SolarCity Corp., the third-largest U.S. solar company, will start a fund with Centrica Plc’s Direct Energy unit to finance as much as $124 million of projects.
The fund will make solar power available for Direct Energy’s business customers at little or no upfront cost, the companies said today in a joint statement. Direct Energy, which provides electricity and related services in 14 U.S. states and Canada, will finance as much as $50 million of the total.
The agreement is a rare example of a renewable-energy company and a retail electricity supplier joining to fund projects. Many conventional power suppliers in the U.S. are lobbying to cut support for solar generation, arguing that it pushes up costs for customers that don’t use the technology.
SolarCity rose 22 percent to $36.58 at the close in New York, the most since May 17. The shares have quadrupled since trading began in December.
Following the agreement, many Direct Energy customers will pay less for clean power than they do for electricity from fossil fuels now, according to San Mateo, California-based SolarCity.
First Solar Inc. and SunPower Corp. are the largest U.S. solar companies by market value.