SolarCity, a new Silicon Valley start-up wants to be the Swiss arms-dealer of the solar industry, and has just raised $10 million to do it.
It wants to provide solar installation for individuals and small companies — by acting as an honest, neutral broker, and giving them the best, most affordable technology available.
SolarCity, of Foster City, is the latest start-up backed by serial entrepreneur and former PayPal co-founder, Elon Musk. Musk, who recently led an investment in the all-electricity car Tesla Motors, also in Silicon Valley, has led a $10 million investment in SolarCity. Musk put in about $9 million, and the rest was provided by several other individuals, including his cousins Lyndon and Peter Rive, who are running the company. Lyndon is chief executive, Peter is chief operating officer.
Peter and Lyndon told VentureBeat that the idea is to build a nationally recognized, trusted brand that can leverage economies of scale. There is no such branded company, they said. They want to make installation as easy as taking out a lease on a car. If you take out financing to install your solar roof, for example, there’s a good chance your monthly payment may be less than your existing electricity bills, they said.
Recent legislation, they explained, makes it possible to feed any excess power you generate back into the main grid, which has further helped investing in a solar installation a financial decision, rather than purely environmental. During the day, when you are at work and your roof is generating electricity, you may sell electricity at peak rates for 30 cents per kilowatt hour, while at night, when you consume electricity, you may pay a cheaper ten cents per kilowatt hour, they explained.
SolarCity will focus on consumers and small and medium businesses, they said.
There are a few competitors, including locally, for example Akeena and Borrego. But neither of those are great names to market as solar brands. Borrego means “silly sheep” in Spanish, for example. “Akeena is one of the bigger players in the solar industry, but when put in perspective, they’re a relative small company,” added Lyndon. “There’s ample opportunity to establish a nationwide brand.”
VentureBeat talked with Akeena’s Barry Cinnamon several months ago, when he took his company public on the bulletin board, which Cinnamon said made sense for a small company his size — as way to get cash to expand. However, SolarCity’s Peter Rive expressed surprise at Akeena’s decision to give up the luxuries of being privately held so soon. Akeena raised $2 million, gave up 40 percent of the company in the process, and paid $500,000 in legal fees, according to published documents.
SolarCity is also engaging in research and development — to make things as simple as possible for building owners, with the goal of making installation as straight-forward as installing a satelite dish, the two executives said. They’ve hired engineers for that research. The team is now 16 strong, but numbers 30 when contractors are included.
Elon Musk is also chairman and chief executive of Space Exploration in southern California. Lyndon, too, is a serial entrepreneur, having built and sold a company in his native South Africa, and then founded a company called EverDream, with Musk’s backing.
The company is also looking to purchase companies to help it expand. It already has made two acquisitions, and plans more — the company is thus generating revenue. “A big part of the strategy is to do a national rollup,” said Lyndon.