SunRun has secured financing from U.S. Bancorp to expand its solar power purchasing program to 2,000 more homes in the next year, the San Francisco start-up said Thursday.
U.S. Bancorp, the parent of U.S. Bank, has committed $105 million in tax equity, a fund that will allow the bank and SunRun to take advantage of the federal solar subsidy, which is a tax credit.
SunRun's business model--one being pursued by a handful of new solar installers--is to provide financing to homeowners and small businesses interested in installing solar panels.
Rather than pay the up-front cost of buying and installing panels, the consumer pays a smaller initial fee and then monthly electricity usage at a rate lower than the utility. SunRun and its financial backers own the panels and maintain them.
This sort of contract, called a power purchase agreement, has fueled rapid growth of solar electric installations at corporations in the past few years.
These types of investments--which are difficult to secure amid the slumping economy--are structured to offset tax bills for businesses and generate steady cash for investors.
So far, SunRun has more than 300 customers, all of which are in California, said President and Chief Operating Officer Nat Kreamer. He added that the company hopes to expand in the East Coast.
In addition, SunRun said Thursday that it has added David Buzby to its board. Buzby is the chairman of SunEdison, a company that handles purchase power agreements for corporations and utilities.
Update at 9:30 a.m. PT with correction to clarify SunRun's business model.