SolarCity (Nasdaq:SCTY) has found a new way to expand - by partnering directly with companies that providing financing for solar systems and access to their customer base.
In this first deal, SolarCity is partnering with American Honda. Honda is providing $65 million in financing for solar systems at dealerships and for Honda and Acura customers. The program will finance about 3,000 solar systems for homeowners and 20 for dealerships.
In exchange, Honda will get a return on its investment and another green program to tout.
Dealers will get preferential terms to lease or buy systems from SolarCity, and customers will get a sweetener on top of the the usual program - a solar system on their home or business with no upfront cost. They'll get an extra $400 discount on their solar electric bills.
What's important about this agreement is it may open the door for SolarCity to vastly extend its reach beyond the few banks, like Credit Suisse, which have loaned hundreds of millions of dollars, but don't bring them new customers. By partnering with corporations they get access to unlimited potential corporate customers.
Through this deal with Honda, SolarCity will potentially gain access to tens of millions of new customers as Honda reaches out to current and previous vehicle owners.
The offer will be available to Honda's customers in 14 states - where SolarCity currently operates.
They also plan to develop a program that integrates solar charging for Honda's electric vehicles.
Honda says it will expand the program if it catches on, noting that it has the potential to cut more carbon emissions than through the sales of electric cars.