SolarCity announced that it has wrapped up its first cash equity transaction with John Hancock Financial.
John Hancock is set to invest US$227 million into a diversified portfolio of residential, commercial and industrial PV projects that represent 201MW of generation capacity.
SolarCity monetises a majority of 20-years of underlying cash flows, including solar renewable energy credits (SRECs) linked with the projects — and maintain ownership of the assets.
The deal raised US$3.00 of financing per watt of PV generation capacity for SolarCity, including tax equity investments, upfront rebates and prepayments — a mix of US$3.24/watt for residential projects and US$2.35 for commercial projects.
Radford Small, SolarCity's executive vice president of global capital markets, noted: “We're proud to partner with John Hancock, one of the most trusted brands in insurance and financial services, on this 20-year investment in our residential and commercial solar contracts. Cash equity enables SolarCity to monetize a high percentage of cash flows to maximize upfront financing proceeds. This transaction is an exciting addition and diversification of our long-term financing options for solar assets.”
Recep Kendircioglu, managing director, power & infrastructure at John Hancock, added: “We are pleased to partner with SolarCity in this transaction which represents an excellent opportunity to acquire long-term, contracted cash flows in renewable energy. This investment further supports John Hancock's commitment to clean energy and sustainability.”
The projects linked to the transaction are spread across 18 states, with no single state representing over 35% of the portfolio. A large number of the installations were completed in 2015.