SolarCity and Google (NASDAQ: GOOG) just announced the birth of a $280 million fund to finance residential solar projects.

The fund is SolarCity’s largest project financing fund and the largest residential solar fund created in the U.S. SolarCity has built 15 project funds with seven different partners to finance more than $1.25 billion in solar projects.

Until now, the money has mostly come from the banking industry.

"I'm a big believer that corporations and utilities need to get into this space," said Lyndon Rive, the CEO of Solar City, adding, "The top 200 corporations in the U.S. are sitting on more than $1 trillion in cash on their balance sheets."

Google is no stranger to solar power -- albeit through investments in CSP for the BrightSource Energy's Ivanpah project and eSolar's CSP technology. Recently, Google invested in Clean Power Finance, a SaaS startup using software targeted at installers to help ease the paperwork required to deploy solar panels.

Google has invested a total of $680 million in a wide range of clean energy technologies.

As testament to its earnestness about greentech, Google has also invested in geothermal startups Altarock Energy and Potter Drilling and high-altitude wind innovator Makani Power. In the last year, Google signed PPAs with two wind farms in the Midwest to supply 215 megawatts of wind generated electricity to the company’s datacenters in the region. It also bought into the 845-megawatt Shepherd’s Flat wind project in Oregon, which will be the biggest U.S. onshore wind farm. And it joined a consortium preparing to build a 6,000-megawatt capacity transmission backbone for Atlantic coast offshore wind.

According to Rive, "Investments in solar energy generate returns for corporate investors, cost savings for homeowners, clean energy jobs for jobseekers, and protect the environment."  

Solar leases and PPAs let consumers install solar on their homes without the large upfront investment in purchasing the systems.

The big names in this business are SolarCity, SunRun, and Sungevity.  Solar City controls the value chain from customer acquisition through design, installation, financing, and service. SunRun and Sungevity subcontract out the installation. The advantage to subcontracting the installation, according to Rive, is scaling the business. The disadvantage is the issue of quality control, according to the CEO.

There are also other, smaller residential solar leasing firms such as Solar Universe, Ontility, SunPower, SolarCraft, Sun Edison, CentroSolar, and Suntech’s BriteLease program.

Paraj Chokshi, Public Affairs Manager of Clean Energy at Google, noted that distributed generation and residential solar rooftops were an important piece of the renewable puzzle.

SolarCity has more than 15,000 solar projects completed or underway with 12,000 of those customers choosing SolarCity’s financing options. The firm has 1,200 employees; 600 were hired in the last year.

Rive has seen a pattern in the way this type of capital is committed. The company wouldn't engage in the investment if it didn't envision a reliable return. But "the first fund is the hardest," according to Rive, because every group in the company has to buy in -- tax, treasury, finance, business development, etc.

"The next fund is much easier," according to Rive.

Tags: altarock, brightsource, brightsource energy, clean power finance, google, google ventures, google.org, ivanpah, lyndon rive, makani, makani power, makani wind, potter drilling, power purchase agreement, power purchase agreements