In a remarkably clear trend, SunPower (NASDAQ: SPWR) just announced $325 million in new commitments for residential solar lease projects from Citi and Credit Suisse. SunPower joins in the recent cash infusions from banks for firms such as SolarCity, SunRun, OneRoof, Clean Power Finance, and Borrego Solar totaling more than $600 million in what is clearly an attractive investment in this new asset class.

The $325 million from Citi (NYSE: C) and Credit Suisse (NYSE: CS) is an increase over the $105 million that came from Citi in July of 2011 and should help SunPower grow its already dominant U.S. solar rooftop presence.

In the difficult solar industry, SunPower's strong residential business, its utility pipeline along with the balance sheet power of Total make SunPower one of the seemingly healthier solar companies in this sector -- especially in light of the debt and loss situation facing Chinese solar firms such as Suntech and Trina. SunPower announces its second quarter results later today.

The SunPower zero-down lease program is available in Arizona, California, Colorado, Hawaii, Massachusetts, New Jersey, New York, Pennsylvania and Vermont.   

Third-party-owned solar from 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 saw OneRoof indicate its plans for a $100 million rooftop fund.

Borrego Solar just announced its 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's new structured finance fund with Credit Suisse (NYSE: CS) was 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 third-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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