Energy provider SolarCity has announced a new addition to its celebrated solar investment funds offering a “back up” service to investors for extra security.
The company has completed what it believes to be the industry’s first master back up servicing agreement with an AA-rated financial institution, although details are yet to be released.
“We’re continuing to create enhancements to our investment funds that will attract new investors and expand the sources of capital for the rooftop solar business,” said Lyndon Rive, SolarCity’s CEO. “Our backup servicing is an optional enhancement that further reduces investment risk by placing an AA- rated entity as a backstop to ensure the continued servicing of our solar power systems.”
Developers in a range of mature asset classes such as mortgages, auto financing and student loans often work with large financial institutions to provide investors additional insurance against asset servicing risk in return for a lower cost of capital. Known as “backup servicing”, this enhancement is a common attribute of mature asset classes that SolarCity is now making available to its solar investment funds.