Sunrun, one of the leading residential solar leasing providers in the U.S., has secured a $33 million, non-recourse term loan facility to help support its expansion plans in three northeastern states.
Funds from the five-year loan will be used to acquire a portfolio of solar renewable energy credits (SRECs) that will enable Sunrun to offer more affordable access to homeowners eager to adopt solar in states that Renewable Portfolio Standard (RPS) legislation.
The company did not disclose the name of the lender, but confirmed in a press release that it is a "leading international financial institution".
The financed SRECs will be used to support the growth of Sunruns solar business in the states of Maryland, Massachusetts and New Jersey, and the loan offered at an interest rate of 6.8% – will be advanced against contracted and uncontracted SRECs. This is the first time that Sunrun has borrowed on a non-recourse basis against cash flows that have not been included in the firms estimated retained value.
Sunrun added that it expects to employ similar financing options for future SREC-related investments due to the "upfront monetization" possibilities inherent in this method of funding.
"Sunrun continues to demonstrate that we can access flexible and attractive capital from diverse financial institutions to both enhance upfront cash proceeds and support sustainable growth," said Sunruns CFO Bob Komin, who added that Sunrun views the northeast of the U.S. as a "thriving pocket" for solar.
In June, the company secured an additional $40 million in working capital, largely to augment its presence in the New York solar rooftop segment. Since going public in 2015, the lease provider has raised more than $270 million in funds to help support its growth objectives.