SolarCity now installs nearly a third of all residential solar systems in the US, according to GTM Research. Over the past year, its stock has surged from $8 a share to $75 – it has a mind-boggling 80,000 customers and expects that to grow to a million within the next four years!
Unlike crowdfunding and community solar approaches that typically aggregate investors to provide loans for individual projects, SolarCity plans to offer debt investments backed by diversified portfolios of solar assets.
Common Assets is led by some pretty impressive people. CEO Tim Newell, who will serve as SolarCity’s Vice President of Financial Products, has been managing director and senior advisor for several cleantech venture capital funds, and for E*Trade. John Witchel, its chief architect, will be SolarCity’s senior technology architect for financial products. He co-founded Prosper, the first person-to-person online lending marketplace in the US.
This is the latest creative investment vehicle SolarCity has come up with. Recently, SolarCity issued a widely hailed bondyear, $54 million bond is backed by cash flows from solar leases. What makes it imporant? “If the hundreds of millions of dollars in solar leases can be bundled and sold to pension funds and other investors, ‘solar securitization’ could open a potentially huge pool of capital to finance renewable energy expansion as government tax breaks expire,” says Sean Kidney of
ClimateBonds.net.
Paying off the bond through cash flow gives it the ability to keep raising money for its next wave of installations, supporting velocity in working capital.
