Last fall, we heard some great news: Solar City, a leading provider of solar power systems to homes and businesses in the US, had found a way to let investors participate in the shift to renewable energy. The “solar bonds” that they created and unveiled in October of 2014 work like this:
- Investors buy bonds from Solar City, to provide funding for solar projects.
- Solar City installs panels on customers’ businesses and homes — for no upfront cost.
- Customers then pay Solar City for the power generated by the rooftop systems, usually on a 20-year contract.
- Solar City pays interest to the bond holders from those payments, and returns the principal at maturity.