Residential solar is continuing to attract more funds, showing that the residential solar industry will remain hot in 2015. Last week two of the nation’s largest home solar companies separately announced large new funds to support more residential solar across the U.S. Together SolarCity and Sunrun raised $545 million. SolarCity raised $350 million with J.P. Morgan and Sunrun raised $195 million with Investec.
The larger of the two, the SolarCity fund, is the second that the residential and commercial solar company has created with J.P. Morgan. The first was a $170 million fund created in 2013. SolarCity said the fund will support solar at thousands of homes in the states it services.
The syndicated funds raised by Sunrun through Investec Inc. and Investec Bank PLC will also help the company finance solar power on thousands of homes. The company said it is its first syndicated financing and opens up a new capital source to Sunrun.
“We are very excited to have closed this financing for Sunrun,” said Mike Pantelogianis, Co-Head of Power at Investec. “We have established a cost effective financing solution that leverages long-term cash flows to support the long term growth of Sunrun’s business.”
“This financing significantly reduces Sunrun’s cost of capital, which will help us lower costs for homeowners and also positions the company well for continued growth,” said Jason Cavaliere, vice president of Project Finance at Sunrun. “The strength of our project portfolio and operating history, among other factors, allowed us to achieve a lower interest rate and longer tenor than any publicly announced residential solar backleverage facility.”
“Sunrun trusted our distribution capabilities and we were able to deliver a syndicate of lenders, which included several first-time lenders to the U.S. residential solar market,” said Ralph Cho, Co-Head of Power at Investec. “The financing was met with strong interest and was oversubscribed.”
The fund is being deployed by Sunrun through a financed structure. A total of $171 million is being divested as senior facilities. The remaining $24 million is being divested as a subordinated facility.
Companies like J.P. Morgan are investing heavily in solar power. For instance, J.P. Morgan said it has invested more than $1.4 billion in renewable energy since 2013.Tweet