Think of Ford agreeing to fund mass transit expansions and you’ll come close to understanding the nature of PG&E Corp.’s (parent of California utility Pacific Gas & Electric) agreement to finance SolarCity solar panels on homes and businesses.

Or perhaps you won’t. In any case, the recent announcement by PG&E Corp. subsidiary Pacific Venture Capital LLC – that it will provide $60 million in tax equity financing for design/build solar panel firm SolarCity – seems like either a timely and environmentally correct diversification or an attempt to gain a foothold in a market that is 360 from traditional fossil-fuel electricity generation.

Either way, the investment will facilitate the installation of about 1,000 solar photovoltaic panel systems on homes and businesses primarily in California, but also in Colorado and Arizona, where SolarCity also does business.

In fact, Foster City, California-based SolarCity’s business model (operated under its SolarLease™, PurePower™ and Commercial Power Purchase Agreement modules) has been so successful it now operates not only in the above-mentioned states but in Oregon as well.

Further geographical expansion will depend not only on state utility regulators approving the sort of solar arrangements the company has to offer, but also on financing. However, with this newest opportunity, expansion within states already served just got 100 percent easier.

According to SolarCity CEO Lyndon Rive, the participation by Pacific Venture Capital relieves constraints on growth imposed by the recession and a drying up of venture funds and bank confidence. PG&E Corp. Sr. Vice President Rand Rosenberg, for his part, sees it as the obvious path toward “a marketplace that may become increasingly important in the future."

Under the agreement, SolarCity will continue owning and operating the installations, with customers continuing to buy the electricity generated but not the panels. Pacific Venture Capital and parent PG&E Corp. will recover the investment via federal tax credits from the projects; that is, from the stimulus, or ARRA (the American Recovery and Reinvestment Act of 2009), which provides 30 percent of solar panel array costs as a tax credit to those firms and individuals with a “tax appetite”, or as an outright grant to those without.

Pacific Venture Capital will also get a portion of the revenue SolarCity receives from the solar arrays it installs, though neither company divulged how large that “cut” would be.

SolarCity, founded in 2006 to provide solar energy affordably to homeowners and businesses, plans to expand into five to 10 additional states in 2010, to fulfill its stated goal of becoming America’s leading clean energy provider. The VC funding can’t hurt.