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SolarCity
Company typePublic company
Nasdaq: SCTY
FoundedJuly 4, 2006; 18 years ago (2006-07-04)
FoundersLyndon Rive
Peter Rive
Headquarters
San Mateo, California
,
U.S.
Key people
Lyndon Rive, CEO
Peter Rive, CTO
Elon Musk, Chairman[1]
Number of employees
13,000
Websitewww.solarcity.com

SolarCity is an American provider of energy services, headquartered in San Mateo, California. Among its primary services, the company designs, finances and installs solar power systems. The company has over 13,000 employees.[2]

SolarCity has grown rapidly to meet the demand for installation of solar photovoltaic systems in the United States. The overall U.S. market has grown from 440 megawatts (MW) of solar panels installed in 2009 to 6,200 MW installed in 2014.[3][4] SolarCity has diversified in 2014 and 2015, with the aim of lowering costs and boosting sales. SolarCity purchased Paramount Solar for $120 million in 2013.

SolarCity is one of the founding members of The Alliance for Solar Choice, or TASC, which is a rooftop photovoltaic power station solar advocacy organization.[5]

History

Original SolarCity headquarters in Foster City, California
Installation vehicles with the original SolarCity logo
SolarCity vehicle with current SolarCity logo at night

SolarCity was founded in 2006 by brothers Peter and Lyndon Rive,[6] based on a suggestion for a solar company concept by their cousin, Elon Musk, who is the chairman and helped start the company. SolarCity has been the leading provider of residential solar power in California since 2007, its first full year of operation, according to the database kept by the California Solar Initiative[7] and was the number one residential solar installer in the U.S. in 2013, according to GTM Research.[8] In 2013, Solar Power World magazine listed SolarCity as the No. 2 overall solar installation company in the U.S.[9]

In October 2014, SolarCity announced it would be offering up to $200 million in solar bonds to launch a new online website to buy the debt, the first registered public offering of such bonds in the United States.[10] In March 2016 SpaceX bought $90 million of SolarCity stock.[11]

In June 2016, Musk's car company, Tesla Motors, formally submitted an offer to acquire SolarCity for $2.5-$3 billion.[12] According to Musk, the reason for this is "Creating a seamlessly integrated Tesla battery & solar power product that looks beautiful".[13] On August 1, 2016, SolarCity accepted Tesla Motor's offer of $2.6 billion.[14] Musk owns 22% of SolarCity stock.[15]

Locations

SolarCity is headquartered in San Mateo, California, but the company uses a distributed service model in which it provides installation from local operations centers. As of May 2016, SolarCity operates in 20 jurisdictions: Hawaii, the District of Columbia, and 18 other states on the West Coast, in the Southwest, and in the Northeast.[16]

Products, services and technologies

Solar leasing

In 2008, SolarCity entered the solar leasing market with a new solar lease option for homeowners.[17] SolarCity's solar lease can allow some homeowners, by adopting solar power, to pay less each month than they previously paid for electricity from the utility company.[18][19]

After a highly successful run during its initial years in Nevada, SolarCity withdrew from solar sales and installation in the state in late 2015, following the decision by the state's Public Utilities Commission (PUC) to raise the monthly service charge for rooftop solar customers and progressively reduce the return on solar energy sold back into the grid under the state's net metering rule.[20] Under the new rules, the monthly service charge imposed on Nevada Power's rooftop solar-generating customers rose from $12.75 to $17.90 and will continue to rise, reaching $38.51 by Jan. 1, 2020; simultaneously, the rates given to rooftop solar generating customers for their surplus solar energy were also clawed back and will continue to decline over the ensuing four years.[20] As a result, the company eliminated more than 550 jobs in Nevada.[20]

Commercial solar

In May 2008, the company completed what was, at the time, the largest commercial solar installation in San Jose on the North Campus of eBay. That July, SolarCity completed what was then the largest commercial solar installation in San Francisco, for British Motor Car Distributors, consisting of 1,606 solar photovoltaic panels.[21][22] SolarCity introduced new financing options for businesses in 2009[23] and has built multiple solar projects for other large organizations including Walmart,[24][25] Intel,[26] and the U.S. military.[27] On March 21, 2013 SolarCity announced that it would open a new location in Nevada in cooperation with state government.[28]

Electric vehicle chargers

See also: Charging station

SolarCity entered the electric car charging business by buying the SolSource Energy business of Clean Fuel Connections, Inc., which was reported to be finalized in 2009[29] and has also announced a partnership with Rabobank to make electric car charging available for free to owners of Tesla Motors' vehicles traveling on U.S. Route 101 in California between San Francisco and Los Angeles. Other cars that can make use of the same charging technology are welcome.[30] In 2011, the company announced it would install electric car chargers that could charge a wide range of EVs in all of its service territories.[31][32]

