Recurrent Energy, which pays upfront costs for commercial solar projects in exchange for long-term power purchase agreements, said Wednesday it has raised $75 million.
Private equity firm Hudson Clean Energy Partners doled out the funding and anticipates giving even more money to Recurrent in the future, said Neil Auerbach, a managing partner at Hudson, in a statement.
San Francisco-based Recurrent plans to use the money to expand its business in North America, where the company's customers are, and eventually into other emerging markets, said Recurrent CEO Arno Harris at the Intersolar conference in San Francisco during a Greentech Media seminar.
"The funding gives us credit to engage with utilities, municipalities and global suppliers," said Harris.
Recurrent has already found some success with municipalities. In May, San Francisco announced that Recurrent would finance, build and operate at least 5-megawatts worth of solar projects on top of city-owned buildings.
Recurrent has persuaded Morgan Stanley to invest in its solar projects. Morgan Stanley, which would get a cut of the projects’ revenues, agreed to provide $100 million in 2008 and another $100 million in 2009.
The company has shown it can raise a lot of money, but the only customer it has disclosed publicly is the city of San Francisco.
The two-year-old startup has lined up Yingli Green Energy (NYSE: YGE), Suntech (NYSE: STP) and SolarWorld California as its solar panel suppliers.
Recurrent isn't the only one looking to make money from power purchase agreements. Recurrent pays the hefty cost of buying and installing solar panels and operates them for customers, who in turn agree to pay for the electricity generated.
Companies such as SunRun are working to own and operate solar projects on top of residential buildings and sell homeowners the electricity generated from the systems.
In June, the San Francisco-based SunRun said it raised $12 million in its first round of financing (see SunRun Grabs $12M, Eyes Residential Rooftop Market).
SunEdison and MMA Renewable Ventures, on the other hand, have signed power purchase agreements with businesses and governments for installing solar power systems on large commercial properties or public land.
In May, SunEdison said it would build a farm for North Carolina-based Duke Energy (see SunEdison to Build Largest U.S. PV Farm).
In December, MMA announced it had finished constructing a 14-megawatt installation at the Nellis Air Force Base in Nevada (see Largest U.S. Solar-Electric Installation Completed). The United States Air Force will purchase the power generated from the project.
--Associate Editor Ucilia Wang contributed to this article.