SolarCity is moving ahead with its landmark project to install solar PV on military housing across the country, literally doubling the number of residential solar systems in the US.
Bank of America Merrill Lynch announced they will finance the debt portion of the $1 billion project, and SolarCity will raise the rest through equity funds that qualify for the federal solar tax credit.
Over the next five years, SolarCity will install solar systems that it owns and maintains on as many as 120,000 military housing complexes, charging them lower rates for electricity than they currently pay to utilities.
At 300 MW of distributed energy, the SolarStrong project is the largest residential solar PV project in the US, covering 124 military bases in 33 states.
"This project demonstrates the long term viability of large-scale, distributed solar generation," says Jonathan Plowe, head of New Energy and Infrastructure Solutions at BofA Merrill. "We are excited to see the project through with SolarCity and extend our expertise and financing capabilities to propel residential solar to the next level."
Private equity firm U.S. Renewables Group (USRG) served as financial advisor for SolarStrong. When SolarCity began to plan SolarStrong in mid-2010, the company didn't think it could get financing for such a large project without a Department of Energy (DOE) loan guarantee.
After being accused of rushing to approve Solyndra's loan and the hoopla that followed, DOE tightened the documentation and reviews required, and SolarCity fell in the cross hairs. It didn't have time to satisfy the new requirements before the September 30 deadline.
"BofA Merrill never wavered when the loan guarantee wasn't finalized and worked with us to create a financing structure that works without it," says Lyndon Rive, SolarCity' CEO. "The fact that SolarStrong can move forward without a federal loan guarantee is a clear indication that long-term incentives such as the investment tax credit are working."
SolarCity expects SolarStrong to create thousands of solar jobs, and they hope that U.S. veterans and military family members will be able to fill many of them.
It will also help jumpstart the renewable energy industry in many states which have very little solar generation capacity today.