Because of solar power’s growing acceptance and the demand for solar power, a rising momentum in financing for solar companies comes as no surprise. Residential solar installs continue to increase as more households realize the incredible potential savings of solar. The development of new business alliances, hybridized sales channels, and companies’ own vertical integrations make it easier and potentially less expensive for homes and businesses to access solar energy. New capital from various sources is, of course, the fuel required by solar businesses to make these organizational and delivery changes necessary to grow. Although some of the earliest solar successes have emerged, it's clear that financing and increased import duties on China's solar industry could have a meaningful impact on tomorrow's leaders.
Residential Customer Demand for Solar Power
It's clear that demands coming from the residential market are spurring some of the world's largest investors to make greater commitments to solar businesses. Each homeowner wants a specialized design process to maximize the benefits of solar power at home. Here's a short list of recent financings that reflect the rising tide from residential customers:
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| Demand Forecast By Country |
Sunrun reported that a USD100m equity financing was achieved through a syndicate including Madrone Capital, Foundation Capital, Sequoia Partners, and Accel Partners. Fifty million dollars was also raised with new investors, bringing the total equity finance round to USD150m. It's probable from the level of participants' funding that a liquidity event, such as an initial public offering (IPO), is likely at some point.
Clean Power Finance (CFP) recently received USD 200 million from Credit Suisse to finance more residential solar installs and projects. CFP has previously raised more than USD1bn in financing from a prestigious investor group including Sand Hill Angels, Edison International, Kleiner Perkins Caufield & Byers, Claremont Creek Ventures, Google’s Ventures, and Duke Energy.
SolarCity, another top-tier solar install provider to the residential market, is rolling out a new homeowners' loan program. The company plans to offer credit-based financing at up to thirty-year maturity terms. The loan program is designed to allow SolarCity to serve more individuals and families with good credit (FICO score of 650 and higher). With tax credits and financing available to homeowners, SolarCity believes it will continue to meet growing demand in the U.S. market.
SunPower recently announced its USD42m non-resource debt facility and a partnership with Google in a USD250m facility to financial solar rooftops for residential customers. Google’s piece of the financing is USD100 million; SunPower says it will raise the additional USD150m. Google continues to demonstrate its commitment to solar power: the company has already invested more than USD1 bn in renewable energy projects yielding a full two gigawatts to residential customers around the world.
SunEdison, funded by a revolving credit line from Deutsche Bank Securities, announced it’s closed half (USD150m) of a total USD300m facility over a three-year term. The financing is focused upon developing projects in the U.S. and Canada. To date, Sun Edison has benefited from a total of USD1.2bn financing for projects yielding 325 megawatts.
Conclusion
The world's most sophisticated investors continue to commit growing amounts of capital to the solar project landscape. Residential demand reflects consumers' understanding of compelling tax and energy savings.
