SolarCity raises $81M to expand rooftop solar empire

SolarCity installation

Solar installer SolarCity has raised $81 million to expand its rapidly growing solar rooftop empire. The round is a whopper for the solar installation business, which usually sees much smaller rounds.

The equity deal is one of the first for Silver Lake Kraftwerk, a cleantech fund announced a year ago and was planning on building a fund with investment from George Soros. The fund has raised $206 million out of a $1.25 billion target, according to its government filing last December.

Overall, SolarCity has raised just over $200 million in venture capital, said company spokesman Jonathan Bass. SolarCity said it will use the new funding for expanding sales, technology development and even acquisitions.

SolarCity, based in San Mateo, Calif., installs rooftop solar panels for homes, businesses and other organizations. The company made a name for offering leases – or power purchase agreements – that take away the need for customers to pay the expensive upfront costs of installing and owning the equipment. Consumers pay a monthly fee and are promised to see lower utility bills as a result of going solar. This model has grown in popularity since SolarCity’s start in 2006. It also creates an investment opportunity for banks and others to finance installations.

SolarCity has lined up funds to install its solar panels from the likes of Bank of America, U.S. Bancorp and Google to finance solar installations and the leases. The installer also has become more ambitious in the size of projects it undertakes: one of the most recent agreements involved getting $350 million from Bank of America to install about 300 MW on military housing over a 5-year period.

Founded in 2006, the company started off in California and now serves mostly the West and East Coasts. It has expanded its services lately. It now also installs electric car charging stations and offers energy efficiency audits for homes.

SolarCity is reportedly getting ready to file for an initial public offering. It also is embroiled in a lawsuit filed by SunPower earlier this month. SunPower is alleging that five of its former employees who left to work for SolarCity downloaded confidential data, including pricing forecasts, contracts and market analyses, from their SunPower computers.

There seems to be a trend of cleantech startups raising a significant round before they are set to debut on the public market. Solar electronics developer Enphase Energy, which is waiting to go public, raised $21.86 million. Smith Electric Vehicles began to raise $40 million after filing for an IPO last November, and it recently secured a letter of intent for both a $25 million investment and a joint venture deal from Chinese automaker Wanxiang Group

Aside from Silver Lake, other investors in the round for SolarCity include Valor Equity Partners, Shea Ventures (an affiliate of Shea Homes) and individuals such as SolarCity chairman and Tesla Motors’ CEO Elon Musk and Nicholas J. Pritzker, a partner at Tao Ventures and an advisor to Hyatt Hotels.

Photo courtesy of SolarCity

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