Provider of clean energy SolarCity Corporation announced that it has created funds to develop more solar projects in the U.S. The $347 million fund has been created in association with leading global bank Citigroup Inc. (C - Free Report) . Note that increasingly stringent regulations on emission control have led to the creation of opportunities in the renewable energy space.
Financing of solar projects makes it easier for homeowners, and small- and medium-sized businesses to install solar panels with no upfront cost and eventually pay less for electricity than their present utility bills. In addition, solar projects help reduce emission levels — one of the major drawbacks of using fossil fuels for power generation, especially coal.
Details of the Fund
The entire amount has been divided in two portions — the first funding, worth $284 million, will be used for residential solar projects across the nation, while the remaining $63 million will be utilized for small- and medium-sized businesses (SMB) in California.
These funds are part of Citi’s goal to lend, invest and facilitate a total of $100 billion related to green projects in the next 10 years in its efforts to reduce activities that fuel climate change.
Extension in Tax Credit
The extension of solar tax credit last year will further drive growth in solar projects in the U.S. The legislation allows solar companies to continue claiming federal investment tax credits ("ITC") at 30% of the price of solar systems installed by businesses or homeowners. The ITC, which would have previously expired at 2016 end, will now continue through 2019.
Scope for Solar in U.S.
Global utilization of renewable energy is on the rise, thanks to its environment-friendly nature as well as the growing awareness of its benefits. At present, power generated from solar resources contributes a meagre 1% to the total electricity produced in the U.S.
Per a current report from the U.S. Energy Information Administration (EIA), addition of solar power projects will be the highest among all other clean sources of energy. The report also forecasts solar generation to increase to 246 gigawatts (GW) in 2040 from the 2015 level of 25 GW.
These trends are likely to benefit U.S.-based solar companies like SolarCity, SunPower Corp. (SPWR - Free Report) and First Solar, Inc. (FSLR - Free Report) immensely, going forward.
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