SolarCity Corporation and Bank of America Merrill Lynch have jointly created a renewable energy tax equity investment program to attract more investors. The first financing in the program has been closed.
Investments in the growing solar industry can deliver strong financial returns and at the same time can reduce water consumption, pollution and greenhouse gas emissions. According to The Solar Foundation's "National Solar Jobs Census 2014", the solar industry continues to exceed growth expectations, adding workers at a rate nearly 20 times faster than the overall economy and accounting for 1.3% of all jobs created in the United States over the past year.
Under the tax equity investment program, first-time and smaller investors can enter the renewable energy tax equity credit market through lower transaction costs and smaller investment sizes. The facilitated investors can participate in tranches of $20-$25 million, which is a smaller investment than has been previously required. The financing will cover the capital cost of the solar equipment and installation, enabling homeowners to pay for the power the system produces, typically at a lower rate than their local utility charges. To date, SolarCity has raised funds to finance more than $8 billion in solar projects.
The new tax equity investment program is part of Bank of America’s current 10-year, $50 billion environmental business initiative to advance low-carbon economic solutions through lending, investing and facilitating capital for clients around the world. Since 2007, Bank of America has dedicated $39 billion to low-carbon and other environmental business activities.