Bank of America Merrill Lynch finance for US military solar project

29 November 2011 (Last Updated November 29th, 2011 18:30)

SolarCity and the Bank of America Merrill (BofA Merrill) have agreed the terms of financing for SolarStrong, a five-year plan to build more than $1bn in solar power projects.

SolarCity and the Bank of America Merrill (BofA Merrill) have agreed the terms of financing for SolarStrong, a five-year plan to build more than $1bn in solar power projects for privatised military housing.

Jonathan Plowe, BofA Merrill head of new energy and infrastructure solutions, said the plan presents the long-term viability of large-scale, distributed solar generation.

"We are excited to see the project through with SolarCity and extend our expertise and financing capabilities to propel residential solar to the next level," Plowe added.

As part of the project, SolarCity plans for a partnership with the country's privatised military housing developers to install the rooftop solar systems.

The SolarStrong project is expected to generate up to 300MW, which could provide enouhg power for 120,000 military homes.

Private equity firm US Renewables Group (USRG) served as financial advisor for SolarStrong.

SolarCity and USRG started the loan guarantee application process under DOE's Section 1705 loan guarantee programme in October 2010, and BofA Merrill subsequently joined the application as the lender.

The DOE announced a conditional commitment of a partial loan guarantee for SolarStrong on 7 September, 2011, but the firms were unable to finalise the deal before the 30 September deadline.

SolarCity and BofA Merrill continued to work to closely with SolarStrong despite the DOE loan guarantee.

Lyndon Rive, SolarCity CEO, said: "The fact that SolarStrong can move forward without a federal loan guarantee is a clear indication that long-term incentives, such as the investment tax credit, are working."

Tim Newell, USRG Renewable Finance managing director, added that the project is a groundbreaking transaction that represents a key milestone for the US solar industry.