SunRun is among those companies that believe the quickest way to get solar panels installed en masse is to eliminate the hefty up-front cost.
The San Francisco-based start-up on Tuesday said that it has raised an additional $18 million, in a funding round led by venture capital firm Accel Partners. Accel is known for backing Facebook and BitTorrent.
The money will be used for SunRun to expand its solar financing beyond California, Arizona, and Massachusetts, according to the company. SunRun has previously raised $12 million from Foundation Capital, which also participated in this round, and has secured $105 million from U.S. Bancorp for financing solar installations
Even though the performance of solar photovoltaic panels continues to improve, the installation cost for a typical homeowner remains a large barrier. Before state and federal incentives, rooftop solar panels and installation can cost $20,000 to $35,000.
With SunRun financing, the purchaser pays an up-front fee of $1,000 and then a fixed monthly charge. SunRun owns and maintains the solar panels so it benefits from financial incentives, such as tax credits.
Likewise, municipalities are coming up with alternative ways of financing solar panels to cut the up-front investment. Berkeley, a forerunner in this area, has devised a way to allow homeowners to help pay for solar panels through property taxes.