This time it's Citi Group and SunPower teaming up on a $105 million deal to back 20-year leases for residential solar power systems.
This comes on the back of a slew of announcements from Google, Wells Fargo, Bank of America and others who are all joining up with large solar companies to finance rooftop solar, using leasing and tax-equity structures.
Citi put up $80 million for the financing plan, which extends the leases to residents of Arizona, California, Colorado, Hawaii, Massachusetts, New Jersey, New York and Pennsylvania. The bank’s move is part of its drive to invest $50 billion in clean technology and alternative energy. Earlier this year the finance giant teamed with SolarCity on a $40 million fund to back solar power lease arrangements this year, and in June we reported that it had gone in with Google on a big California wind-power project.
The news comes amidst a booming US solar market which is continuing to attract record investment:
$200 Million - SunRun & US Bancorp: SunRun, a home solar company, announced it received an additional commitment of tax equity from a subsidiary of U.S. Bancorp to support the purchase of $200 million in residential solar systems. This commitment is U.S. Bancorp's largest renewable energy tax equity fund to date. SunRun installs more than $1 million in residential solar every day. Last summer the company announced a $100 million tax equity project financing agreement with PG&E to fund over 3500 new home solar installations across the nation. At the time, PG&E said the agreement was the the largest residential solar financing vehicle established to date.
$1.4 Billion - BofA & Partners: Partnering with the Dept of Energy, Prologis and NRG Energy, BofA announced a DOE Loan Guarantee to help finance the largest distributed rooftop solar generation project in the world. The loan guarantee supporting $1.4 billion of debt facilitates a total project size of about $2.6 billion, which is being financed entirely by the private sector over the next four years. This distributed solar project will generate employment across 28 states and will create the equivalent of more than 10,000 full-year jobs. Once fully funded and completed, these installations are expected to provide approximately 733 megawatts (MW) of distributed solar energy, which is enough clean, renewable energy to power approximately 100,000 homes.
$2.1 Billion Tax Equity from Wells Fargo: Since its first solar project in 2006, Wells Fargo has invested more than $480 million in solar. Since making its first project investment in 2006, the bank said it has deployed more than $2.8 billion in project capital, including approximately $2.1 billion of tax equity, into more than 250 renewable energy projects in the U.S. The projects account for over 4,200 megawatts of new clean energy capacity across 25 states, EarthTechling reports.
So, what do all these deals have in common? They're using corporate tax equity to fund solar leasing programs. As the Investment Tax Credit expires at the end of this year, you can bet we're going to see more of this.
Or as Puon Penn, head of Wells Fargo’s National Cleantech Group says, "The U.S. renewable energy market is growing quickly and its long-term value proposition continues to improve." This will certainly attract foreign investment and large financial institutions.
But it's going to take creative financial strategies to allow smaller companies to follow the big boys into this complex market.