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USA: SolarCity Prepares for IPO

SolarCity, the leading solar installer in the US, is planning to go public in the third quarter this year, reports Reuters.

If successful, the launch on the public markets could value the company at $1.5 billion.

Based in San Mateo, California, SolarCity has grown rapidly since it was founded just 6 years ago. In the first quarter of 2011, the company’s share of the US installation market was 14%, according to GTM Research.

While manufacturers suffered last year because of unprecedented low prices for solar panels, installers benefited. They could buy panels at historically low prices and sell systems at lower prices to end users.

SolarCity and other installers that use a solar leasing business model have benefited the most. SolarCity owns and installs systems on residential rooftops and homeowners pay a simple monthly electric bill.

The solar leasing model has become increasingly popular as it gives homeowners an easy way to benefit from solar without paying the large upfront costs of installing and owning the system. They sign long term agreements with SolarCity which gives them a guaranteed price for electricity that’s the same or less than that of their utility bill – that protects them from rising utility rates.
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