Axios Pro Exclusive Content

Sunstone Credit raises $20M for commercial solar loans

Jan 31, 2023
Illustration of a stack of solar panels with a currency band

Illustration: Aïda Amer/Axios

Sunstone Credit, a Baltimore-based solar financing provider for businesses, closed a $20 million Series A.

Why it matters: Loans fuel a big chunk of the residential solar market. But financing is much more difficult in the commercial sector. Sunstone is looking to change that balance.

Details: Greenbacker Capital Management led the all-equity round.

  • Earthshot Ventures participated, as well as existing investors Grotech Ventures, Cross River Digital Ventures, and Forbright Bank.
  • The round closed in December. The company declined to disclose the valuation.
  • Two members joined the board: Trixie Blair, vice president at Greenbacker; and Lawson DeVries, managing partner at Grotech.

Context: The commercial sector accounted for roughly 8% of new solar installations last year.

  • By comparison, residential made up about 31% of new installations.

State of play: There's a dearth of loan providers for businesses looking to install solar panels.

  • "Unlike residential, where financing can lean on credit ratings to help with financing, many small and medium businesses do not have credit ratings," Justin Baca of the Solar Energy Industries Association tells Axios.
  • "That makes underwriting loans and power purchase agreements challenging. Scalable financing solutions for the commercial space could increase the market size."

How it works: Sunstone's typical loan is $50,000 to $6 million for up to 20 years, a spokesperson tells Axios.

  • The terms generally don't require a personal guarantee from the business owner, nor put a lien on the property.
  • "The only collateral is the solar system," the spokesperson says.
  • Investors Cross River and Forbright Bank provide financing for Sunstone’s loan portfolio.

Of note: Sunstone founders Josh Goldberg and Wilson Chang previously founded Sunlight Financial, a residential solar finance provider that went public in 2021.

Editor's note: This story has been corrected to reflect the upper end of Sunstone's typical loan range is $6 million, not $66,000.

Go deeper