Why Solar is Quietly – and Quickly – Taking Over the Energy Industry

By Christy Karras

January 28, 2015

380579_10150751982180011_1672861617_n

While the world was busy worrying about the cost of oil and uncertainty in the Middle East, solar power quietly came into its own.

New technology and lower costs are making solar an increasingly dominant force, one whose momentum has accelerated in recent years.

From now through 2016, use of solar power is projected to increase faster than any other source of energy, both renewable and non-renewable, according to the U.S. Energy Information Administration.

In 2014, more than a third of all new electric capacity was solar, according to the Solar Energy Industries Association. At that rate, a new panel is installed approximately every three minutes; the one-millionth solar panel will likely be installed this year.

This is good news for the U.S. solar industry, which is expanding and adding jobs at a blistering pace.  It’s also good news for investors, who are taking advantage of new opportunities like SolarCity’s Solar Bonds to participate in that growth.

 

More technology, less cost

Why the solar boom? It’s not because solar is cleaner or more renewable than fossil-fuel energy sources - although it is. What’s driving the growth of solar today is sheer economics.  Solar is rising because it’s becoming cheaper for both energy companies and customers.

What once was a philosophical decision has become, for many, a financial one.

The cost to install solar has dropped significantly during the past few years, and it continues falling. The International Energy Agency estimates that solar could make up half of all energy sources by 2050.

In a recent report, Deutsche Bank estimated that the cost of solar panels will continue to fall by as much as 40 percent over the next four to five years. The more solar panels are installed, the more prices drop.

And the more cost drops, the more economical solar becomes compared to other energy sources.

“The reason solar-power generation will increasingly dominate: it’s a technology, not a fuel,” a recent Bloomberg article projected. “As such, efficiency increases and prices fall as time goes on.”

Despite a recent decrease in oil prices, Deutsche Bank predicts solar power will cost the same or less than conventional sources in 80 percent of the world’s markets by 2017. “Bottom line is that oil prices do not have a material impact on solar demand,” analyst Vishal Shah wrote in the bank’s analysis.

And while renewable energy sources have benefitted from government subsidies (as have fossil fuels), “recent analyses show that even without those subsidies, alternative energies can often compete with traditional sources,” the New York Times wrote.

 

At home with solar

Most of solar’s growth has come from residential installations, as more and more homeowners are taking advantage of solar’s lower costs to cut their energy bills. In the third quarter of 2014, residential solar installations increased by 58 percent over the year before, according to the Solar Energy Industries Association.

SolarCity, America’s largest solar installer, offers to install solar panels on homes with little to no upfront cost to homeowners. In return, customers sign up for long-term agreements with monthly payments at rates less than what their local utilities charge for electricity.

“We knew that if we wanted to bring solar to homes and businesses across the U.S., we needed to save customers money, not cost them money,” said Tim Newell, SolarCity’s vice president of financial products.

In addition, SolarCity recently began offering Solar Bonds directly to investors. The interest payments on the bonds come from SolarCity and the solar payments made by thousands of SolarCity’s customers around the country.

“Installing solar systems enables our customers to save money with solar.  Now, with Solar Bonds, we are allowing investors to earn money from solar as well,” Newell said.  “Starting with as little as $1,000, investors can earn up to 4% investing online through our website, with no investment fees.”

 

Solar everywhere

Businesses are also seeing the benefits of solar.

Some of America’s largest companies have started installing solar panels, not only because they want to go green but because it will save them money. Even professional sports are going solar, with the Indianapolis Motor Speedway, home of the Indy 500, recently installing 39,312 solar modules.

Military installations are seeing the benefits, too: one of SolarCity’s initiatives, the SolarStrong project, places solar panels on military bases in the U.S. Its most recent announcement: it’s placing solar on nearly 6,000 Navy and Marine Corps housing units across San Diego County, California.

“As the military continues its effort to move away from fossil fuels and towards renewable sources, solar will be a key part of the arsenal,” said U.S. Congressman Scott Peters, whose district includes San Diego.

Want to know more about Solar Bonds? Go to our website for complete information

 

SolarCity has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) for offerings to which information on this web site relates. Before you invest, you should read the prospectus in that registration statement and other documents SolarCity has filed with the SEC for more complete information about SolarCity and the offerings. You may obtain these documents for free by visiting EDGAR on the SEC web site at www.sec.gov. Alternatively, you may obtain the prospectus relating to the Solar Bonds, and the pricing supplement relating to a particular series of Solar Bonds, on the website.

