NewEnergyNews: SolarCity Gets New $250 Million Fund From U.S. Bancorp; Solar’s value brings the bank back for its sixth investment in third-party ownership.

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YESTERDAY

  • Weekend Video: The President, Florida, And Climate Change
  • Weekend Video: Bill Maher On Climate Change Zombies
  • Weekend Video: Climate Change Denial Disorder
  • THE DAY BEFORE

  • FRIDAY WORLD HEADLINE-VATICAN CALLS SUMMIT ON CLIMATE CHANGE
  • FRIDAY WORLD HEADLINE-EARTH’S HEAT FOR A HUNGRY WORLD
  • FRIDAY WORLD HEADLINE-WORLD OCEAN ENERGY GROWS ON
  • FRIDAY WORLD HEADLINE-ALT FUELS IN CHINA
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    THE DAY BEFORE THE DAY BEFORE

    THINGS-TO-THINK-ABOUT THURSDAY, April 16:

  • TTTA Thursday-BRAIN EATING PARASITES THRIVE IN CLIMATE CHANGE
  • TTTA Thursday-WORKING WITH UTILITIES FOR SOLAR
  • TTTA Thursday-TROUBLE AHEAD FOR TEXAS WIND
  • TTTA Thursday-INTELLIGENCE FOR OCEAN ENERGY
  • THE DAY BEFORE THAT

  • ORIGINAL REPORTING: WHERE THE ENERGY STORAGE EXPANSION WILL HAPPEN FIRST AND WHY
  • QUICK NEWS, April 15: A TRANSFORMATIVE YEAR FOR NEW ENERGY; PLUG-IN CARS SATISFY COMMUTERS; EV ENABLING BIZ TO BE $36BIL BY 2025
  • AND THE DAY BEFORE THAT

  • TODAY’S STUDY: NEW ENERGY-PLUS-STORAGE MEANS A MORE GRID-FREE LIFE
  • QUICK NEWS, April 14: PLUG-IN CARS ON THE VERGE; WHAT MADE TEXAS A WIND POWER; SMART GRID PROTECT BIZ TO DOUBLE TO $9.7BIL
  • THE LAST DAY UP HERE

  • TODAY’S STUDY: THE LITTLE BIRD THAT MEANS SO MUCH TO NEW ENERGY
  • QUICK NEWS, April 13: THE NEW DEBATE WHEN DENIAL ENDS; NEW ENERGY NEEDS A NEW GRID; BROADWIND AND BUILDING WIND
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    Anne B. Butterfield of Daily Camera and Huffington Post, is an occasional contributor to NewEnergyNews

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    Some of Anne's contributions:

  • Another Tipping Point: US Coal Supply Decline So Real Even West Virginia Concurs (REPORT), November 26, 2013
  • SOLAR FOR ME BUT NOT FOR THEE ~ Xcel's Push to Undermine Rooftop Solar, September 20, 2013
  • NEW BILLS AND NEW BIRDS in Colorado's recent session, May 20, 2013
  • Lies, damned lies and politicians (October 8, 2012)
  • Colorado's Elegant Solution to Fracking (April 23, 2012)
  • Shale Gas: From Geologic Bubble to Economic Bubble (March 15, 2012)
  • Taken for granted no more (February 5, 2012)
  • The Republican clown car circus (January 6, 2012)
  • Twenty-Somethings of Colorado With Skin in the Game (November 22, 2011)
  • Occupy, Xcel, and the Mother of All Cliffs (October 31, 2011)
  • Boulder Can Own Its Power With Distributed Generation (June 7, 2011)
  • The Plunging Cost of Renewables and Boulder's Energy Future (April 19, 2011)
  • Paddling Down the River Denial (January 12, 2011)
  • The Fox (News) That Jumped the Shark (December 16, 2010)
  • Click here for an archive of Butterfield columns

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  • Friday, October 26, 2012

    SolarCity Gets New $250 Million Fund From U.S. Bancorp; Solar’s value brings the bank back for its sixth investment in third-party ownership.

