SolarZero Pioneers New Financing Model To Raise $195M Of Debt In NZ First

In a New Zealand first, leading provider of solar and battery systems, SolarZero, has transformed its financing model to raise $195 million of debt facilities under a scalable ‘split-series’ structure. This enables SolarZero to increase its customer-base by more than 50% and bring them closer to realising their purpose of accelerating New Zealand’s renewable energy transition, whilst saving kiwis money on their energy bills.

With Societe Generale as arranger and with a credit enhancing structure made possible by New Zealand Green Investment Finance (NZGIF) under its Solar Finance Programme, SolarZero has split its growth financing trust into two distinct series – the Customer Series and the Battery Series, each tailored to cater to different types of investors.

Led by SolarZero Chief Financial Officer, James Allard, the innovative financing structure was developed to meet the unique demands of SolarZero's business model which combines both residential customer contracts and Virtual Power Plant (VPP) revenue streams. While financiers are familiar with financing asset backed customer contracts, the market for SolarZero’s VPP services is developing quickly and requires more bespoke financial structuring.

By dividing the trust into two series, SolarZero effectively attracts a broader range of investors. The Customer Series has been standardised to ensure broad appeal and focuses on financing the widespread adoption of SolarZero's solar subscriptions via asset backed customer contracts – thus removing the capital barrier for customers wanting to adopt solar energy and save money right away through their ‘solar as a service’ model.

Meanwhile, the Battery series supports SolarZero to build out their Virtual Power Plant (VPP) technology and support the national grid in potential emergencies (such as the 10th May cold snap when the VPP supplied 30MW to avert an emergency) and appeals to more ambitious and outcome oriented investors, such as NZGIF.

The success of this financing model not only supports the operational needs of SolarZero but also sets a robust foundation for future growth. With the support of Societe Generale and participating in the NZGIF Solar Finance programme, SolarZero aims to use the trust to finance new customer installations and sufficiently scale the operation, enabling them to facilitate periodic long term debt refinancings with other investors and scale its debt facilities to $1b+ over the next 6-7 years.

It is estimated that New Zealand's transition to 100% renewable electricity requires approximately $42 billion of investment across business, technology and government. This collaboration between Societe Generale, NZGIF and SolarZero is a positive step toward meeting this national goal; it paves the way for similar collaborations for the energy sector as New Zealand approaches its 2050 carbon net zero deadline.

James Allard, Chief Financial Officer of SolarZero, says, "This is a really exciting milestone not only for us, but for Aotearoa’s structured debt space. Going forward, it’ll open the door to a range of new investors, enabling us to continue to scale our customer base and help more kiwis save money by switching to solar, while expanding our Virtual Power Plant which we expect will play a meaningful role in supporting New Zealand’s energy transition.

“The collaboration with Societe Generale and NZGIF, and everyone’s hard work, have been instrumental in achieving this milestone. Their understanding of our business model and vision has been vital and exemplifies the potential of combining financial expertise with a commitment to sustainability,” he adds.

Arkady Lippa, Co-Head of Securitization & Fund Financing for Asia Pacific at Societe Generale, says, “Having supported the team at SolarZero in the past, we were excited to take on this new, pioneering opportunity within the local landscape and beyond. Structured debt and the financing of environmentally sustainable projects are crucial for fostering innovation and accelerating the transition to a carbon net zero economy.

“With this financing, we’re proud to continue supporting SolarZero's vision, demonstrate the power of public and private collaboration, and affirm Societe Generale’s longstanding commitment to supporting energy transition.”

Jason Patrick, NZGIF Chief Investment Officer, says, “NZGIF Solar Finance was established as a repeatable financing facility, so it’s great to see this second round of financing become available with the support of Societe Generale. Public and private sector capital, working together with companies like Solar Zero, is exactly what is needed for New Zealand to reach its decarbonisation goals.”

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