SolarCity

SolarCity Corporation was an American solar-energy company that designed, sold, financed, installed, and maintained photovoltaic systems for residential, commercial, industrial, and institutional customers. Founded in 2006 by South African brothers Peter Rive and Lyndon Rive, the company was developed around an idea associated with their cousin Elon Musk, who became chairman and was an important early backer. SolarCity helped turn rooftop solar from a product purchased outright into a long-term energy service. Its best-known arrangement allowed homeowners to install systems without paying the full equipment cost at the outset. Customers could lease the system or agree to purchase the electricity it generated over a contract commonly extending for 20 years. This model reduced the initial financial barrier to rooftop solar and contributed to the rapid expansion of residential installations in the United States, although it also created substantial long-term financing needs and debt for the company. SolarCity expanded through organic growth and acquisitions. It entered the East Coast market in 2011 after acquiring solar operations associated with Clean Currents and groSolar. It later acquired Building Solutions to add home-energy audits and efficiency upgrades, bought the SolSource Energy business to enter electric-vehicle charging, purchased Paramount Solar in 2013, and acquired Zep Solar for its rail-free rooftop mounting technology. The company also served commercial and institutional customers, completing large installations for organizations including eBay, British Motor Car Distributors, Walmart, Intel, and the United States military. Its SolarStrong program sought to deploy more than $1 billion of photovoltaic projects at privatized military-housing communities. SolarCity became one of the largest residential solar installers in the country and was described as the leading U.S. residential installer in 2013. By 2015, systems installed by the company had a stated generating capacity of approximately 870 megawatts and represented a significant share of non-utility solar installations. The business depended on access to capital because SolarCity often retained ownership of leased systems and collected payments over many years. It raised financing through tax-equity arrangements, project finance, solar bonds, and other capital-market instruments. The same model that supported customer growth also left the company with more than $1.5 billion in debt by the time of its Tesla acquisition, according to the company's reported position described in reference material. The company also pursued manufacturing and energy-storage initiatives. After acquiring high-efficiency solar-module maker Silevo, SolarCity planned a major manufacturing facility in Buffalo, New York, with support from New York State and the SUNY Polytechnic Institute. The site later became associated with Tesla's solar and energy businesses. In 2016, SolarCity piloted distributed backup power using Tesla Powerwall batteries and GridLogic software in California homes. Its relationship with Tesla included co-marketing, free charging arrangements for Tesla Roadster owners at selected charging locations, and early installation of Powerwall systems. SolarCity's financial position, the overlap between its directors and Tesla, and the strategic rationale for combining solar generation with electric vehicles and batteries led Tesla to propose an acquisition in 2016. Tesla announced an all-stock transaction valued at approximately $2.6 billion. Shareholders approved the transaction in November, and it closed on November 21, 2016. SolarCity ceased to operate as an independent public company and its activities were reorganized within Tesla's energy business, later known as Tesla Energy. The Rive brothers subsequently left the combined organization. The SolarCity name therefore survives mainly as a historical brand and as the predecessor of Tesla's solar-generation operation…