    SolarCity Gets New $250 Million Fund From U.S. Bancorp; Solar’s value brings the bank back for its sixth investment in third-party ownership.

    Herman K. Trabish, June 14, 2012 (Greentech Media)

    For the sixth time, U.S. Bancorp has put up major funding to partner with SolarCity in the rapidly expanding third-party ownership sector of the rooftop solar PV business.

    “It speaks volumes about the value of investing in solar,” noted SolarCity spokesperson Jonathan Bass about U.S. Bancorp’s re-investment. This funding, the bank’s largest in its three-year relationship with the solar provider, is enough to finance as much as $250 million in PV projects for residences, businesses and public buildings.

    “Each fund has a different mix of tax equity, potentially some debt, and corporate equity from SolarCity in some cases,” Bass explained. “All the fund structures are different,” he added, and specifics “are proprietary.”

    This $250 million will be “only solar,” Bass said, and will not go to SolarCity’s newer home energy efficiency retrofits. “The fund is somewhat unique,” he said, “in that it can finance residential projects, projects for small and large businesses, and municipal government projects.” Such versatility, Bass added, will allow a wide range of people to take advantage of solar’s value proposition.

    Often, such funds focus on a single sector, Bass said. “Our fund with Google was just for homeowners. And we recently did a fund with Rabobank that was just for commercial projects.”

    The new U.S. Bancorp fund will go to PV projects that “will mostly be deployed this year.” Newly released numbers from Greentech Media Research on the U.S. solar industry’s first quarter in 2012 show the industry growing at an 85 percent year-on-year clip. “They’re exciting,” Bass said of the numbers. “They show growth in every segment of the industry. And this U.S. Bancorp deal shows that private capital continues to flow into the space.”

    SolarCity was one of the pioneers, along with SunEdison, SunRun, Sungevity and a handful of others, of the third-party ownership model. It obtained its first funding in spring 2008 and has raised over $1.5 billion in structured financing to date.

    In third-party financing, home and business owners contract over a fifteen- or twenty-year period with a third party like SolarCity for the electricity generated by a system the third party installs, owns and maintains on the owner’s roof.

    The investor gets the tax equity advantage from the 30 percent federal Investment Tax Credit (ITC) and the installer gets regular payments over the contract’s term.

    The resident gets solar generated electricity at a rate significantly below the retail utility rate without bearing the burdens of upfront costs and ownership risks.

    “In many cases, when they pay little to nothing in upfront costs,” Bass said, “they can see savings of 10 percent to 15 percent on their utility bills.” But, he stipulated, that can vary quite a bit depending on the system’s location and orientation, the local electricity rates, and other factors.

    Because SolarCity is in an SEC-mandated pre-IPO quiet period, Bass could not discuss some of the deal’s details. He deferred to U.S. Bancorp to discuss the subject of return on investment, except to say that “from a structured finance perspective, these are stable, reliable assets that are reliably producing power over a period of time.”

    Clean Power Finance (CPF) CEO Nat Kreamer, whose company has aggressively moved into the third-party space in the last year, recently told GTM “rooftop solar is a low-risk, high-reward investment in what is essentially a long-term asset.” As much as 45 percent of an investor’s capital outlay, Kreamer said, can come back as a tax benefit in the loan’s first year. And the overall return on investment is “anywhere from the high single digits to the mid-teens.” The new U.S. Bancorp-SolarCity fund follows an announcement from CPF of a working relationship it has formed with SolarCity to develop a DOE grant-backed solar industry-wideoperations and maintenance (O&M) marketplace. Such a marketplace is expected to further remove risk for investors and, by doing so, to bring yet more capital into solar third-party finance.

    Asked how solar might be affected by the recent announcement by Southern California Edison (SCE) that its 2,200-megawatt San Onofre Nuclear Generating Station (SONGS) will be offline at least through the end of August, Bass noted that “solar systems provide value by producing power at peak times.” The threat Southern California faces this summer, Bass said, “illustrates the value of producing peak power.”

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