(Acquisition by Tesla Motors pending)
|Traded as||NASDAQ: SCTY|
|Founded||July 4, 2006|
|Headquarters||San Mateo, California, U.S.|
|Lyndon Rive, CEO
Peter Rive, CTO
Elon Musk, Chairman
Number of employees
SolarCity Corporation 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.
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. 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.
- 1 History
- 2 Locations
- 3 Products, services and technologies
- 4 Litigation and investigations
- 5 The Checks and Balances Project
- 6 Project financing and the Google Fund
- 7 Manufacturing
- 8 Buyout
- 9 See also
- 10 References
- 11 External links
SolarCity was founded in 2006 by brothers Peter and Lyndon Rive, 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 and was the number one residential solar installer in the U.S. in 2013, according to GTM Research. In 2013, Solar Power World magazine listed SolarCity as the No. 2 overall solar installation company in the U.S.
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. In March 2016 SpaceX bought $90 million of SolarCity stock.
In June 2016, Musk's car company, Tesla Motors, formally submitted an offer to acquire SolarCity for $2.5–3 billion. According to Musk, the reason for this is "Creating a seamlessly integrated Tesla battery & solar power product that looks beautiful". On August 1, 2016, SolarCity accepted Tesla Motors' offer of 2.6 billion. Other steps to finalize the merger will not complete until later in 2016. As of August 2016[update], Musk owned 22% of SolarCity stock.
In August 2016, it was announced that SolarCity plans to take up $5 million in charges to cover its planned layoffs. The company is also cutting the salary of its two co-founders from $275,000 to $1 per year.
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.
Products, services and technologies
In 2008, SolarCity entered the solar leasing market with a new solar lease option for homeowners. 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.
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. 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. As a result, the company eliminated more than 550 jobs in Nevada.
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. SolarCity introduced new financing options for businesses in 2009 and has built multiple solar projects for other large organizations including Walmart, Intel, and the U.S. military. On March 21, 2013 SolarCity announced that it would open a new location in Nevada[clarification needed] in cooperation with state government.
Electric vehicle chargers
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 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. 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.
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. SolarCity worked with Admiral's Bank of Boston in March 2012 to make a new loan available to finance energy efficiency improvements and expanded its energy efficiency services to the east coast.
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. 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.
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. SolarCity is running a pilot project in 500 California houses, using 10-kilowatt-hour battery packs.
SolarCity provides technologies for mounting solar panels on rooftops developed by Zep Solar, which it acquired in 2013. 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. Zep Solar's technology eliminates the need for mounting rails on many roof types.
In the August 2016 earnings call, Elon Musk preannounced that Solar City would be introducing a new product where the photovoltaic electrical energy generating devices and system would make up an entire roof surface, rather than merely be the mounting of solar panels on an existing roof, as solar energy systems have generally been designed and installed during the early decades of terrestrial solar power. A more detailed announcement and product unveiling was promised for later in the year.
Litigation and investigations
SolarCity sued Salt River Project, an electric utility, for violation of the Sherman Antitrust Act on March 2, 2015, case number 2:15-cv-00374, being heard before judge Douglas L Rayes. This is in response to Salt River imposing a peak demand based charge on residential customers who also have solar panels.[needs update]
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.[needs update]
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.
Project financing and the Google Fund
SolarCity partners with banks, large corporations, and the asset-backed 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.[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.
Recently, securitization has been proposed and used to accelerate development of solar photovoltaic projects by providing access to capital. SolarCity offered the first U.S. asset-backed security in the solar industry in 2013.
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. Groundbreaking for the project occurred in September 2014 with a target completion date of early 2016. 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.
On August 1, 2016, Tesla Motors announced in a joint statement with SolarCity it would be acquiring the company in an all-stock $2.6 billion dollar merger. The announcement cited operational and cost "synergies" would be realized with the merger. The action is approved by antitrust regulators, and still awaiting shareholder approval according to media reporting.
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