Solar Financier Spruce Hires Goldman to Advise on Equity Deals

  • Hiring coincides with bumpy time for rooftop solar companies
  • ‘So much capital for solar assets but not equities,’ CEO says

Spruce Finance Inc., a Kleiner Perkins Caufield & Byers LLC-backed provider of consumer financing for residential solar and home efficiency projects, hired Goldman Sachs Group Inc. to help it attract equity investment.

“If we’re growing really fast, we have to think about how to get more equity,” Nat Kreamer, Spruce’s chief executive officer, said in an interview Friday.

The San Francisco-based company’s solar business grew 44 percent in the fourth quarter over the same period a year earlier, and recently raised equity from some existing investors. Kreamer declined to provide details about the equity raise, and said the company doesn’t need to raise cash immediately.  

The hiring of Goldman coincides with a few trends facing solar companies: strong investor appetite for projects with long-term power-purchase agreements, a spate of bankruptcies and looming consolidation. Sungevity Inc. and Suniva Inc. have both filed for bankruptcy in the past six weeks, and SunEdison Inc., once the world’s biggest clean-energy company, did so exactly a year ago.

“There’s a bad pattern there, but the real story is: why is there so much capital for solar assets but not equities?” Kreamer said. A Goldman spokesman declined to comment.

Kreamer pointed to a January deal involving Sunrun Inc., the largest independent U.S. rooftop solar company, as something “creative and smart.” National Grid Plc, the London-based utility, committed $100 million in equity to a partnership with Sunrun that will own about 200 megawatts of residential solar assets.

“We want to think about those kinds of smart things, too,” Kreamer said. “Those smart things may take many flavors, but there isn’t one flavor to talk about at this point.”

Spruce offers financing for residential solar, water-conservation upgrades and energy-efficiency projects. It has raised more than $2 billion from backers that including Edison International, Dominion Resources Inc. and Duke Energy Corp. As of October, Spruce had about 64,000 active loan and generation customers.

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