Much of SolarCitys leadership in the U.S. residential solar market comes down to the companys strength in finance. It has been able to raise more money to deploy distributed solar than anyone else, and in the process introduced new mechanisms for financing portfolios of solar projects.
And while todays US$227 million tax equity financing deal with John Hancock was not a novel structure, it is a continuation of that trend. Through the deal John Hancock will invest in a portfolio of residential and commercial and industrial (C&I) solar projects totaling 201 MW.
This 201 MW is spread across 18 U.S. states, and SolarCity states that the mix of assets is a representative sample of its customer base. The company notes that the commercial customers include national retail brands, and SolarCity notes that the average FICO score of its residential solar customers in this portfolio is 744.
The deal is structured so that SolarCity retains ownership of the projects and services the customers, but monetizes the majority of 20-year cash flows, including the solar renewable energy credits (SRECs). SolarCity will also retain a minority share of annual cash flows through the contract term, and essentially the entire cash flows thereafter.
?Including tax equity investments, upfront rebates and pre-payments, SolarCity estimates that it has raised $3.00 per watt of financing for the projects in the portfolio.