SolarCity was established on July 4, 2006, by brothers Peter and Lyndon Rive. The concept was associated with Elon Musk, their cousin, who became chairman and helped provide early support. The founders built the company around a service and financing model intended to make rooftop solar accessible to households that could not or did not want to purchase an entire photovoltaic system upfront. In 2008, SolarCity began offering residential solar leases. Under the model, the company generally financed and retained ownership of the equipment while the customer made long-term payments tied to the system or its electricity production. This approach became one of the most influential residential-solar business models in the United States. It accelerated installations, but SolarCity had to finance large fleets of systems whose customer payments would arrive over many years. The company expanded its technical and geographic capabilities during the following decade. By 2009, its installed panels were reported to have a generating capacity of 440 megawatts. In 2010, SolarCity acquired Building Solutions and added energy-efficiency assessments and retrofit work. In 2011, it entered the East Coast through acquisitions connected with Clean Currents and groSolar, then opened operations in a number of eastern and southeastern states. It also announced SolarStrong, a multiyear program intended to develop photovoltaic projects for privatized military housing communities. SolarCity added electric-vehicle charging in 2009 through the acquisition of the SolSource Energy business. In 2011, it worked with Rabobank on charging access for Tesla Roadster owners along a California travel corridor, although Tesla later developed its own Supercharger network. SolarCity's commercial work included large installations for eBay and British Motor Car Distributors, followed by projects for organizations such as Walmart, Intel, and the U.S. military. In 2013, it acquired Paramount Solar and purchased Zep Solar, obtaining a rail-free mounting system intended to speed installation and improve rooftop appearance. The company also established GivePower in 2013 as a nonprofit initiative; GivePower later operated independently. SolarCity's growth made it one of the leading U.S. residential installers. In 2014, it announced a Buffalo, New York, manufacturing project after acquiring Silevo, a maker of high-efficiency solar modules. The facility was supported by New York State and was planned as a major source of domestic solar-panel production. Construction progressed during 2014–2016, while equipment delays pushed back the expected production start. The site subsequently became part of Tesla's solar manufacturing and product strategy. Regulatory and financial pressures increased in the middle of the decade. Nevada's changes to rooftop-solar net-metering economics led SolarCity to withdraw from new sales and installations in the state in 2015, with substantial job losses. The company also issued solar bonds and used other capital-market financing, but the long duration of its lease portfolio required continual access to funding. In 2016, SolarCity announced a workforce reduction affecting about one-fifth of employees and reduced the co-founders' salaries to one dollar. Tesla announced its proposed acquisition of SolarCity on August 1, 2016. The transaction was framed as a combination of solar generation, energy storage, electric vehicles, and charging infrastructure. Critics questioned the financial condition of the companies and the relationship between Tesla and SolarCity leadership, while Tesla argued that the acquisition supported its sustainable-energy strategy. Shareholders approved the deal in November, and it closed on November 21, 2016, at an announced value of approximately $2.6 billion in Tesla stock. SolarCity was then reorganized within Tesla and no longer operated as an independent public company. The Rive brothers and other SolarCity executives departed during the transition. Tesla continued developing solar generation, storage, and manufacturing activities, including Powerwall-related installations and products associated with the Buffalo facility. SolarCity's independent corporate identity therefore ended with the acquisition, but its leasing model, installation workforce, project portfolio, and technology contributed to the foundation of Tesla's later energy business.

1. 2017Rive brothers leave the company

   Lyndon Rive and Peter Rive depart after SolarCity's integration into Tesla.

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2. 2016Tesla acquisition closes

   Tesla completes its approximately $2.6 billion all-stock acquisition of SolarCity on November 21.

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3. 2015Nevada operations withdrawn

   The company exits new Nevada solar sales and installation after changes to rooftop-solar compensation and customer charges.

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4. 2014Buffalo manufacturing project announced

   Following the Silevo acquisition, SolarCity announces plans for a large solar-module facility in Buffalo, New York.

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5. 2013Paramount Solar and Zep Solar acquisitions

   SolarCity acquires Paramount Solar and Zep Solar, adding sales capacity and rail-free mounting technology.

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6. 2011East Coast expansion and SolarStrong

   The company expands through acquisitions and announces a large military-housing solar-development program.

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7. 2008Residential solar leasing launches

   SolarCity introduces a no-upfront-cost leasing model for residential rooftop solar.

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8. 2006SolarCity is founded

   Peter and Lyndon Rive establish SolarCity in the United States, with Elon Musk associated with the original concept and serving as chairman.

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A mass-market residential solar provider built around financing, long-term energy contracts, and turnkey installation rather than outright equipment sales.

• Residential solar leasesResidential solar financing2008

  SolarCity's signature offering allowed homeowners to obtain rooftop photovoltaic systems without bearing the full upfront equipment cost. The company financed, installed, and maintained the system while customers made long-term payments for the equipment or the electricity it produced. The structure lowered the entry barrier for households but exposed SolarCity to significant financing and balance-sheet requirements.

• Commercial solar installationsCommercial solar2008

  SolarCity designed and installed photovoltaic systems for businesses, institutions, military housing, and other large organizations. Projects included installations associated with eBay, British Motor Car Distributors, Walmart, Intel, and the U.S. military. The company offered project financing and other payment structures in addition to direct installation services.

• Zep Solar mounting systemSolar installation hardware2013

  Acquired in 2013, Zep Solar's mounting approach used components designed to connect without conventional rooftop rails. SolarCity promoted the system as a way to shorten installation time and provide a cleaner visual finish. The technology was subsequently used in Tesla's solar-installation activities.

• SolarStrongSolar project development2011

  SolarStrong was a planned multiyear program to develop more than $1 billion in photovoltaic projects for privatized military-housing communities. SolarCity worked with Lendlease and financing partners across bases in numerous states. Early projects included installations associated with Joint Base Pearl Harbor–Hickam, Davis–Monthan Air Force Base, Los Angeles Air Force Base, Peterson Air Force Base, and Schriever Air Force Base.

• GridLogic and Powerwall pilotEnergy storage2016

  In 2016, SolarCity tested a distributed backup-power concept using GridLogic software and 10-kilowatt-hour Tesla Powerwall battery packs in approximately 500 California homes. The company also tested the concept in Vermont. The pilot anticipated the later integration of solar generation, batteries, and energy-management software.

