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The
move is aimed at bringing new capital into the fast-growing
rooftop solar industry and ultimately reducing the cost of that
capital, SolarCity's chief executive, Lyndon Rive, said.
"That will bring many more investors and then more competition,
and then that will reduce the cost," Rive said in an interview.
SolarCity and other solar financing companies for years have
raised funds of $100 million or more to finance their rooftop
systems from major corporations such as Google and U.S. Bancorp.
These so-called tax equity funds allow the companies to claim
the lucrative federal tax credits for solar energy systems. The
funds generate returns of between 8 and 10 percent.
Homeowners benefit by avoiding the hefty upfront cost of a solar
system in favor of low monthly payments for about 20 years.
SolarCity's new fund is intended to attract investors such as
regional banks or smaller corporations that may only be able to
contribute $20 million to $25 million.
Bank of America will serve as the administrator of the fund and
will provide whatever capital is needed to reach $200 million,
Rive said, adding that he hopes the program is the first of many
like it.
"We will deploy that $200 million over the next year, but my
goal is to get that to become multiple billions," Rive said.
(Reporting by Nichola Groom; Editing by Leslie Adler)
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