Monopoly Money

By Jonathan Bass

January 23, 2015

MM-v2Consider this:  the government grants a private corporation a monopoly to provide an essential service—electricity—that everybody needs, and no one can do without. Unchecked by competition, this corporation is able to generate profits with a guaranteed rate of return from ratepayers who have historically had no meaningful choice. The corporation then takes a small portion of those profits—say, a million dollars or so—and donates it to some elected officials. Those same elected officials then act to head off genuine competition and perpetuate the monopoly. And the cycle repeats. 

Unfortunately, this is exactly what is happening today in parts of the electric utility industry.  In November and December, the Consumer Financial Protection Bureau and Federal Trade Commission received nearly identical letters expressing concern that companies in the solar industry might be using “misleading sales techniques” to attract customers. The lead signatory on each letter was an elected representative from Arizona, where the for-profit utility Arizona Public Service (APS) has waged a multi-year campaign against the distributed solar industry. Last Friday, the Arizona Center for Investigative Reporting revealed what everyone in the solar industry already knew about those letters—they came from APS. And by that I mean, an APS employee literally wrote the original draft of the letter to the FTC, as confirmed by the chief of staff for one of the lead signatories. What’s more, the twelve elected officials who signed the letters each received substantial donations from utility and fossil fuel interests during the last session of Congress. The lead signatory’s number one donor is none other than Pinnacle West, the parent company of APS.

These tactics are not surprising given what’s at stake. Electricity generation in the United States is a $372 billion market, and utility companies have enjoyed nearly 100% market share for most of a century. What’s changed is that in a growing number of states, it’s now cheaper for millions of homeowners to pay for solar electricity than to buy electricity from their utility. Hundreds of thousands are already choosing to do so, and many more will surely follow. This choice is not only better for our environment; it also drives enormous economic impact. Last year alone, the solar industry created one out of every 78 new jobs in America, and SolarCity created more than 4,000 of those jobs.

While some utilities are doing the right thing and using the advent of cheap solar power to update their business models, a handful of utilities are using every tool at their disposal to curb this growth, from predicting their own “death spiral” to scare regulators and the public to leveraging the relationships they have forged with regulators and elected officials to try to undermine competition. Fossil interests also appear to be funding allied media outlets to parrot their messages. It was no coincidence that one of the first articles that appeared on the Congressional letters was penned by Watchdog.org, a publication that is funded by the Koch Brothers.

As for the speculations about “misleading sales techniques,” even APS’s letter doesn’t actually identify any. The reality is that rooftop solar providers give customers a greater level of transparency into future pricing than any utility in America. Many utilities will not tell their customers what they are going to pay for electricity next year, while SolarCity tells customers exactly what they will pay for solar electricity, to the penny, every single month, for the next 20 years. We publish our contracts online for anyone to review, we insure our systems and guarantee their performance and we provide repair services. SolarCity has an A+ rating with the Better Business Bureau, the highest rating the agency provides, with complaints registered from less than one tenth of one percent (0.1%) of customers. Meanwhile, more than 38,000 of our customers have referred at least one other customer to SolarCity. To be clear, our business depends on positive word of mouth, and meeting customer expectations is the foundation of our growth. While no industry with hundreds of thousands of customers has a 100% satisfaction rate, rooftop solar would not be creating more than 1.5% of all new U.S. jobs if it were legitimately misleading customers. Americans want choice in just about everything these days—and they love saving money—and they’re asking for more of both from electricity providers. 

Corporate political donations are an intractable part of government, and they are not unique to any category of energy. However if the future of solar energy depends on which side can give more money to government officials, then the utilities will likely win because they have much larger coffers and a decades-long head start. Still, poll after poll has demonstrated the public’s overwhelming support for solar energy. Ultimately, we believe the future of solar in this country should be decided by the American consumer.

The largest subsidy that a government can convey upon an industry is monopoly protection from competition. Utilities are among the last monopolies left in America, and, not surprisingly, they do not intend to surrender that status quietly.  Some utilities will adjust and prosper in the new energy future, taking their cues from competitive forces and consumer preferences, and not regulatory statues written in the last century. Other utilities, like APS, may continue to use some of the profits generated by their monopoly status to suppress competition and support campaigns of politicians aimed at protecting the status quo. The latter approach does not serve the public interest, nor will it ultimately serve the utility industry as a whole. If a handful of bad actors are seen to be blocking customers’ paths to cleaner, more affordable energy, it could erode the public’s trust in utilities, and hurt even those that are open to finding a path forward that benefits everyone.  

