SunRun nabs $105M to ramp solar PPAs

San Francisco-based SunRun said today it plans to use $105 million in project financing from U.S. Bancorp (NYSE:USB) to install 2,000 residential solar systems in the U.S. under its power-purchase agreement model.

The installations comes a little more than a year after SunRun became the first in the U.S. to offer residential PPAs, COO Nat Kreamer told the Cleantech Group. The company has done more than 300 residential installations in California through partners such as San Luis Obispo, Calif.-based REC Solar and San Diego-based Borrego Solar Systems, he said.

To assist with the anticipated growth, SunRun added David Buzby as member of its board of directors. Buzby also serves as chairman of Beltsville, Md.-based SunEdison, although there is not a financial relationship between SunRun and SunEdison. 

Under SunRun's PPA, customers pay about $3,000 to $20,000 up front and then buy power for 13.5 cents per kilowatt hour for 18 years. SunRun owns and maintains the systems.

Solar PPAs are one of the new financing models that have helped accelerate the field this year (see Eight cleantech developments to watch for in 2008).

In September, Mill Valley, Calif.-based Solar Power Partners closed on $100 million in debt and equity financing for its PPA model for commercial and government systems (see Solar financier SPP nets $100M, aims for more).

San Francisco's Recurrent Energy said in July it raised $75 million from private equity firm Hudson Clean Energy Partners for its PPA model, in addition to $200 million in financing from Morgan Stanley in December (see Solar continues to take in cash).

Part of the cost-savings of such PPAs has been that commercial entities aren't subject to the cap on incentives for solar systems that residential customers are under the existing U.S. investment tax credit for solar. But the new eight-year policy as of Jan. 1 removes that cap for residential units (see Solar takes stock after tax-credit battle).

Kreamer said he doesn't think that change will hurt the prospects for companies such as SunRun because PPAs dominate the commercial solar sector, which is already eligible for the unrestricted incentives.

Kreamer declined to say how the current financial turmoil affected the company's ability to raise project financing. He said he doubted the uncertainty would discourage consumers from entering into PPAs because the payments replace an existing monthly expense, with the opportunity to save money when electric rates increase. 

In June, SunRun raised $12 million in a round led by Foundation Capital, with participation from Parker Weil of Merrill Lynch's clean energy investment banking, and Gregory Avis, founder and managing director of Summit Partners (see Sun worshipers lead the week).

SunRun gets its panels from makers including Akeena Solar, SunTech, Sanyo, Sharp Solar, Mitsubishi and SunPower. SunRun has 18 employees.