Last week, California utility company Pacific, Gas, & Electric (PG&E) subsidiary, Pacific Venture Capital LLC, and the solar energy provider, SolarCity announced $60 million in tax equity financing for solar installations. The investment is funded by PG&E Corporation shareholders, and is expected to allow SolarCity to install more than 1,000 additional solar systems for homes and businesses. The tax equity financing investment is the first of its kind by a utility holding company, and the first collaboration between a utility holding company and a solar power provider.
Most of the solar systems installed will be in California, but some will be installed in Arizona and Colorado. Based in Foster City, California, SolarCity serves 500 communities in Arizona, California, Colorado, and Oregon. The company plans to expand its services to five to ten more states this year.
“This investment represents an opportunity to broaden access to renewable energy, consistent with our focus on advancing clean, low-carbon energy solutions and California’s goals to expand rooftop solar,” said Rand Rosenberg, PG&E Corporation Senior Vice President, Corporate Strategy and Development. “Equally significant, it enables us to take an initial step toward gaining valuable experience with a technology and a marketplace that may become increasingly important in the future.”
“SolarCity strongly believes solar companies and traditional energy industry players must work together if solar power is to become a mainstream source of electricity in America,” said Lyndon Rive, SolarCity’s CEO and cofounder. “PG&E has always been a leader in renewable energy adoption. This agreement is yet another example of PG&E leadership in clean power generation that hopefully others can follow.”
Pacific Venture Capital will receive lease revenues from SolarCity customers. SolarCity allows homeowners to lease its solar energy systems with no money down. Businesses can also lease the company’s systems through power purchasing agreements (PPAs). With PPAs, businesses can also have solar energy systems installed with no money down, and only have to pay for the electricity produced and used each month.
Leasing systems to homeowners and businesses makes solar energy more affordable, which can have the added bonus of increasing the U.S. rate of solar energy adoption. As Rive told the San Jose Mercury News in December, the rate of adoption in the U.S. “is still really slow.” He added, “If we continue at this pace, we’re not going to make a difference. The upfront cost to the consumer is still the biggest barrier.”