SunEdison’s TerraForm subsidiary is closing 2014 on a busy note. It announced yesterday (Dec. 23) that it secured $175 million to support 60 megawatts of solar projects. That follows an announcement last week (Dec. 16) of a second fund with Barclays and Citi.
Both of TerraForm’s new funds, as well as other recently announced ventures like Sol-Wind Renewable Power, show that the variety of methods for financing solar are increasing as it becomes a more mainstream form of energy generation. However, TerraForm, which was created earlier this year as a YieldCo, may be at the vanguard of the new financing mechanisms. While many of these newer to solar funding mechanisms are currently being used to support commercial and utility-scale solar these types of funds could be used to support residential solar installations in the future.
The newly announced fund for $175 million was made through an agreement with JPM Capital Corporation (JPM Capital). Under the agreements JPM Capital and SunEdison will invest up to $75 million and TerraForm will invest $100 million in the fund. They will use the fund to purchase up to 60 megawatts of solar power projects. SunEdison is developing and building the projects in 2014 and 2015. “This funding enables SunEdison to continue to offer advantageous pricing and financing to customers, and grows TerraForm Power's already robust project pipeline,” SunEdison said in a release.
"Putting together a fund with an investment commitment from JPM Capital, one of the world's leading tax equity investors in renewable energy projects, is an important milestone not only for our company, but for the solar industry as a whole," said Ryan Bennett, vice-president of project finance, North America at SunEdison. "This is one of the largest funds of its kind in 2014, and it puts SunEdison and Terraform Power in an ideal position to rapidly grow and expand the solar energy market, all while offering excellent pricing and financing to our customers."
"This fund enables TerraForm Power to make substantial acquisitions that strengthen our position as a leader in the highly fragmented solar energy market," said Carlos Domenech, president and chief executive officer of TerraForm Power. "Our partnership with SunEdison together with JPM Capital's investment commitment positions TerraForm Power to continue our expansion in this fast-growing, high-margin segment."
When TerraForm announced the second fund with Citi and Barclays it said it raised a total of $290 million in aggregate funding to support distributed generation solar projects. That fund will support solar projects in 12 states across the West Coast, mid-Atlantic, New England, Hawaii and Puerto Rico. Some of the projects are slated to become operational by the end of 2014 with the rest coming online in the first half of 2015. Under the funding arrangements TerraForm will purchase the projects when they are mechanically complete.
“This second SunEdison fund further develops the market for corporate, industrial and municipal medium-scale projects, and complements Citi's efforts to help clients finance large utility-scale and small-scale residential rooftop solar power projects,” said Marshal Salant, head of Alternative Energy Finance at Citi.
"Barclays and Citi have been great partners, working with SunEdison to bring distributed solar to new markets and customers. The creation of this second fund, so soon after the first, speaks to the success of our relationship with Barclays and Citi," said Ryan Bennett, vice president of project finance, North America at SunEdison. “This is a highly scalable model that allows us to make life easy for our customers. As a result, business is booming."Tweet