Investors can appear downright hostile to the idea of putting money in solar manufacturing these days, but their attitude toward the business of financing and installing solar panels is another story. So, the Thursday announcement that Clean Power Finance has created a $300 million residential solar fund serves as the latest reminder as to who are the darlings of investors these days.

San Francisco-based Clean Power Finance, founded in 2007, offers leases and sales software for installers to market and sell to consumers. It's teamed up with a Morgan Stanley subsidiary, MS Solar Solutions, and developer Main Street Power to create this new fund, which will initially finance installations in California and Arizona. Zions Energy Link, created by Zions Bancorporation in 2010, is the first loan provider to the fund. Zion, which runs a group of banks including the Bank of Arizona, has worked with Arizona Public Service to fund installations by SolarCity.

Solar leases have become a popular way for consumers to use solar electricity without having to pay the expensive upfront cost of installing solar panels and other equipment. Homeowners will still see solar panels installed on their rooftops, but they don’t own the equipment and pay instead a monthly fee for the solar electricity produced by the panels. That fee should amount to a lower electric rate than what they pay to their utilities. By choosing the leases, consumers should see an overall lower monthly utility bill.

Aside from Clean Power Finance, which counts Google as an investor, other companies that have been raising funds to finance installations or venture capital to support their growth include SolarCity, Sunrun, Sungevity, Vivint and OneRoof Energy. Last week, Sunrun said it had secured a $150 million tax equity fund from a U.S. Bancorp’s subsidiary to finance residential solar projects. SolarCity, meanwhile, announced earlier this week that it plans to do an initial public offering.

“If you were going to institutional investors and tell them module prices are crashing, people will ask you who will benefit, and you can easily point out the downstream companies,” said Smittipon Srethapramote, vice president of research at Morgan Stanley, during a panel discussion at Greentech Media’s solar conference in Phoenix this week (via webcast). “Downstream companies with good track records are a unique proposition that investors haven’t seen in a while."

Srethapramote was talking about the investor interest in initial public offerings from solar service providers in the photovoltaic business. Most of the public solar companies are manufacturers of solar cells and panels or inverters, and they by and large haven't fared well in the past year. If SolarCity pulls off a succesful IPO, it will help its peers to raise more private or public money. 

Many of the solar retailers, from solar lease providers to installers, first emerged in mid-2000s. They have raised several rounds of venture capital and project funds since, and, with the help of federal, state and local rebates and other incentives, they have been able to evangelize the benefit of choosing solar electricity to consumers and business owners.

These solar service providers have attracted even more investor attention over the past year as the solar panel prices plummeted — about 50 percent during 2011. A growing number of solar panel manufacturers are going out of business or shuttering factories because supply has far exceeded demand worldwide. Some manufacturers are hoping they could start to make profit again by the fourth quarter of this year.

“It’s significantly easier to raise money for some of these downstream players if you talk to a venture person who is educated enough,” said Abe Yokell, a partner at RockPort Capital, during the same panel discussion at the solar conference.