean energy through its solar energy services. 


Sunnova has a Glassdoor rating of 4.0 out of 5 from over 150 current and previous employees compared to a 3.3 average for all other Glassdoor rated companies. 


No notable governance highlights. 

Practical Islamic Finance concludes:

Sunnova has a net positive ESG impact.

Comfort Rating

From Sunnova’s business, financial, and ESG reviews, Practical Islamic Finance rates Sunnova stock as: 

Uncomfortable to invest in from a halal perspective.

Justification for our rating

Sunnova’s consistent elevated use of interest to run its operations suggests a systemic reliance on Riba. This causes Practical Islamic Finance to be Uncomfortable investing in the company from a Halal perspective.


Sunnova Reviews 

Sunnova 2020 ESG Report

Sunnova 2020 10-K

Sunnova Q3 2021 10-Q   

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