Solar installer and financier SolarCity announced on Thursday that it plans to raise a $750 million fund to invest in installing solar panels on the rooftops of home owners, and $300 million of that fund will come from tech giant Google. While Google has put over $1 billion into clean energy projects over the years, the commitment to the SolarCity fund is Google’s largest to date, and the entire fund will be the largest one ever created for residential solar projects.

The deal shows the momentum behind the booming solar panel industry in the U.S. Solar energy represented over a third of all new electricity in the U.S. in 2014, and that could grow to 40 percent in 2015, which would be a new record. The solar industry is now a major U.S. employer, employing twice as many workers as the coal industry; SolarCity employs more workers in California than the state’s three large utilities combined, said SolarCity CEO Lyndon Rive at the ARPA-E Summit earlier this month.

This isn’t the first time that Google has put money into a SolarCity fund. In the Summer of 2011, Google committed $280 million into a similar solar installation fund created by SolarCity. That collaboration was one of the first examples of a corporate entity (and not a bank) agreeing to invest in solar projects. Usually SolarCity works with banks like Citi, U.S. Bancorp, or Goldman Sachs to raise these types of funds.

The remaining $450 million of the $750 million fund will come from debt financing, says a SolarCity spokesperson. The entire fund will cover the upfront costs of installing solar panels on the roofs of “thousands” of homes across 15 states.

SolarCity’s business was built around creating solar-as-a-service deals where it can offer a homeowner the installation of solar panels and the accompanying solar energy in exchange for a monthly fee over several years (say, 20 to 25 years). That monthly fee is usually less than the homeowner would pay for their monthly utility bill. Thus the homeowner can buy solar energy without having to pay for the high upfront cost of the installation of the solar panels.

SolarCity panels on a Walmart, courtesy of SolarCity.

This type of solar-as-service deal has transformed the solar energy industry and opened up solar energy for tens of thousands of people that wouldn’t previously have been able to afford it. By the end of 2014 SolarCity, the largest installer in the U.S., had installed a cumulative 1 GW of solar panels on its customers rooftops, and the company plans to install another 1 GW within 2015. A gigawatt is the size of a large natural gas, coal or nuclear plant.

Google wants to invest money into funds like SolarCity’s because it can provide a return (8 to 12 percent) on the investment. The deals with homeowners tend to generate pretty reliable revenue over time because homeowners — particularly the kind getting solar installed — tend to pay their utilities. But because these financing deals are becoming more mainstream as solar becomes more of a commodity, the returns have been slipping in recent years.

Image copyright Courtesy of SolarCity.

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