U.S. Bancorp and East West Bancorp Inc. created a $47 million fund to finance renewable-energy projects that Borrego Solar Systems Inc. will install in California and Massachusetts.
The fund will be used to build 14 systems with direct current generating capacity of 11 megawatts, Bill Bush, chief financial officer of Berkeley, California-based Borrego, said by e-mail.
Borrego’s customers buy the electricity from systems it installs through a financing arrangement known as a power purchase agreement. The structure eliminates the need to pay upfront installation costs, and the power is bought at a fixed monthly rate that’s lower than a typical utility bill, according to the company.
Banks or other investors, including utilities, that create installation funds can take advantage of a 30 percent investment tax credit for solar energy.
U.S. Bank and East West Bank created a similar $46 million fund for Borrego in June and provided $56 million in project financing prior to that.