SunPower's (NASDAQ:SPWR) shares are popping today after the company announced a new residential solar financing deal with Google (NASDAQ:GOOG) (NASDAQ:GOOGL). On a stand-alone basis, the $250 million in financing isn't all that unusual. It's a pretty standard deal in today's solar market, but the company investing and the fact that SunPower will own more than half of the financing are important to note.

Spwr Residential New Home Community

Residential solar communities like this one are growing across the country. Photo: SunPower

Betting big on residential solar
The financing package is for $250 million and consists of about $100 million from Google and $150 million from SunPower. Google's investment is key because it has a ton of cash on its balance sheet to put into projects like this and is a big renewable energy investor with $1 billion already invested. But it also shows a continued shift away from developing its own projects and technologies -- as it did at the 392 MW Ivanpah concentrated solar project -- to investing in more traditional markets with a solar partner.  

Spwr Residential Close Up

Google and SunPower are financing thousands of individual rooftop installations like this one.  Photo: SunPower

Maybe more important is the fact that SunPower will finance more than half of the project. The early equity financing of projects comes with high returns on equity, but it also requires net income to effectively use tax breaks. SunPower is now able to finance some of its own projects and take advantage of these tax breaks because it's profitable.

We may also be seeing the groundwork for a YieldCo or another type of investment vehicle that SunPower could launch later this year. The company already said it will hold utility-scale projects on its balance sheet this year as it prepares for a YieldCo, and eventually residential assets would be attractive in that kind of spinoff.

Solar financing is becoming big business
The big advancement in the last year in solar is the growing number of companies willing to finance solar projects. Tech companies don't seem like a natural partner on the surface but many have billions in cash sitting on their balance sheets in search of yield. Solar can provide that and give some good public relations along the way.

I'd expect this to be the first of many financing packages between tech and solar, and Google will continue to be active in this market.

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Travis Hoium manages an account that owns shares of Berkshire Hathaway and SunPower. He also owns shares of and has options on SunPower. The Motley Fool recommends Google (C shares). The Motley Fool owns shares of Google (C shares). Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.