Dive Brief:

  • SolarCity, the largest residential solar installer and financier in the U.S., started selling bonds online to ordinary investors on Wednesday in an attempt to help finance its growing business.  
  • While the company has made bond offers to institutional investors before, this new bond offering is open to anyone over 18 years of age with a domestic bank account and $1000 to make the minimum investment. 
  • SolarCity expects to issue up to $200 million in these new bonds, which have interest rates ranging from 2-7% and maturities from one to seven years.

Dive Insight:

SolarCity has long been at the forefront of financial innovation in the residential solar marketplace, helping to pioneer both solar bond offerings and the third party-ownership model. SolarCity put out a $575 million bond offer to institutional investors just last month, but this new offering is the first time the installer has reached out to ordinary investors. 

Other companies, such as Mosaic, are also using crowdfunding to finance solar projects, but they largely collect money from investors to finance small and medium-sized projects. SolarCity says its offer is different because it will pay back the bonds with revenue from monthly solar electricity payments made by customers in 15 states and the District of Columbia. The company says the bond issuance is aimed at investors who desire the security of a bond, but also want to support clean energy. 

"By expanding the pool of people who can participate in financing solar with us we’re diversifying our sources of capital,” Tim Newell, SolarCity's vice president for financial products, told the New York Times. "But this is new—o one has done this before—and we’re going to have to see how it proceeds."

Recommended Reading

New York Times: SolarCity Offers Bonds Online to Ordinary Investors