We may be in the depths of a credit crunch, but some banks still seem willing to give loans to renewable energy projects. This morning, solar services firm SunRun is announcing a $105 million commitment by U.S. Bancorp (USB) to buy about 2,000 of the residential projects it installs.
Keep in mind that this isn’t equity or debt money that SunRun itself will receive. Because the company leases out solar arrays that it installs on customers’ roofs, the financing is more like a guarantee that SunRun can keep working at full speed without worrying about how to pay for the installations. For USB, the investment will provide predictable returns over the next several years as customers pay for the power they receive from their solar panels.
To date, only a few companies like SunRun have brought in similar financing. “This is a specialty asset class,” says Nat Kreamer, the company’s chief operating officer. “It’s not like getting a home loan — it takes real expertise.” But as with any type of asset, if it supplies steady returns, experts will appear. The USB commitment is a significant show of confidence during hard times.
SunRun is also adding David Buzby, the chairman of SunEdison, to its board. As one of the largest commercial and government solar installers in the country, the company has some real synergies with SunRun’s home installation business. Kreamer wouldn’t speculate on whether the two might collaborate, though.
The last equity funding SunRun received was a $12 million round in June. It’s based in San Francisco, Calif.