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.