• Energy-efficiency evaluations and retrofitsEnergy efficiency2010

  After acquiring Building Solutions in 2010, SolarCity offered home energy audits and efficiency improvements alongside solar installation. The company later expanded these services geographically and worked with financing partners to support loans for efficiency upgrades.

• 2013GivePower

  International

  SolarCity established GivePower as a nonprofit initiative connected with its solar business.

  Outcome. GivePower subsequently operated as an independent enterprise.

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• 2011SolarStrong

  United States

  A development initiative aimed at installing solar systems for privatized military-housing communities across the United States, in cooperation with Lendlease and financing partners.

  Outcome. Projects were developed at multiple military bases, but the program's planned scale and financing structure evolved during implementation.

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• 2011Tesla Roadster charging partnership

  California, United States

  SolarCity worked with Rabobank to provide free charging access for Tesla Roadster owners traveling between San Francisco and Los Angeles.

  Outcome. Tesla later pursued its own Supercharger deployment independently.

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• 2016Reduce workforce to preserve cashStrategy

  SolarCity's rapidly expanded workforce and capital-intensive leasing model created pressure to conserve cash.

  What changed. The company cut approximately 20 percent of its workforce and reduced the co-founders' annual salaries to one dollar.

  Aftermath. SolarCity was subsequently acquired by Tesla and ceased to operate as an independent company.

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• 2016Accept Tesla acquisitionM&A

  Tesla sought to combine solar generation, energy storage, electric vehicles, and charging infrastructure under a broader sustainable-energy strategy.

  What changed. SolarCity shareholders approved Tesla's all-stock acquisition, which closed on November 21, 2016.

  Aftermath. SolarCity was reorganized into Tesla's energy business, later known as Tesla Energy.

  Transaction value. (2016)

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• 2015Withdraw from Nevada sales and installationStrategy

  Nevada regulators changed rooftop-solar charges and reduced the economic value of electricity exported to the grid.

  What changed. SolarCity halted new solar sales and installations in Nevada and eliminated more than 550 positions.

  Aftermath. The decision illustrated the dependence of distributed-solar economics on state net-metering policy.

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• 2008Adopt long-term residential solar leasingProduct launch

  High upfront equipment costs limited household adoption of rooftop solar.

  What changed. SolarCity introduced leases and related long-term electricity-payment arrangements that reduced or eliminated customers' initial capital requirement.

  Aftermath. The model helped accelerate installations and became highly influential in U.S. residential solar, while requiring SolarCity to raise substantial long-term financing.

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• 2016Shareholder challenge to Tesla's SolarCity acquisitionControversy

  Shareholders challenged Tesla's acquisition of SolarCity, raising questions about conflicts of interest, the relationship between Elon Musk and SolarCity, and whether Tesla paid an excessive price. In 2022, the Delaware Court of Chancery ruled for Musk, finding that the board had meaningfully evaluated the deal and that the evidence supported a fair price.

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• 2022Delaware court rejects shareholder claims over the SolarCity acquisition

  The Delaware Court of Chancery ruled for Elon Musk in a shareholder case concerning Tesla's acquisition, finding that the Tesla board had meaningfully considered the transaction and that the price was fair on the evidence presented.

  Lawsuit
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• 2016SolarCity announces workforce reduction

  The company announced cuts affecting approximately 20 percent of its workforce as it sought to preserve cash; the two co-founders' salaries were also reduced to one dollar annually.

  Other
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• 2016Tesla announces proposed acquisition of SolarCity

  Tesla proposed an all-stock acquisition valued at approximately $2.6 billion, combining solar generation with electric vehicles, batteries, and related energy products.

  M&A
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• 2016Shareholders approve Tesla's acquisition of SolarCity

  More than 85 percent of unaffiliated shareholders reportedly voted in favor of the transaction, which closed on November 21, 2016.

  M&A
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• 2015SolarCity withdraws from Nevada after net-metering changes

  After Nevada regulators increased charges for rooftop-solar customers and reduced compensation for exported electricity, SolarCity stopped new sales and installations in the state and eliminated more than 550 jobs there.

  RegulationLeadership change
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• 2011SolarCity expands to the U.S. East Coast

  Acquisitions connected to Clean Currents and groSolar supported expansion into several eastern states.

  M&A
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• 2008SolarCity enters the residential solar-leasing market

  The company introduced a residential lease structure designed to eliminate or reduce customers' upfront equipment costs in exchange for long-term payments for generated electricity.

  Product launchPricing
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1. SolarCity
2. Tesla announces acquisition of SolarCity