Solar City has today announced that it has obtained private sector financing for its SolarStrong Project to put solar on the rooftops of 120,000 military homes across the US over a five year period. Bank of America (BAC) has now agreed to provide the finance, though the project has been slightly downsized from it original target of 160,000 homes.
This is very good news for the solar sector. SolarCity had of course been let down by the DOE, which in the immediate aftermath of the Solyndra affair had said that it could not complete SolarCity´s $275m application for a Loan Guarantee in time for the September 30th deadline for the program – more detail here. It is certainly favorable to see the private sector step in and fill the gap left where the DOE was unable to follow through with loan Guarantees in the immediate post-Solyndra environment.
Hopefully, this is a clear sign that the private sector will be willing to finance fairly large-scale solar and other renewable energy projects without the protection of DOE Loan Guarantees. This is a critical issue facing the solar industry in the US, which faces a 24 GW utility scale pipeline – a very positive source of continuing demand but one which needs to be financed on a large scale.
This latest development is a clear plus for the solar industry. This adds to two recent developments which suggest that the supply-demand imbalance in the global solar sector may finally be adjusting:
- A number of the top tier Chinese solar players have announced a halt to their previously extensive plans for capacity expansion – for a fuller discussion see here.
- The latest data shows something close to an explosion in demand for solar out of China and the rest of the Asia Pacific. Together with the adjustment to capacity plans mentioned above, this should help erode the current over supply and excess inventory position in the industry over the course of 2012. More detail here.