SolarCity Bags $21.5M for Solar Rooftops

Solar was by far the largest sector that venture capitalists poured money into last quarter. And it looks like that’s not stopping this quarter. On Wednesday solar installer and financier SolarCity announced that it has raised another $21.5 million in venture funding led by Mayfield Fund, and including Draper Fisher Jurvetson, DBL Investors and Generation Capital.

SolarCity installs solar panels on rooftops and offers home owners financing deals, where the company pays the upfront installation cost in exchange for a monthly lease payment and a contract that sells the electricity to the customer at a fixed rate. That deal brings the upfront cost of a rooftop solar installation — which can be tens of thousands of dollars and is a major barrier to the proliferation of rooftop solar — way down.

The company says the new funds will help it expand and also potentially make more acquisitions. Earlier this year SolarCity bought the assets of home energy efficiency software startup Building Solutions. Currently operating in Arizona, California, Colorado and Oregon, the solar installer plans to expand to 5-10 additional states in 2010.

In addition to its millions in venture capital backing, SolarCity also recently managed to raise financing for solar installations from an interesting source earlier this year: utility PG&E. Pacific Venture Capital, the investment arm of PG&E’s parent company, plans to provide $60 million in tax equity financing for SolarCity to install an estimated 1,000 solar systems at homes and businesses in 2010 — primarily in California, the country’s largest solar market, but also in Arizona and Colorado. It’s much more common for a bank to invest in tax equity for solar rooftops — basically buying clean energy tax credits to shelter otherwise taxable income.

SolarCity was founded in 2006 and has also been backed by Tesla Motors CEO Elon Musk and JP Morgan. According to a report from NeXt Up Research, on the online marketplace for trading shares of private companies SharesPost, SolarCity‘s exit valuation would be between $375 million and $443.8 million, or $15.49 to $18.36 a share. That’s up from a per-share estimate of $12.43 to $13.90 last year.

For more research on cleantech financing check out GigaOM Pro (subscription required):

Cleantech Financing Trends 2010 & Beyond