Earlier this week, Citigroup Inc. (NYSE: C), one of the U.S.’s largest banks, invested $40 million into SolarCity’s residential projects, which include solar leases with no upfront costs in select states. The investment allows SolarCity to offer its programs to more homeowners on the West Coast and represents the first time that Citi has invested in residential solar energy on a large scale.
SolarCity has been aggressively expanding its SolarLease program into new states lately. In early January, the company announced that it is expanding its solar-leasing program into Oregon. Apparently not satisfied with one new state in a month, the company said it would expand into Maryland and Washington, D.C. a few days later.
The company leverages federal and state incentives to remove the upfront costs of installing solar for homeowners, businesses and other organizations. Customers then repay the costs of the system via a fixed monthly rate that’s lower than their grid-supplied electric costs.
“This is Citi's first investment in residential solar power and distribution,” said Citi spokesperson Tyler Daluz. “The $40 million fund will build on SolarCity's existing plans to grow and expand in the U.S.”
The investment from Citi is part of a growing portfolio of financial institutions, including U.S. Bancorp (NYSE: USB), that have invested in SolarCity.
“We have a range of funds,” said SolarCity spokesperson Jonathan Bass. “This is our twelfth fund. This particular fund is primarily designed for West Coast developments.”
SolarCity already has $700 million in invested funds to support its programs, which include the SolarLease. Bass said the Citi investment was particularly thrilling.
“What’s exciting about this one—which we expect to be the first in a series—is this is Citi’s first residential solar venture,” he said. “It’s a huge vote of confidence that they’re doing it with us. It’s exciting to see leading financial services companies get involved in solar. It’s going to be high-volume deals like this that help us increase adoption of solar.”
Though it’s the first investment in residential solar power, it’s not the company’s first foray into renewables and climate change.
“Citi has provided financing for other solar projects and has a vast portfolio of activity in the renewables space,” Daluz said. “At the end of 2010, Citi led the financing for Shepherds Flat, an 845-megawatt wind farm that when complete will be the largest wind farm in the U.S.”
In all, the company, according to Daluz, has invested $24.3 billion as part of its climate change initiative.
Image courtesy of SolarCity.