Another solar-as-a-service company, part of a growing industry that helps to install and operate solar panels, is ballooning in size. Solar Power Partners, a Mill Valley, Calif. startup that only had $6 million in funding a year ago, is announcing that it has reached $100 million in funding with some $60 million more available for project financing.
Solar Power Partners specializes in power purchase agreements (PPA), which mean that the beneficiary of the solar panels doesn’t pay for them. Instead, SPP buys and installs the panels where they’re needed — for instance, on a warehouse roof — and retains ownership, handling their maintenance and upkeep. They then sell power from the panels to the buyer for a fixed rate.
PPAs have become popular because both businesses and consumers are reluctant to dig into their own wallets to buy panels outright. With a PPA, they get the panels, while installers like SPP get a margin from the electricity they sell. In turn, the business that signed the PPA can expect to benefit from having a fixed electricity rate for a decade or more as utility power prices rise.
We’ve written about similar companies. SunRun, for example, just took $12 million to sell PPAs to consumers. SPP’s own model markets PPAs to agriculture, businesses and government, so it’s more competitive with companies like Recurrent Energy, which is building a 5-megawatt plant in San Francisco.
SPP has a number of investors, including Globespan Capital Partners, Dry Creek Ventures, Silicon Valley Technology Group, Energy Investors Fund, and the banks who lend money for construction of solar plants.