SolarCity launches tax equity fund

One of the country’s largest residential solar installers is planning to expand its capacity with the establishment of a new financing stream.

SolarCity and U.S. Bancorp Community Development Corp. June 3 announced the creation of a tax equity fund to finance residential and commercial projects.

The fund is expected to bolster Foster City-based SolarCity’s SolarLease program, which allows residential customers to finance home solar systems through monthly payments without a large initial investmens. SolarLease also applies to commercial power purchase agreements.

A lack of tax equity financing has limited solar growth, SolarCity CEO Lyndon Rive says. The companies did not disclose the size of the fund, which is one of only two such funds closed in the United States in 2009—the other also included SolarCity, in an April deal with Greystone Renewable Energy Ventures.

SolarCity says the fund will allow the company to boost its installation capacity and hire about 100 new installers.

The company's SolarLease program, which is available in California, Oregon and Arizona, is one of several strategies public and private entities are employing to remove the hurdle of upfront costs to solar installations, such as finding solar systems through property tax assessments.