SolarCity Corp., a solar-energy developer chaired by billionaire Elon Musk, won financing from Goldman Sachs Group Inc. for more than $500 million in rooftop solar systems that the company will complete this year.
The lease-financing agreement will help SolarCity build about 110 megawatts of solar power systems with little or no up-front cost for homeowners and businesses, San Mateo, California-based SolarCity said today in a statement.
The deal is the largest single financing agreement for rooftop systems in the U.S. and will raise awareness of the quality of the solar-lease asset class, SolarCity Chief Executive Officer Lyndon Rive said in a telephone interview.
“We hope it sends a signal that solar is a stable and reliable asset to invest in,” Rive said in an interview. “These aren’t luxury yachts we’re talking about, it’s your energy, and the default rates are lower than mortgages.”
During the first quarter, SolarCity said it invested $138.2 million in solar systems as demand for rooftop panels from homeowners and businesses surged.
For New York-based Goldman Sachs, the SolarCity agreement will help reach the Wall Street bank’s goal of financing $40 billion in renewable energy during the next decade, said Stuart Bernstein, global head of clean technology.
“SolarCity’s range of distributed solar solutions targeting a wider customer base will help us move toward a low carbon energy future,” Bernstein said in the statement.
The financing agreement also allows SolarCity to extend credit to homeowners with lower credit scores, Rive said.
“When we started you needed a FICO score of 720 or higher,” Rive said. “Now it’s more like 680 and I suspect in the near term we’ll be at 650.”
SolarCity climbed 11 percent to $35.69 at the close in New York. The shares have quadrupled since the initial offering in December.