SolarCity’s cash crunch continues to ease.
The solar energy systems installer plans to raise $347 million to fund solar installations at homes and small businesses through a pair of funds arranged through Citigroup.
The financing, coupled with a $305 million cash equity funding deal earlier this months, will give SolarCity more than $650 million in new financing to pay for its solar installations, many of which are sold using SolarCity’s no-upfront cost sales model. That approach makes solar energy affordable to many more consumers, but it requires SolarCity to constantly raise hundreds of millions of dollars to cover the upfront cost associated with the sales.
The September financing eases concerns, raised in regulatory filings linked to SolarCity’s proposed acquisition by Tesla Motors last month, that the company was facing a liquidity squeeze after lenders held back on providing financing while the proposed merger was in its preliminary stages.
The state, as part of the Buffalo Billion economic development initiative, is building a $900 million solar panel factory for SolarCity in South Buffalo that is expected to begin production by next June.
The Citigroup deal has two separate funds. One is expected to provide financing for $284 million in residential solar projects across the country, while the second is aimed at financing about $63 million in projects for small- and medium-sized businesses in California.
SolarCity also named Radford Small, the company’s executive vice president of global capital markets, to be its new chief financial officer. Radford, who joined SolarCity last year from Goldman Sachs’ clean technology and renewables group, will take over the company’s top financial position from Tanguy Serra, SolarCity’s president, who plans to leave the company at the end of the year. SolarCity is in the process of being acquired by electric vehicle maker Tesla.
“Due to overlap at the new company, he is going to pursue a new venture,” said Lyndon Rive, SolarCity’s CEO, in a statement.