SolarCity secures $345m in tax-equity funds

SolarCity, the largest US installer of rooftop PV systems, secured another $345m in tax equity in June and July, demonstrating its continued ability to raise huge amounts of capital despite uncertainty in the distributed solar sector.

California-based SolarCity also announced an expansion of its debt-aggregation facility by $110m, to $760m, and said it has expanded its solar renewable energy credit (SREC) financing facility to accept five years of hedged SRECs, which “significantly” lowers its cost of financing for SRECs.

Industry experts have warned that the US renewables industry – and perhaps solar, particularly – faces a tax-equity pinch over the next few years, with the expanding renewables market running up against a shortage of tax-equity providers. 

Last year the US renewables industry consumed around $13bn of tax equity, with solar for the first time taking a larger slice than wind.

SolarCity’s capital markets team has raised more than $1.5bn in project financing to date in 2016, and has now created funds and facilities to finance projects with more than 30 banks.

The ability to raise low-cost capital is a significant advantage for large players like SolarCity and Sunrun over small and regional players in the rooftop solar market.

SolarCity’s announcement comes a month after Tesla Motors offered to buy the company, in a tie-up that many observers see as holding long-term benefits for both companies, even if the near-term rationale is harder to work out.