SolarCity creates new US$400 million solar fund

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SolarCity has announced its latest fund with an un-named “large financial institution” to support distributed solar projects in the United States, providing scarce details of the $400 million fund.

This follows the completion of SolarCity’s fourth securitization offering only three weeks prior, and when completed will put the company at over $9 billion in various funds for residential and commercial solar.

This is a tremendous amount of money for a company that reported only $103 million in revenue in its most recent quarterly results. However SolarCity has stressed that under its business model traditional metrics mean less, and instead emphasizes expected payments over the life of solar arrays it has deployed.

Mercom Capital CEO Raj Prabhu notes that SolarCity’s ability to attract low-cost capital is key to its business model. “This becomes a competitive differentiator – the ability to raise funds at the lowest cost,” explains Prabhu.

“The value SolarCity brought to the U.S. market has been innovation of financial structures. They have been at the forefront of some of these models, but everyone else is catching up too.”

The news of this latest fund also follows an erratic few weeks for SolarCity’s stock. The company’s shares fell to their lowest level since 2013 on August 21 following a report by a hedge fund manager that he planned to short the stock, but have since shown a modest recovery.