U.S. Bancorp backs SolarCity with $100M fund

Foster City, Calif., solar installer SolarCity secured $100 million in backing for solar projects from a division of U.S. Bancorp (NYSE:USB), the companies announced today.

The pair previously announced the investment in June without disclosing the size. SolarCity said today that U.S. Bancorp Community Development Corporation has doubled the size of the original investment, which is expected to fund the company's residential and commercial solar installations in 2009.

U.S. Bancorp provides SolarCity the capital to buy systems while using federal tax incentives to offset its own tax obligations. SolarCity plans to use the money to finance its zero-down financing models for solar, including power-purchase agreements (PPAs) and solar leases (see Installer SolarCity offers zero-down PPAs).

It's not the first time U.S. Bancorp has put up the funding for distributed solar by a Bay Area installer.

In 2008, U.S. Bancorp said it established a fund of up to $105 million for San Francisco-based SunRun to install 2,000 residential solar systems in the U.S. (see SunRun nabs $105M to ramp solar PPAs).

SolarCity said it has installed 4,000 systems since July 2006 in California, Arizona and Oregon.

Solar City is backed by Tempe, Ariz.-based solar module manufacturer First Solar (Nasdaq: FSLR), which made a $25 million investment in the company last year (see Solar sector deals continue to shine). 

In 2007, SolarCity closed $21 million in financing led by Draper Fisher Jurvetson, with additional contributions from JP Morgan and Elon Musk, chairman of SolarCity.