SolarCity is the largest installer of solar panels for residential homes. According to their press release yesterday they provide one out of every three solar systems installed in the U.S. To date they have installed around $5 billion worth of solar panels in 15 states and the money for this has been raised from large institutional investors. Now, they are looking to do something different.
Yesterday, SolarCity announced the launch of Solar bonds. They intend to raise $200 million from individual investors in all 50 states. There are no minimum income requirements to invest – as long as you are over 18 years of age, have a U.S. bank account and can afford the $1,000 minimum investment then you can invest. Like most investments like this offered to the public there is a prospectus on file with the SEC where you can read all the details including the many risk factors.
An Unsecured Investment Paying 2-4%
- 1 year – 2%
- 2 year – 2.5%
- 3 year – 3%
- 7 year – 4%
Keep in mind that these are unsecured loans to SolarCity, there are no assets backing these bonds. So, if you are looking at this as a purely financial transaction the returns are not very compelling. However, there are plenty of impact investors who are looking for a financial return while at the same time being socially responsible. According to this Forbes article published late yesterday on their first day there was very strong demand for these solar bonds from investors.
Even though this can’t really be considering p2p lending there is a direct link between this industry and SolarCity. Prosper co-founder John Witchel is also the co-founder of Common Assets a company acquired by SolarCity in December last year. Common Assets is providing the technology platform to make this solar bonds offering happen and Witchel is now the Senior Technology Architect at SolarCity according to his LinkedIn profile. [Read more…]