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SunEdison Unveils $50M Solar Partnership for California

NEW YORK (TheStreet) -- SunEdison (SUNE - Get Report) announced Friday it had secured funding for construction of 13.4 megawatts of solar installations for the state of California's hospitals and prisons.

Together with solar investors Sol Systems, SunEdison has partnered with Nationwide Mutual Insurance Company, a new name in solar tax equity investing, and the National Bank of Arizona to create a $50 million fund to build new solar facilities.

"The most interesting piece about this transaction is that Sol Systems is converting Fortune 100 Companies, like Nationwide, into new solar tax equity investors, at a time when such investments are critical for the solar industry," Natacha Kiler, a spokesperson for Sol Systems, told TheStreet, Friday.

Federal tax credits and other tax benefits are among the government's main incentives for solar energy, including a 30% tax credit for investment in solar energy through 2016. Specializing in financing for solar projects, Sol Systems develops partnerships by finding companies that could benefit from the tax credit and matching them with projects in need of financing.

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There currently aren't enough identified tax equity investors to finance all the plans for solar projects, so the arrival of new ones, like Nationwide, is key to solar development, Kiler said.

SunEdison will build the new facilities, some of which have already started construction. Once complete, SunEdison will manage the plants through its 24/7 Renewable Operations Center that currently monitors over 1.9 gigawatts of solar facilities internationally.

Quoted in the SunEdison press release, an official from California's Department of Corrections and Rehabilitation noted that by the end of 2014 the prison system plans to have approximately 41 megawatts of capacity, up from 37 megawatts currently. At that point about 15% of the total power use for the state's prisons will be coming from solar energy, creating a projected taxpayer savings over 20 years of about $84 million.

Shares of SunEdison got a boost Tuesday from a Morgan Stanley upgrade. The stock hit a 53-week high of $21.93 in early trading Friday but had given up that gain by midday and was last trading at $20.88. Year-to-date the stock is up over 51%.

SUNE Chart SUNE data by YCharts

-- Written by Carlton Wilkinson in New York City

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