SolarCity announces finance deal with Goldman Sachs for new projects
SolarCity has announced a lease financing agreement with Goldman Sachs to fund more than $500 million in solar power projects; an estimated 110 megawatts in generation capacity for homeowners and businesses.
The financing makes it possible for homeowners, businesses, government and other non-profit organizations to install solar panels with no upfront cost and pay less for clean electricity than they currently pay for utility bills. The agreement was initiated in 2012 and expanded per its initial terms at the end of April. The combined lease financing is the largest of its kind announced in the U.S. for homeowners' rooftops. The financing has already enabled approximately 26 megawatts (MW) of new solar generation to be deployed, and the remainder is reflected in the 158 MW of available financing as of May 10, 2013 reported in SolarCity's announcement of financial results earlier this week.
"We are excited about the opportunity in distributed solar, which has the potential to both lower energy costs and create jobs," said Stuart Bernstein, Global Head of Clean Technology and Renewables at Goldman Sachs. "Our firm has set a target of $40 billion in financings and investments in renewable energy over the next decade, and we believe SolarCity's range of distributed solar solutions targeting a wider customer base will help us move toward a low carbon energy future."
As more investors have become familiar with the reliability and quality of solar as a technology and an asset class, it has become possible to expand the pool of available financing and offer options to a broader range of potential customers, including those with lower credit profiles. SolarCity and Goldman Sachs have created an attractive financing structure to further lower the cost of capital of financing solar. The financing can make it easier to fund projects for schools, municipalities and other organizations that are not publicly rated.
"The Goldman lease financing will make affordable solar electricity available to more types of homeowners and organizations," said Jimmy Chuang, SolarCity's vice president of structured finance. "We expect to be able to expand our offering to a broader customer base by lowering the credit requirements even further in future financings."