Energy efficiency evaluations and retrofits

In 2010, SolarCity acquired Building Solutions, a home energy audit firm, and began to offer energy efficiency evaluations and upgrades.[33] SolarCity worked with Admiral's Bank of Boston in March 2012 to make a new loan available to finance energy efficiency improvements[34] and expanded its energy efficiency services to the east coast.[35]

SolarStrong project

SolarStrong is SolarCity's five-year plan to build more than $1 billion in solar photovoltaic projects for privatized military housing communities across the United States, announced in late 2011.[36] SolarCity plans to work with the country's leading privatized military housing developers to install, own and operate rooftop solar installations and provide solar electricity at a lower cost than utility power. SolarStrong is ultimately expected to create up to 300 megawatts of solar generation capacity that could provide power to as many as 120,000 military housing units, which would make it the largest residential photovoltaic project in American history if completed. In November 2011, SolarCity and Bank of America Merrill Lynch announced that they have agreed to terms on initial debt financing for SolarStrong.[37]

Energy storage

Tesla Motors and Panasonic will open the Gigafactory, a battery factory in Nevada in 2017, and plan to make a battery storage device called Powerwall that stores solar power for use as a battery backup. The device will be sold to companies including SolarCity.[38][39] SolarCity is running a pilot project in 500 California houses, using 10-kilowatt-hour battery packs.[40][41]

Installation technology

SolarCity provides technologies for mounting solar panels on rooftops developed by Zep Solar, which it acquired in 2013.[42] Zep is best known for inventing a system that allows PV installers to "snap together" panels on the roof more quickly than other installation approaches to shorten installation time.[43] Zep Solar's technology eliminates the need for mounting rails on many roof types.[44]

Litigation and investigations

Solar City sued Salt River Project, an electric utility, for violation of the Sherman Antitrust Act on March 2, 2015,[45] case number 2:15-cv-00374, being heard before judge Douglas L Rayes.[46] This is in response to Salt River imposing a peak demand based charge on residential customers who also have solar panels.[47]

On April 29, 2016, U.S. Attorney Preet Bharara (of the Southern District of New York) is undertaking an investigation into state construction projects and contracts. The project known as Buffalo Billion is a part of that investigation. Many companies have been subpoenaed, and have provided information, including SolarCity and the office of New York Governor Andrew Cuomo. SolarCity is not the subject or focus of the investigation, and not involved in the vendor selection or contracting process.[48]

The Checks and Balances Project

SolarCity indirectly funds a political advocacy group known as the Checks and Balances Project. The project has criticized the elected members of the Arizona Corporation Commission (the regulatory body that oversees electricity and utilities in Arizona) for being too well-connected to utility companies. The Checks and Balances Project has filed several requests for public records from the Arizona Corporation Commission. In July 2016, the Federal Bureau of Investigation interviewed the head of Checks and Balances as part of a larger criminal investigation into the financing of certain Arizona statewide races in 2014.[49]

Project financing and the Google Fund

SolarCity partners with banks, large corporations, and the asset-backed[50] market to create project finance funds to finance its lease and PPA (Power Purchase Agreement) options. SolarCity's financing partners have included Bank of America, Merrill Lynch, Citi, Morgan Stanley, National Bank of Arizona and U.S. Bancorp, among others.[51][full citation needed] Among SolarCity's more well-known financing partnerships was a $280 million fund created with Google to finance residential solar installations in June 2011. The Google Fund was the largest fund of its kind in the U.S., and Google's largest investment in clean energy.[52]

Recently, securitization has been proposed and used to accelerate development of solar photovoltaic projects by providing access to capital.[53][54] SolarCity offered the first U.S. asset-backed security in the solar industry in 2013.[55]

Manufacturing

In June 2014, SolarCity announced plans to build a new manufacturing facility in Buffalo, New York, in coordination with the SUNY Polytechnic Institute after acquiring Silevo, a maker of high-efficiency solar modules. With a planned capacity of one gigawatt of solar panels annually, the new plant would be the largest solar plant in the U.S. and would compete head-to-head with Chinese manufacturers.[56] Groundbreaking for the project occurred in September 2014 with a target completion date of early 2016.[57] In February 2016, CEO Lyndon Rive announced due to trouble ordering machinery, full production would happen 3 to 6 months later than planned, in summer 2017.[58]

The facility is expected to be the largest of its kind in the Western Hemisphere.[59][60]

Buyout

On August 1, 2016, Tesla Motors announced in a joint statement with Solar City it would be acquiring the company in an all stock $2.6 billion dollar (USD) merger. The announcement cited operational and cost "synergies" would be realized with the merger. The action is still awaiting shareholder approval according to media reporting. [61]

