Solar

Why The Money’s Flowing Into US Residential Solar Models

News today, adding to headlines in the past few weeks, underscores the rising popularity of U.S. residential solar (and especially third-party ownership).

Vivint Solar announced this morning that it has nailed down a whopping $540 million in financing, led by two unidentified “major financial institutions.” A chunk of that ($40 million) reportedly is in tax-equity financing, and the rest is generally committed toward residential solar financing. Note that Barely two months ago Vivint Solar landed another $200 million in two tax-equity funds. Blackstone bought the home-automation parent company Vivint last fall for $2 billion.

Vivint Solar also just opened an office in Orange County, California, and is turning around projects nationally at a monthly clip of around 1,200 customers totaling 5-6 MW.

The past two weeks have seen a flurry of financing deals in U.S. residential solar:

– In the past 10 days, SolarCity increased its planned share sale and convertible debt offering, seeking to net about $350 million and up to $400 million including overallotments. Chairman Elon Musk, CEO Lyndon Rive, and “prospective board nominee” Bennet Van de Bunt (head of direct marketing company Guthy-Renker) have collectively committed to buy 19 percent of those shares. Meanwhile, SolarCity’s been equally active on the acquisitions side in the past few weeks, buying solar installation hardware innovator Zep Solar and sales channel partner Paramount Solar.

– Canadian Solar linked up with Admirals Bank to for a U.S. residential solar installation. Steve Pickens, U.S. finance director for Canadian Solar, explained that as focus intensifies on U.S. residential solar there will be more programs to make it easier to finance. The idea is that direct financing like this offers a parallel benefit, or even an alternative, to federal tax credits.

– Last month SunPower inked a deal with Digital Federal Credit Union to provide up to $100 million in loans for the company’s residential solar customers. The company hinted earlier this summer that it would be expanding its options to fund growing U.S. residential solar demand.

All of this financial and M&A activity around U.S. residential solar is why we’re hosting a panel discussion next week at Solar Power International in Chicago, Illinois. On Wednesday, Oct. 23 at the SolarCentral booth (#1343), SolarCity, Vivint Solar, and Clean Power Finance will talk about whether a broader, vertical market strategy works best to get costs down and compete in the market, or whether a more networked model is better and why. Come be part of the conversation.

Lead image: Money home with solar panel concept financing, via Shutterstock