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U.S. military to be largest rooftop solar customer

Department of Energy provides $344 million loan guarantee to install solar panels at 160,000 homes and buildings on military bases.

The Department of Energy today backed a deal to connect solar electric panels at 160,000 locations on military bases, a move which could double the number of residential solar installations in the U.S.

The DOE said it has provided a conditional commitment to guarantee a $344 million loan for the SolarStrong Project, which will help the military meet its renewable energy targets and bring solar power to a many states which now have little.

SolarCity, which specializes in residential solar installation and financing, has been tapped to install, own, and operate the panels in up to 124 military bases in as many as 33 states. The five-year project will add 371 megawatts of solar capacity, bringing rooftop solar to military families' homes as well as warehouses and administrative offices on bases.

"This is the largest domestic residential rooftop solar project in history," Energy secretary Steven Chu said in a statement. "This groundbreaking project is expected to create hundreds of jobs for Americans and provide clean, renewable power to our military families."

SolarCity said it hopes to fill as many jobs as possible with U.S. veterans and military family members.

This deal brings a clever residential financing model to a scale never been done before. Rather than pay for rooftop solar panels, customers pay a monthly fee--either to purchase the energy produced by panels or a solar lease. The arrangement allows consumers to avoid the big upfront cost of panels and lower their monthly spending on electricity.

For the SolarStrong deal, investor U.S. Renewables Group will serve as the lead lender for the project in partnership with Bank of America Merrill Lynch. The DOE will guarantee loans provided for the residential solar installations.

"Without this group, we would not have been able to make the economics of this project work," said SolarCity CEO Lyndon Rive in a statement. "Now the solar industry has a debt model that can make distributed generation affordable on a massive scale.'

The first installation will be a four-megawatt solar array at the Hickam Air Force base in Hawaii. The DOE said that the distributed solar panels will help the Department of Defense meet its goal of getting 25 percent of its energy from renewable sources by 2025 without cost to taxpayers.

This loan guarantee follows another issued to a partnership of companies which plan to install rooftop solar panels on commercial buildings. The Amp project expects to install 733 megawatts of distributed solar panels on about 750 buildings.