Via GigaOm, an interesting report on SolarCity’s latest efforts to raise funds to put solar panels on residential rooftops. As we noted in an earlier post, SolarCity’s deal with Google is to set up a $280 million fund to pay for putting solar panels on residential rooftops. The more pertinent detail is that Google can then get the tax benefits from the installations and SolarCity is hoping other corporations will follow suit. Could this be a harbinger of future corporate investment in roofspace for tax benefits?
“…SolarCity, which recently grabbed headlines by lining up Google as an investor to finance solar panel installations, is now turning to private investors to help fund its business operations. The installer is seeking a $42 million round and has bagged about $14.8 million so far, according to a filing Friday.
Founded in 2006, the company offers sales, financing, installation and maintenance of rooftop solar systems in-house. Doing that all by itself is a strategy some of SolarCity’s chief competitors don’t share, and the business model means the company needs more money for its day-to-day operations and payroll. SolarCity also wants to be a national service provider and has been expanding its business beyond the western states it initially served.
SolarCity offers leases (a fixed monthly fee) and power purchase agreements to residential and business customers who don’t want to own the equipment. If the company owns the solar system, then it can claim a 30 percent federal tax investment credit or get the equivalent in cash from the federal government. In many cases, investors who put up money to finance installations get to claim ownership of the equipment and can then get the federal subsidies to cut their income taxes.
SolarCity’s deal with Google is to set up a $280 million fund to pay for putting solar panels on residential rooftops. Google can then get the tax benefits from the installations and SolarCity is hoping other corporations will follow suit.
Home and business owners who can afford to pay for solar equipment and claim ownership of the gear also can claim the tax credit and other state or local rebates and incentives. These government subsidies have boosted the solar market’s growth and attracted new entrants into the installation business, which in turn has intensified the competition for service providers such as SolarCity.
As a result, some installers have gotten out of some segments of the installation business or have merged with others to pool resources. Last week, Real Goods Solar announced it had agreed to buy Alteris Renewables. SolarCity also has used acquisition as a tool. It bought Clean Currents Solar, the residential installation business of Clean Currents, and announced its entry into Maryland and the District Columbia earlier this year.
SolarCity last announced a corporate financing round of $21.5 million in 2010 that came from investors including Mayfield Fund, Draper Fisher Jurvetson, DBL Investors and Generation Capital.
You must be logged in to post a comment.