Edison International (EIX:US), the owner of California’s second-largest utility, bought a stake in Clean Power Finance Inc. to help the company expand its online financing service for residential solar energy systems.
Two additional power companies “that look a lot like Edison” also invested for the first time in Clean Power Finance as part of its $37 million Series C funding round, Chief Executive Officer Nat Kreamer said in a phone interview. He wouldn’t say how much each provided.
Closely held Clean Power Finance, based in San Francisco, has a software platform that connects investors with solar energy installers that are seeking funding to complete projects. Power companies have invested in the business model because it allows them to own part of the rooftop solar industry, Kreamer said.
“They recognize that distributed solar is a fast-growing segment of power generation and that there’s real money to be made there,” he said. “The power company of the future will own both centralized wholesale generation as well as distributed generation,” he said.
Duke Energy Corp. (DUK:US) has said it may expand into rooftop solar. NRG Energy Inc. (NRG:US), the biggest power provider to U.S. utilities, last month said it’s started installing rooftop solar panels on homes.
“This strategic round for us, with large power companies, is demonstrative of that,” Kreamer said. “You’re starting to see people really taking an interest.”
Google Inc. (GOOG:US) and Morgan Stanley (MS:US) have funded projects through Clean Power Finance’s service, which is currently managing about $500 million in project financing transactions, Kreamer said.
The company will use the investments to expand its services into new markets and “come up with more innovative products,” possibly a form of debt for “lending against the value of the solar system,” Kreamer said.
Clean Power Finance’s revenue increased by 325 percent in 2012, and most of that came from transaction fees earned through its online financing marketplace, Kreamer said.
The Series C round also included new investor Hennessey Capital Management and existing backers Kleiner Perkins Caufield & Byers, Claremont Creek Ventures and Google Ventures participated, he said.
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