SunRun said Thursday it has lined up $105 million to finance as many as 2,000 residentialsolarenergy systems.
The San Francisco startup said it had secured the money from a U.S. Bancorp (NYSE: USB) affiliate at the time when the credit crunch has made it difficult for other renewable energy companies to find willing lenders.
"I understand that it runs counter to the thread of conversation of what's in the media today," said Nat Kreamer, president and COO of SunRun. "Outside of this current economic turmoil, people are making long-term investments in the industry. In the energy industry in general, you can't have a short-term view of it."
SunRun provides financing for residential solar energy systems in exchange for an installation fee and long-term power purchase agreements from homeowners. Consumers pay a fixed, monthly rate.
The company, like other residential solar companies, has borrowed the model from the commercial solar market. The financing terms make solar energy more affordable to homeowners. Otherwise, a 3.75-kilowatt system, for example, could cost $35,700.
But the power-purchase agreement concept alone wouldn't have been palatable to homeowners without the potpourri of rebates and tax credits offered by cities and states (see San Francisco Solar Incentives Becomes Official, California Cities to Offer Solar Loan Program and Big Renewable-Energy Subsidies Backfire).
Plus, a new federal tax credit will take effect in January that can shave the cost off a residential solar energy system by 30 percent, making it much cheaper for consumers to own their energy systems.
Solar executives have predicted a booming market ahead after Congress approved the tax credit, along with a basket of tax credits for commercial solar power plants, wind farms and other renewable energy projects (see Lawmakers Approve Energy Tax Credits, Bailout).
All these government aids have intensified competition among solar energy service companies – and have begun attracting new entrants in the solar installing businesses (seeBattle for Home Solar Financing Begins and SolarCity Joins Race for SF Customers).
SunRun, founded in 2007, raised $12 million in its first round of funding earlier this year (see SunRun Grabs $12M, Eyes Residential Rooftop Market).
The startup currently serves California, but plans to expand to other states, said Kreamer. He declined to say where.
SunRun on Thursday also announced that SunEdison's chairman David Buzby has joined its board of directors. SunEdison, based in Beltsville, Md., has the same business model as SunRun but targets the commercial and utility markets (see SunEdison to Build Largest U.S. PV Farm). Kreamer said Buzby's involvement doesn't mean SunEdison wants to buy SunRun.
In recent months, solar services companies have sought partnerships or new owners to stay competitive in an increasingly crowded market. (see First Solar Profits Up 54%, Credit Crunch Could Impact Biz and Solar Mergers: Guarding Against a Slumping Economy).