Google Partners With SolarCity to Finance $750 Million in Residential Solar Projects

Satellite image of USA at Night

By Arman Kazemi

March 05, 2015

For the second time in their history, Google and SolarCity have teamed up to bring more solar photo voltaic PV to U.S. homes.

The two companies announced a deal last week that creates a $750 million fund to finance solar infrastructure for approximately 25,000 homes across 15 states. Google is set to contribute $300 million as part of the deal, the company’s largest renewable energy investment to date.

The fund will add about 500 megawatts to SolarCity’s one-gigawatt of existing solar capacity with a customer base of almost 190,000, according to the company’s latest reports.

Once a customer decides to have SolarCity install rooftop panels on their home, the fund will cover installation and maintenance of the panels at no cost to the customer. SolarCity, Google and other investors in the fund will share ownership of the infrastructure.

As the project goes live, customers will pay a fixed monthly fee which is “usually cheaper” than what they already pay utility providers without the additional worry of fluctuating energy rates. Investors in the fund, meanwhile, take a share of profits made by selling energy back to the grid while benefitting from federal and state-level clean energy tax exemptions.

Although it’s often cheaper in the long run to finance your own solar PV through solar-specific or other low-interest loans, the high upfront costs of installation often make SolarCity’s lease-rate model more attractive to first time solar installers.

“Investment in this model allows us to offer solar to a lot more customers,” Jonathan Bass, a spokesperson for SolarCity, told the ThinkProgress blog. “. . . the fact that we can raise $750 million shows the demand for this service.”

The announcement follows on the heels of news a few weeks ago that another big Silicon Valley player is making its own investment in renewable energy.

Last month, Apple announced plans to collaborate with First Solar Inc. on its 2,900-acre California Flats solar farm. The $848 million investment will allocate 1,300 acres for Apple’s exclusive use to power its corporate offices and California stores.

The arrangement will account for 130 megawatts of new solar energy; enough to power about 50,000 homes, in what Apple CEO Tim Cook called the company’s “biggest and boldest project ever.”

This kind of first-tier corporate funding is part of a continuing trend that has seen investors take interest in a once risky sector.

“We’ve seen the movement in the sector of tech companies getting into the space” SolarCity executive Lyndon Rive told the Washington Post. “Corporations are starting to realize the importance of using clean energy.”