Tioga Energy on Wednesday said that it has received $10 million in initial funding to launch its solar power services business.
The company is one of a handful that is trying to bring project financing to organizations that want to avoid the large capital outlay associated with solar electricity.
Tioga Energy will work with partners to install panels on commercial and government buildings. Once installed, it will own the panels and handle the ongoing maintenance.
The idea behind these contracts, called purchased power agreements (PPAs), is that the customer pays for the energy generated by solar panels at a prearranged price, while the service provider owns and operates the panels.
Investors include NGEN Partners, Draper Fisher Jurvetson and Rockport Capital Fund.
Many industry experts contend that this financing model is critical to the adoption of solar energy because of the large up-front costs.