SolarCity collects $30m as solar investment surges

The residential solar panel installer has now raised $56m in total financing. Venture investment in US solar companies totalled $990m in Q3, a quarter over quarter increase of 66%.

SolarCity, a designer and installer of residential and commercial solar energy systems, has raised $30 million in venture financing, indicating a continuing interest in solar financing following a surge in the third quarter.

The majority of the investment, $25 million, was from thin film solar panel producer First Solar. A five-year supply agreement also was struck for First Solar to provide 100 megawatts of solar modules to SolarCity.

The remaining $5 million was provided by returning venture investors Draper Fisher Jurvetson and DBL Investors. The two firms took part in the $21 million Series C financing in September 2007 alongside Elon Musk, SolarCity chairman and chief executive of venture-backed electric car company Tesla Motors.

To date, SolarCity has raised a total of $56 million in financing.

Venture investment in US cleantech reached $1.6 billion in the third quarter of 2008, up 55 percent from the previous quarter, according to Ernst & Young. Late-stage financing in particular surged as cleantech companies enter their commercialisation phases. Late-stage financing experienced a quarter over quarter increase of 177 percent from $327 million to $906 million.

Solar investment experienced a 66 percent increase from the prior quarter equaling $990 million across 14 financing rounds. Of the 10 largest financing rounds in Q3, seven were for solar companies.

Among the largest financing was SolarReserve, a California-based developer of utility-scale solar power plants, which in September closed on a second round totaling $140 million from a syndicate of private equity investors.

The financing was led by Sustainable Development Investments, the renewable energy private equity group within Citi Alternative Investments, and Good Energies, a Swiss renewable energy-focused private equity fund. Other investors include the US Renewables Group, PCG Clean Energy & Technology Fund, Nimes Capital and Credit Suisse’s Customised Fund Investment Group.

Separately, thinfilm solar company AVA Solar raised $104 million in its second institutional round of equity financing. Early-stage venture firm DCM led the financing round. Also among the firms participating were GLG Partners, seed and early stage venture firm Technology Partners, real estate and private equity holding company Bohemian Companies and family-backed evergreen fund Invus.