Dive Brief:
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SolarCity reports it has raised $345 million in tax equity from four separate partners in June and July to finance new solar projects by covering the capital cost of new equipment and installations.
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SolarCity says it also expanded its existing debt aggregation facility by $110 million to $760 million and expanded its solar renewable energy credit (SREC) financing facility to accept five years of hedged SRECs.
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SolarCity says its new funding capabilities will lower its cost of financing and make it possible for customers to pay less for solar power than for utility power.
Dive Insight:
SolarCity has been expanding rapidly in the rooftop solar market. One element of that expansion has been a search for lower cost of capital to fuel its growth. That is also one of the drivers in Tesla Motor’s recent acquisition offer for SolarCity.
The combination would turn Tesla into a vertically integrated clean energy company that manufactures, sells and installs rooftop solar, batteries and electric cars.
Elon Musk, CEO of Tesla, said it was “kind of an obvious thing to do.”
Musk owns more than 20% of the stock of both companies and is chairman of both companies. In addition, his cousins Lyndon and Peter Rive are the founders of SolarCity, and both sit on the SolarCity board.
The acquisition offer was seen as a bailout by some analysts. SolarCity had $3.25 billion in debt and $1.23 billion in debt payments due by the end of 2017.
The new funding arrangements could help improve SolarCity’s outlook to investors by showing its ability to independently fund its growth, Fortune noted.
SolarCity says it has raised more than $1.5 billion in project financing so far in 2016.