SolarIndustryMag.com: SolarCity Creates Master Backup Servicing Agreement

SolarCity Creates Master Backup Servicing Agreement

by SI Staff on Thursday 10 January 2013

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SolarCity has created a new option for its solar investment funds by completing what the company says is the industry's first master backup servicing agreement with an AA-rated financial institution.

"We're continuing to create enhancements to our investment funds that will attract new investors and expand the sources of capital for the rooftop solar business," says Lyndon Rive, SolarCity's CEO. "Our backup servicing is an optional enhancement that further reduces investment risk by placing an AA-rated entity as a backstop to ensure the continued servicing of our solar power systems."

Developers in a range of mature asset classes - such as mortgages, auto financing and student loans - often work with large financial institutions to provide investors with additional insurance against asset servicing risk in return for a lower cost of capital. Known as "backup servicing," this enhancement is a common attribute of mature asset classes that SolarCity is now making available to its solar investment funds, the company explains.

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