[kragen]

On the contrary, personal loans from banks routinely charge much higher interest rates than commercial paper. Think about the interest rate on a money market account, which consists of bonds. That's the rate PG&E is going to pay if they float a bond issue to build a solar power station. Large companies, particularly including electric generation utilities, can also get loans from banks at similarly low interest rates.

This is precisely the genius of SolarCity: they were able to use the low interest rates banks would charge them to install solar power on people's houses at a much lower cost of capital than the same banks would have charged the same homeowners without SolarCity's intermediation.

[thaumasiotes]

> This is precisely the genius of SolarCity: they were able to use the low interest rates banks would charge them to install solar power on people's houses at a much lower cost of capital than the same banks would have charged the same homeowners without SolarCity's intermediation.

That sounds like a pretty interesting pitch as a business model.

But if I recall correctly, SolarCity failed and had to be bailed out by, um, Tesla. Why? Was the free money just not enough?

[cogman10]

I'm going to push back a bit. Interest rates can be favorable to a company but not money market fund favorable. That would be a better interest rate than a US treasury note.

PG&E currently has 2.4% bonds out. Better than what you can get, but not lower than a mmf (usually less than a percent).

As a rule of thumb, rates won't sink lower than ten year tnote rates. Nobody will purchase a bond from a company that has a lower rate than a tnote.

[kragen]

Thank you for the concrete numbers and the correction/additional information!