Driving Solar Growth Through Financing: Solar City CEO Lyndon Rive (Part 4)

SM: Do you think Morgan Stanley will return to the solar industry?

LR: I absolutely think they will once they turn the corner. Until they show strong profits again, our primary partner will be Greystone.

SM: Are you working outside of California?

LR: We cover California, Arizona, and Oregon. We only cover commercial installations in Oregon. We do both commercial and residential in Arizona and California.

SM: What is the model? Do you do the installations as well?

LR: One thing our customers really like about us is having one company that does everything to go to. We do the design, installation, financing, support, and maintenance. There is no finger-pointing or excuses. That has sat well with our customers. Today we have an eight-month waiting list for our services. That is a long time. Even with eight months we are still doing three times more than we were at this time last year.

SM: What is unique about your product?

LR: The financing makes us unique, as does our ability to offer the full package from installation to maintenance.

SM: Your primary differentiator is your lease financing model, correct? You have to stand out on at least one dimension in a very crowded market.

LR: That is one of the primary differentiators. It is probably 60% of the differentiator. The other 40% is the technology services that we apply to the system. We monitor every system we deploy and monitor more systems in the country than any other company. We monitor thousands of systems. We also guarantee the energy production of the system. Not many companies today will do that.

SM: How big are you now in terms or revenue or some other quantifiable measure?

LR: We have grown from two employees to about 360 in the past two and a half years. We are the largest residential installer in the US today by a large margin. In our first year of operations we did $23 million. Since we have passed the mark of having to reveal our revenues in 2007 to justify that we are real, we have stopped releasing our revenues.

SM: Is this a company you funded yourselves, or do you have outside financing?

LR: There is outside financing; we have raised $56 million. Draper Fisher Jurvetson invested in Everdream when I was 22 and stayed through to the exit. They are one of our primary investors here. We have a 10-year relationship with them. Elon Musk is another strong investor. He was the co-founder of PayPal, is the chairman of our company, is the CEO of Tesla Motors and the CEO of SpaceX. He has a strong vision about combining electric vehicles and photovoltaic for a carbon-free lifestyle. He is very passionate about the environment and the things that we need to address. With SpaceX he is trying to launch rockets into space to eventually transport astronauts there. It is outrageous, but if there is a person on this planet who can pull it off, he can. He really is that good.

Our most recent investment is a strategic investment from First Solar. They have invested $25 million. First Solar is an incredible strategic partner. They have given us a product that nobody else has in this marketplace. The first biggest barrier is the upfront cost; the second is the stakes. First Solar’s product is atheistically the most beautiful product in the industry. It has no frame and is all black. It is gorgeous.