SolarCity Completes $227 Million Cash Equity Financing With John Hancock

Leading US residential solar provider SolarCity announced that it completed its first cash equity transaction with partner John Hancock Financial, to the tune of $227 million.

The $227 million transaction will see John Hancock invest in a diversified portfolio of residential, commercial, and industrial solar power projects that, collectively, represents 201 MW of solar capacity. SolarCity will monetize the majority of 20-years of underlying cash flows, and will retain ownership of the assets and will continue to serve the customers. SolarCity will also retain a minority share of annual cash flows throughout the contract term, as well as 99% of post-contract cash flows.

The transaction between SolarCity and John Hancock raised $3.00 of financing per watt of solar generation capacity, including tax equity investments, upfront rebates, and prepayments — a blend of $3.24 per watt for residential projects, and $2.35 per watt for commercial projects.

“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,” said Radford Small, SolarCity’s Executive Vice President of Global Capital Markets. “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.”

“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,” said Recep Kendircioglu, Managing Director, Power & Infrastructure at John Hancock. “This investment further supports John Hancock’s commitment to clean energy and sustainability.”

The move follows less than a month after SolarCity closed two separate financing agreements totaling $338 million — $150 million with Credit Suisse, and $188 million with Bank of America Merrill Lynch, and another unnamed investor.