SolarCity secures $500m aggregation loan for distributed solar

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U.S. solar energy provider SolarCity has closed a $500 million financing facility that the company hopes will further facilitate the adoption of solar PV energy across the U.S.

The financing aggregation agreement with three of the world’s largest lenders – BofA Merrill Lynch, Credit Suisse and Deutsche Bank – eclipses all previous loan facilities of its kind, and will be used to finance the rollout of more than 500 MW of solar power systems for U.S. homeowners, businesses and government organizations.

The novel structure allows SolarCity to fund customer installations at an earlier stage in the development cycle, bringing zero-upfront-cost PV to thousands more customers and also driving a faster return of working capital that, in turn, will be used to finance the predicted rapid growth in SolarCity’s expansion.

The aggregation facility is unique in that it will permit fully developed solar systems to be continuously refinanced via ongoing securitizations or other capital markets solutions, which will work to drive down the cost of new solar systems as well as freeing up extra capital for SolarCity to steer into its design and installations business.

"We are excited to announce this ground-breaking transaction for us and the industry," said Brad Buss, SolarCity’s CFO. "By bringing three of the largest lenders together we have created what we believe to be the largest aggregation facility to date that will grow with our MW deployments over time, enabling us to continue to expand distributed generation solar at a rapid pace."

The collaboration between SolarCity and BofA Merrill Lynch is third such financing arrangement between the two companies. At the end of last year SolarCity announced a $400 million finance program funded by the bank, building on a previous $200 million commitment a few years earlier.

BofA Merrill Lynch has become heavily involved in the financing of solar programs of late, collaborating with SunPower on a $220 million agreement last year, and hosting a recent Technology & Beyond conference in Taiwan that put solar energy to the fore.

SolarCity has also recently worked with Credit Suisse on a $1 billion commercial rooftop fund.