Despite the credit crunch some banks are still willing to give loans to renewable energy projects. Solar services firm SunRun has just landed a $105 million commitment by U.S. Bancorp (USB) to buy about 2,000 of the residential projects it installs.
Keep in mind that this isn’t equity or debt money that SunRun itself will receive, it’s more like a line of credit. Because the company leases out solar arrays that it installs on customers’ roofs, the financing is more like a guarantee that SunRun can keep working at full speed without worrying about how to pay for the installations. For USB, the investment will provide predictable returns over the next several years as customers pay for the power they receive from their solar panels.
Only a few companies like SunRun have brought in similar financing. “This is a specialty asset class,” says Nat Kreamer, the company’s chief operating officer. “It’s not like getting a home loan — it takes real expertise.”However if the venture proves profitable it could clear the path to many more financing deals like this one.
David Buzby, the chairman of SunEdison, is to join the SunRun board. As one of the largest commercial and government solar installers in the country, the company has some real synergies with SunRun’s home installation business. Kreamer did not speculate on whether the two companies might collaborate.
The last equity funding SunRun received was a $12 million round in June. The company is based in San Francisco, California which is rapidly changing it’s image from Silicon Valley to Solar Valley.