climate-changed

Sunrun Seeks $500 Million for Rooftop Solar Growth

Updated on
  • Deal would be company’s biggest non-recourse debt financing
  • Sunrun is now the largest U.S. residential solar installer

Sunrun Inc. vans in Linthicum Heights, Maryland.

Photographer: Kristoffer Tripplaar/Sipa via AP

Sunrun Inc., the largest U.S. residential-solar company, is seeking about $500 million to fund more rooftop-power systems, according to people familiar with the company’s plans.

South African bank Investec Plc is leading the five-year deal, according to the people, who declined to comment because they weren’t authorized to speak publicly. The funds would refinance and expand an existing credit facility and represent the company’s biggest non-recourse debt financing deal to date. Sunrun declined to comment Thursday.

The San Francisco-based company rose 3.8 percent to $7.17 at 12:31 p.m. in New York, after earlier gaining as much as 4.6 percent.

Sunrun has emerged in recent months as the biggest U.S. residential solar installer, surpassing Tesla Inc., which acquired market leader SolarCity in 2016 for $2 billion. It’s one of the few large rooftop solar companies growing in a period of market contraction, and said this week that installations would increase 15 percent in 2018. That would be the same pace as last year, when it added 323 megawatts of panels.

“Based on the increasing acceptance of the residential-solar asset class and overall strong market conditions, we see opportunity to reduce our capital costs in 2018, both on new and existing debt transactions,” Edward Fenster, chairman of the San Francisco-based company, said during the company’s fourth-quarter earnings call Tuesday.

Sunrun is pursuing the deal at a favorable time. Project-finance lenders are awash in capital, and like contracted renewable-energy deals.

Financing may be available at rates 50 basis points to 100 basis points lower than its average deal from last year, Fenster said on the call.

“This is evidence that capital markets are open to Sunrun,” Sophie Karp, a New York-based analyst with Guggenheim, said in an email Friday. “The company can get non-equity financing on attractive terms to finance their expansion.”

(Updates with analyst comment in final paragraph.)
    Before it's here, it's on the Bloomberg Terminal. LEARN MORE