Solar project developer SunEdison has secured a financing package projected to reach as high as $1.5 billion to install solar power at businesses and utilities, the company said Tuesday.
SunEdison and First Reserve, a private equity firm that invests in energy, announced a joint venture to finance, build, and operate solar photovoltaic projects.
The initial investment in the joint venture is $167 million, and First Reserve may later raise another $150 million in equity. To finance large-scale solar projects, the joint venture will borrow money. The combined project financing debt and equity could result in $1.5 billion worth of solar projects, according to the companies.
The deal paves the way for installation of hundreds of megawatts worth of large solar photovoltaic projects in U.S., Italy, Spain, and Canada.
"The industry needs efficient and scalable financing models to meet demand. We expect the joint venture to help facilitate the development of our existing backlog of project opportunities and prospective projects that meet our development criteria," Carlos Domenech, president of SunEdison, said in a statement.
Solar photovoltaic technology is mature, but financing options are needed to make solar power more accessible. Rather than pay the cost of installation up front, many commercial customers of the joint venture are expected to sign a long-term power purchase agreement.
Under this arrangement, the customer will buy electricity that the solar array produces, but the actual equipment is owned by the SunEdision-First Reserve joint venture. The companies said that Beltsville, Md.-based SunEdison will develop the projects and First Reserve will lead project financing.
SunEdison, which was acquired in October by silicon wafer manufacturer MEMC Electronic Materials, said last week that it has signed a deal with Weingarten Realty Investors to lease roof space for solar panels. SunEdison will purchase and install the panels and sell the electricity they generate to Weingarten, which could offer it to consumers at lower-than-retail rates, according to the companies.