See also

References

  1. ^ "Management Team at SolarCity". solarcity.com. Retrieved 2014-03-15.
  2. ^ "solarcity.com". Retrieved December 15, 2015.
  3. ^ "Solar Industry Data; Solar Industry Breaks 20 GW Barrier - Grows 34% Over 2013". SEAI Research & Resources. Solar Energy Industries Association. 2015. Retrieved 29 June 2015.
  4. ^ Sweet, Cassandra; Tracy, Ryan (2013-05-06). "Solar Installer Sues for U.S. Grant Funds". Wall Street Journal. Retrieved 2013-08-11.
  5. ^ "The Alliance for Solar Choice - About Us". TASC. Retrieved 2015-03-10.
  6. ^ Solarcity Time Magazine, April 17, 2008.
  7. ^ Newsmaker: Elon Musk on rockets, sports cars and solar power, news.cnet.com, Michael Kanellos, February 15, 2008.
  8. ^ Is the SolarCity Model the Only Way to Scale Residential Solar?, greentechmedia.com, Nicole Litvak, March 31, 2014.
  9. ^ "2013 Top 250 Solar Contractors". Solar Power World. Retrieved 19 April 2015.
  10. ^ SolarCity offers $200 million solar bonds in first public offering. Reuters, 16 October 2014
  11. ^ "SolarCity - Current Report". Retrieved 1 August 2016.
  12. ^ "Tesla Makes Offer to Acquire SolarCity". www.teslamotors.com. Retrieved 2016-06-22.
  13. ^ "Elon Musk on Twitter". Retrieved 1 August 2016.
  14. ^ Lienert, Paul. "SolarCity accepts Tesla's $2.6 billion offer; both shares fall". Reuters. Retrieved 1 August 2016.
  15. ^ Times, Los Angeles. "Tesla's stock falls after Elon Musk reveals his 'master plan'". Retrieved 1 August 2016.
  16. ^ "SolarCity locations". Retrieved 2016-05-30.
  17. ^ "Solar power for less than your cable bill | Environment Forum". Blogs.reuters.com. 2008-04-24. Retrieved 2011-10-15.
  18. ^ Earnest, John (2008-09-27). "Leasing a solar-power system". SignOnSanDiego.com. Retrieved 2011-10-15.
  19. ^ Sistek, Hanna (2008-07-18). "SolarCity provides SF power below grid price | Green Tech - CNET News". News.cnet.com. Retrieved 2011-10-15.
  20. ^ a b c Whaley, Sean (6 January 2016). "SolarCity cuts 550 Nevada jobs, blames new net metering rate". Las Vegas Review-Journal. Retrieved 30 May 2016.
  21. ^ "Solar Panel Installation, Commercial British Motors". SolarCity.
  22. ^ "Solar Powered Business Leader". San Francisco Department of the Environment.
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  28. ^ "SolarCity Corp : SolarCity to Expand to Nevada | 4-Traders". 4-traders.com. Retrieved 2014-03-15.
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  31. ^ VentureBeat. "Solar-leasing startup SolarCity sells subsidized electric car chargers."
  32. ^ CNET. "SolarCity to offer solar-powered EV chargers."
  33. ^ "Solar City Adds Energy Efficiency to Solar Finance, Design and Monitoring". Greentech Media. 2010-10-14. Retrieved 2011-10-15.
  34. ^ "SolarCity Charges Into Home Efficiency With Admirals Bank : Greentech Media". greentechmedia.com. Retrieved 2014-03-15.
  35. ^ "How SolarCity Makes Energy Efficiency Easy". Time. 2012-03-28.
  36. ^ Cardwell, Diane (2011-11-30). "SolarCity Wins Financing for Military Housing Plan". The New York Times.
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  38. ^ "Tesla charges into home battery market despite challenges". Associated Press. 1 May 2015.
  39. ^ "Tesla Energy is Elon Musk's battery system that can power homes, businesses and the world". The Verge. 1 May 2015.
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  44. ^ "Will Railed Solar Racking Systems Soon Be Obsolete in the Residential Sector?". Retrieved 1 August 2016.
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  46. ^ Goldberg, Keith (2015-03-03). "SolarCity Claims Ariz. Utility Squeezing Out Rooftop Solar". Law360.
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  48. ^ Harrington, Mark (2016-05-12). "Solar firm acknowledges subpoena in probe". Newsday. Retrieved 2016-05-16.
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  56. ^ Gold, Russel (17 June 2014). "SolarCity Buys Silevo, a Module Maker". Wall Street Journal. Retrieved 2014-06-19.
  57. ^ "SolarCity investing $5B in Buffalo, creating 3,000 jobs". 23 September 2014. Retrieved 2014-09-24.
  58. ^ "SolarCity delaying Buffalo factory production". 10 February 2016. Retrieved 2016-05-10.
  59. ^ "Despite Risks, Cuomo Bets on Solar Power to Lift Buffalo". 25 October 2015. Retrieved 2015-10-27.
  60. ^ "Governor Cuomo Celebrates "Topping Off" of SolarCity Gigafactory". August 4, 2015. Retrieved 2015-10-27.
  61. ^ "Tesla and SolarCity confirm merger in $2.6BN stock deal". August 1, 2016. Retrieved 2016-08-01.
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