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Sunnova Enters into Definitive Agreement to Acquire SunStreet—Lennar’s Residential Solar Platform for Homebuilders

17 Feb 2021

Sunnova Energy International Inc. ("Sunnova") (NYSE: NOVA), one of the leading U.S. residential solar and storage service providers, and Len X, LLC (“LENX”), a technology focused subsidiary of Lennar Corporation (“Lennar”) (NYSE: LEN and LEN.B), one of the nation’s leading homebuilders, announced they have entered into a definitive agreement under which Sunnova will acquire Lennar’s residential solar platform (“SunStreet”). In addition to Sunnova’s acquisition of SunStreet, Sunnova will become Lennar’s exclusive residential solar and storage service provider for new home communities with solar across the country.

“We are thrilled to announce our acquisition of SunStreet, and our new strategic partnership with Lennar, which will be a first of its kind in the industry geared towards creating innovative pathways for how new communities are powered,” said William J. (John) Berger, Chief Executive Officer of Sunnova. “Sunnova’s success is built on strong partnerships and shared vision, and this transaction will be no different thanks to our complementary strengths and mutual desire to transform the energy landscape. This agreement will allow Sunnova to increase customer growth, further scale the business, and develop smart microgrids for communities across the U.S.”

“The sale of SunStreet to Sunnova underscores our longstanding focus on and strategy around technology and ESG investment in Lennar’s future,” said Stuart Miller, Executive Chairman of Lennar. “This transaction, in exchange for Sunnova’s stock, represents a long-term investment by Lennar in the company that we believe is best suited to innovate and evolve in the dynamic and rapidly growing field of sustainable energy. We look forward to working with the exceptional team at Sunnova to build industry leading solar products for a better future. Lennar’s homebuilding expertise and volume coupled with Sunnova’s solar expertise and determination creates a winning combination to build best in class products for new homes while enhancing the lives of homeowners.”

The global energy landscape is undergoing an incredible transformation and consumers are demanding more from their energy service providers, especially as people spend more time in their homes and as weather events continue to worsen due to climate change. This consumer awakening is challenging the traditional, centralized power infrastructure, and now more than ever, consumers want access to clean, affordable and reliable power.

Strategic Rationale:

Created by Lennar, SunStreet has a distinct understanding of homebuilding operations that has earned the company a reputation for being a proven leader in the residential solar market for homebuilders. This acquisition will provide a new strategic path that will allow Sunnova to generate significant shareholder value, increase customer growth, and develop clean and resilient residential microgrids across the U.S. Sunnova will be able to bring SunStreet’s proven track record of high-quality, timely installations to additional homebuilders, while working with existing SunStreet customers to enhance their energy independence through the addition of battery storage and other offerings. As Sunnova’s business impact grows, so too will its positive social and environmental impact, helping the company achieve its overarching mission of powering energy independence.

Sunnova SunStreet Acquisition Advantages Include:

  • Captive pipeline: A multi-year supply of homesites and leading market share drives visibility, resulting in higher option value
  • Lower costs: Reduced customer acquisition cost driven by making solar a standard feature
  • Production platform: SunStreet’s seamless integration into the homebuilding process avoids potential operational interruptions
  • Upsell Opportunities: to upsell many of the 250,000+ existing homes built by Lennar in the last decade, and the ~40,000 solar-only SunStreet installations, with Sunnova’s broad portfolio of solar and battery storage service offerings, subject to applicable privacy laws

Lennar and Sunnova Strategic Partnership:

In connection with acquiring Lennar’s residential solar platform, Lennar and Sunnova have agreed to a multi-year strategic partnership, with the potential to align the strategic and economic interests of both companies, with a focus on enhancing Sunnova and SunStreet’s full growth potential. Under the multi-year strategic partnership:

  • Sunnova will become Lennar’s exclusive residential solar and storage service provider
  • Through LENX, a subsidiary of Lennar, the strategic partnership will focus on the development and rollout of innovative energy technologies, such as home storage and community microgrids
  • LENX will maintain an equity ownership interest in Sunnova as well as a commitment to provide tax equity investments to support Sunnova’s homebuilder customer pipeline
  • Sunnova and Lennar share a vision and business ethos to create value for their shareholders by further propelling the energy transition towards decarbonization, and providing cleaner more reliable energy solutions to homeowners

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