SolarCity in second PV securitization

SolarCity has pulled back the curtain on its second sale of securitized PV assets, with plans to raise $70.2m -- nearly 30% more than it raised in its landmark first sale late last year.

Last November SolarCity sold $54.4m of solar-backed asset notes, in a move seen as a breakthrough both for the company and the broader PV industry.

By yoking together thousands of disparate PV systems into a single pool of investments, and selling them on to institutional investors, SolarCity opened an entirely new source of competitive funding -- the lifeblood of companies playing in the booming US third-party ownership PV space.

Analysts believe that smaller rivals like SunRun and Vivint Solar will attempt to follow suit.

SolarCity raised $54.4m in its first sale of securized assets, with the notes offering a 4.8% interest rate and maturing in 2026. The notes were given an initial investment grade of BBB+ from Standard & Poor’s rating agency.

In its follow-on sale SolarCity will offer notes worth $70.2m, with a lower interest rate of 4.59% and a repayment date in 2022.

Although it intends to raise more money at a lower interest rate, the sale is still smaller than some analysts had predicted.

In a recent analysis, the National Renewable Energy Laboratory concluded that a $100m securitization fund could support about 72MW of residential PV capacity.

However, SolarCity claims that a separate $250m financing facility it recently secured will support more than 200MW of distributed PV.

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