The company said that by placing the equity investor and lender group separately, it was able to achieve a pre-tax, weighted average cost of capital for the transaction of 7.4%.
A weighted average cost of capital includes the cost of debt plus equity, according to Axiom Capital analyst James Bardowski.
But debt is always cheaper than equity, he said in an email to TheStreet, meaning it would make sense that the cost of equity on its own is significantly higher than the 7.4% SolarCity reported Monday.
SolarCity boasted that the 7.4% cost of capital for Monday's deal was a "significant improvement" over its first cash equity raise earlier this year.
The company in May managed to secure equity financing through a deal with John Hancock Financial, in which JH would invest $227 million in a diversified portfolio of residential, commercial and industrial solar power projects that collectively represents 201 megawatts of generation capacity.
The deal with John Hancock did not include any debt, however, implying that all of the 8.2% return required by the lender was equity, Bardowski said Monday.
Since the amount of SolarCity's loan and the related borrowing costs are at this point unknown, and "next to no details" were provided regarding the company's 18-year amortizing loan, Bardowski said it appears the $305 million was all in cash equity.
"Thus, we cannot single out how much just the equity part of the deal cost," he wrote. "We are waiting on comments from SCTY, but at first glance, it looks like the 'significant improvement' is a bit misleading."
Meanwhile, Morningstar analyst Andrew Bischof said Monday that the transaction supports his thesis that SolarCity continues to face a troubling rise in cost of capital.
The company's recent high-interest, short-term bond offerings were bought mainly by SolarCity insiders, including Chairman Musk, CEO Lyndon Rive and chief technical officer Peter Rive, Bischof wrote in a Sept. 9 note.
SolarCity announced Aug. 17 the sale of $124 million in 6.5% solar bonds set to mature in February 2018.
The analyst said merger regulatory filings concerning the pending $2.6 billion tie-up with Tesla Motors (TSLA - Get Report) indicate tax equity financing has all but diminished for the company since previous tax equity partners failed to provide additional funding for the August deal.
Morningstar believes SolarCity has strong long-term growth prospects, Bishof wrote in the recent note, but the firm also feels management will not be able to navigate upcoming headwinds, the most significant of which is maintaining access to cheap capital such as the tax-equity financing that helped fund SolarCity's initial rapid expansion.
"If supportive public policies such as net metering, renewable portfolio standards, and tax credits fall away, SolarCity will have to compete with traditional energy sources, which for now are cheaper," he wrote.
Moreover, if a deal with Tesla somehow falls through, the analysts' opinion of the company would fall with it.
A botched deal with Musk's Tesla would see SolarCity valued at just $10 per share in Bischof's eyes.
That's $8 per share less than the analyst's fair market value estimate with a deal going through and about the same amount below the company's Monday share price, which was up nearly 6% to around $17.75 on the financing news.
In any event, the mix signals the company has been sending haven't helped it with investors thus far, Bishof said, implying Monday's possible sugar-coating could be yet another step in the wrong direction for the struggling solar industry giant.