John Hancock Life Insurance has invested $227 million in a 201MW portfolio of residential, commercial and industrial projects held by US solar provider SolarCity.
SolarCity will retain ownership of the portfolio and a minority share of its 20-year underlying cashflows. After the contract is up, SolarCity will retain 99 percent of cashflows. The deal effectively allows the US solar provider to raise $3 per watt of solar generation capacity installed, including tax equity investments, upfront rebates and repayments.
The projects are spread among 18 states.
Radford Small, SolarCity’s vice-president of global capital markets, said in a statement: “Cash equity enables SolarCity to monetise a high percentage of cashflows to maximise upfront financing proceeds. This transaction is an exciting addition and diversification of our long-term financing options for solar assets.”
SolarCity’s business model of installing rooftop solar with little or no upfront costs to homeowners and businesses and being repaid via a leasing fee has helped the company remain the US’s leading distributed solar financier. It has picked up a number of other investments in the past year, most notably from Credit Suisse, which created a fund last April expecting to finance more than $1 billion in commercial energy systems. That was followed by a $400 million commitment in September from an unnamed “large financial institution”.
SolarCity’s leadership has been buying stakes in the company. In November, chairman Elon Musk invested $10 million and chief executive Lyndon Rive put in $3 million, along with $100 million from growth capital investor Silver Lake Kraftwerk.