Third-party-owned solar from firms like SolarCity, Sunrun, Borrego, and OneRoof continues to be an attractive investment and asset class for banks with an appetite for tax equity.

We reported on the $200 million that went to SolarCity and Sunrun last week. This week saw OneRoof indicate their plans for a $100 million rooftop fund.

Borrego Solar just announced their own $65 million fund for corporate, education and municipal customers with backing from U.S. Bank and National Cooperative Bank (NCB). That brings Borrego's total to $225 million of solar funds being applied to PPAs. Borrego's recent funding will be applied to 18 megawatts of solar energy systems, totaling eight projects, including four municipal landfill installations and one school district. Borrego Solar's latest funding comes on the heels of the $47 million round completed late last year with U.S. Bank and East West Bank, which supported 11 megawatts of solar projects.

SolarCity just announced a new structured finance fund with Credit Suisse (NYSE: CS), the second of two investments to finance solar projects totaling $200 million from Credit Suisse. Credit Suisse kept the funds flowing to Sunrun as well, committing $200 million to Sunrun's solar power service. Sunrun led the field in California in Q1 of 2012 in third-party residential market share (see chart below).

Third-party financiers like Borrego, Sunrun and SolarCity (and Clean Power Finance, SunPower, Sungevity, OneRoof Energy, etc.) eliminate the upfront cost of solar panels to customers. Customers can install solar panels for no money down and pay just for the solar electricity they produce at prices below utility rates. The third parties (or their partners) manage the process of permitting, installation and O&M.

Third-party financing is being entertained for other energy services, as well. Solar hot water (SHW) vendors such as Skyline Innovations are exploring this. EPR2 is looking at third-party financing of solar on commercial and multi-tenant buildings. And a whole slew of startups and ESCOs are exploring ways to finance energy efficiency measures.

Chris Williams, the Chief Marketing Officer at HeatSpring, suggests that "we will know that solar PV has become mainstream when 3rd party financiers are no longer needed"

 

Data below from GTM Research's U.S. PV Leaderboard. Contact Justin Freedman at freedman@gtmresearch.com for more details.

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