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Altus Power America Inc., a solar-energy investment firm, said it raised $205 million from Goldman Sachs Group Inc. and others to fund solar-panel installations at companies and municipalities.

Altus, based in Greenwich, Conn., builds, installs and owns commercial solar systems. It also operates as a utility in pockets of the country.

The new investment appears somewhat contrarian, coming amid a wave of skepticism toward solar companies due to worries about their long-term growth trajectories. Shares of SolarCity Corp., Vivint Solar Inc. and Sunrun Inc. have declined sharply this year, while SunEdison Inc. filed for bankruptcy protection.

Altus was formed in 2009 by two former Wall Street bankers with experience in complex structured products and a third founder with a background in construction. The company started with capital from its founders' friends and family members. It then raised $30 million in 2013 from Catlin Group, a Bermuda insurer, and in 2014 obtained $125 million from FS Investments, a Philadelphia investment firm that was sub-advised by a unit of Blackstone Group LP.

FS Investments is also an investor in the latest capital round, with other funds coming from a Goldman division known as the Alternative Energy Investing Group, as well as Global Atlantic Financial Group, a life insurer that was spun out of Goldman in 2013. The investors hold hybrid securities and own minority stakes in Altus. They were drawn by the rich yields promised by Altus's projects at a time of very low interest rates.

The money will pay for new commercial solar projects that are expected to yield between 10% and 15% annually, Tom Athan, an Altus co-founder and managing partner, said in an interview.

Cities and businesses have signed long-term contracts to buy power from Altus at a discount to regular electricity rates. Altus has installed around 40 solar systems at locations including the headquarters of sports channel ESPN, the rooftops of some Bed, Bath and Beyond stores, some public schools in the Northeast and open land in Warren, Mass. It pays for the solar panels and their installation, and makes money over the long run from the utility payments that customers make. Altus also receives a 30% federal tax credit for owning the systems.

The main risk for Altus, officials at the firm say, is the length of the contracts it has entered into, most of which span 20 to 25 years—during which its customers' finances could falter. Gregg Felton, an Altus partner, said the company is working mostly with organizations with "high credit quality" or stable revenues. If customers sell or vacate their buildings, Altus can sell its solar power to the grid until new tenants move in, he added.

Write to Serena Ng at serena.ng@wsj.com

(END) Dow Jones Newswires

October 04, 2016 09:45 ET (13:45 GMT)

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