SolarCity, a company that designs, installs and secures financing to put solar power generating systems in homes in North America, keeps reeling in the financial partners. This time, the San Mateo, Calif.-based startup convinced Citigroup to finance $40 million in U.S.-based home solar projects in 2011, a representative from Citigroup confirmed.
The chief executive of Solar City, Lyndon Rive, explained the significance of his company’s new financial partner:
“Over the last year, we entered into the residential solar financing business. But $40 million is on the smaller side of deals we have, actually. Funds [from our partners] range from $40 million up to more than $100 million.
When you have a global player like Citigroup, it is not easy for them to take a new initiative, to turn the boat, if you will. We’re very excited that they chose SolarCity as a first entry into the space.
We hope to see them do more of this [kind of clean energy financing] once they have some time to experiment, see the results and deploy more.”
Since mid-2008, SolarCity attained 12 funding deals like this, with over half of those from financial partners’ coming back with larger amounts, to repeat business.
Ben Cook, vice president of project finance at SolarCity, noted that his company’s performance data is its “secret weapon” in convincing banks to become clean tech investors in this manner.
“Financial institutions are concerned with risk and defaults of course. They want to know if the systems work. Our systems provide 5 to 8 percent more power than we estimated, we’re finding, in terms of kilowatt hours. That leads to happy customers. As far as the default rate? 99.9% of our customers pay on time.”
SolarCity competes with a range of other solar installers who offer financing options, like the SolarUniverse franchise for residential projects, or Greenbridge Energy Consortium for commercial and institutional projects.
So far, Citigroup is only working with SolarCity in residential solar financing.