Bloomberg News

Morgan Stanley Backs Solar Energy Leases for Clean Power Finance

May 03, 2012

Morgan Stanley (MS:US) and Main Street Power Co. are providing funds that will enable Clean Power Finance Inc.’s customers to install as much as $300 million in residential solar energy projects.

The equity investments, along with debt from lenders led by Zions Bancorporation (ZION:US), will finance rooftop photovoltaic systems on homes in California and Arizona, Clean Power Finance said today in a statement.

The closely held San Francisco-based company has developed software that connects investors and solar installers that may lack resources to provide financing for their own customers.

“We’re constructing a platform, or as I think of it, a conduit between the capital markets and the installers,” Kristian Hanelt, senior vice president of renewable capital markets for Clean Power Finance, said in a phone interview.

Morgan Stanley “is investing for the tax benefits,” including a 30 percent investment tax credit for solar, while Main Street will be the long-term owner of the systems, he said.

The MySolar fund is the company’s third and the industry’s largest for non-military installations, Hanelt said. SolarCity Inc.’s $1 billion program to install solar panels on military houses is the largest. It’s backed by $350 million in loans from Bank of America Corp. and an undisclosed amount of tax-equity financing from U.S. Bancorp.

“We’ve brought together a group of parties who all are interested in participating in the explosive growth that’s happening in residential solar,” Hanelt said.

Enabling Solar

Other companies enabling residential solar, including SolarCity, SunRun Inc. and Sungevity Inc., finance installations for homeowners through leases or long-term power purchase agreements that allow them to install systems at little to no upfront cost to customers. The companies pick the installers or do the work themselves.

Clean Power Finance says it’s working with more than 1,500 installers in every U.S. state.

“We don’t actually take equity in these projects ourselves,” Hanelt said. “We think that’s a bad use of venture capital dollars and that we’d be better off spending the Kleiner Perkins and the Google Ventures venture capital on building our business itself,” he said.

Including the latest fund, Clean Power Finance has raised about $500 million to finance installations for its customers, according to the statement. Google Inc. (GOOG:US) created a $75 million fund in September. The size of the company’s initial fund and the investors wasn’t made public, Alison Mickey, a Clean Power Finance spokeswoman, said by e-mail.

To contact the reporter on this story: Andrew Herndon in San Francisco at aherndon2@bloomberg.net

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net


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Companies Mentioned

  • MS
    (Morgan Stanley)
    • $38.51 USD
    • 0.41
    • 1.06%
  • ZION
    (Zions Bancorporation)
    • $28.39 USD
    • 0.19
    • 0.67%
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