We call this phenomenon “Monopoly Money”, and we will use this space to report on everything we see and hear about it. Stay tuned.

Employee Spotlight: Women Leaders at SolarCity

By Liz Mead

January 22, 2015

The National Solar Jobs Census was released last week, and the numbers are stellar: the U.S. solar industry employed about 174,000 Americans in 2014, and the number of solar jobs is expected to increase by 20.9 percent this year. Of the 31,000 jobs the solar industry added in 2014, SolarCity accounted for 4,000 of them. We decided we’d celebrate by launching a monthly blog series highlighting some of our awesome employees and the indispensable work they do for our company. With this month’s focus on women leaders at SolarCity, we’d like to introduce you to Emily!

Unknown_2-1

Emily Kofsky

Role at SolarCity: Director of Product Management

Hometown: Boston, Massachusetts

SolarCity Office: San Francisco HQ

Started working with us: 5 years ago

 

Why did you join SolarCity?

I knew I wanted to get into green technology, and knew my manager at the time would help me make the transition from consumer packaged goods to green tech. I’d read about this fledgling company, SolarCity, and was excited about what the cofounders were saying. I believed they would take this company somewhere.

 

What do you do in your current role?

I’m the director of product management for the software engineering teams. My primary function is to make sure our software teams are receiving the right requirements and direction to develop innovative software products. I’m responsible for getting our projects done right and on time. I also make sure that developments are broadly communicated to the users and stakeholders.

 

How have you grown at SolarCity?

I was brought to SolarCity to launch The Home Depot partnership – I had experience managing large partnerships from my previous job – and eventually I took on the marketing for more partnerships, like SolarCity’s new homes program. Later I moved into brand management – the biggest highlight of that was being given the opportunity to run the IPO. After that, there was a need to move the needle on referral programs - specifically on a new concept that would encourage referrals by people that were fans of SolarCity, but for whatever reason couldn’t become customers themselves – which is when we came up with framework for the Solar Ambassador program. Last winter, I was asked by Pete Rive to join software engineering and build a product management team. That was a huge and really exciting shift. It’s been awesome working with so many departments and platforms. We have an exciting software suite that our customers don’t necessarily get to see – a lot of behind-the-scenes products our teams built in-house so that we can design better solar systems, install more quickly and give customers a better experience.

 

What’s your favorite aspect of the job?

I love working with really bright engineers: being able to give them good data and direction, and having them come up with something way better than anything we’ve thought up before.

 

Can you describe the office culture in a few words?

Collaborative. Respectful. Open to change.

 

Solar is a male-dominated field. What would you tell other women about getting into this job/industry?

Regardless whether you’re male or female, I recommend first spending time to define your strengths and what kind of job you’re seeking.  When you start a conversation with someone without knowing those two things cold, it makes it harder for the other person to help you out.  Then make a list of the companies or organizations where you’d like to work.  Start showing that list to everyone: neighbors, friends, former coworkers, your hairstylist, whomever, and ask them if they know of anyone working at those places.  If they do, ask them if they’d be willing to make an introduction to their connection for an informational coffee or phone conversation.  You’re more likely to break in when someone at the hiring company is already rooting for you, and when you have a sense for the company goals and culture as a result of your informational chats.

 

Best piece of advice ever received?

Be open to the trajectory your project is going in, even if it’s a different direction than what you originally envisioned. That’s the whole point of collaboration, and adapting to changing markets.

 

Do you have any hidden talents? 

I inherited an amazing green thumb from my mother and grandmother.  The inside of my apartment contains a mini jungle. I’ve even brought supposedly dead plants back to life.

 

We’re hiring software engineers – find out more here. Interested in joining the team but not an engineer? Browse all current SolarCity opportunities on our career page.

The Rise of the Impact Investor

By Christy Karras

January 21, 2015

10923471_931028160243774_7977103192140907449_n-1

Impact investing has emerged as a major market trend as a growing number of investors are seeking more than just financial returns from their investments.  Whether it’s focusing on environmental sustainability or building jobs in their local communities, Americans are increasingly choosing to link their investments with social issues they care about.  

The idea of impact investing has been around for years, but it’s entering the mainstream as a growing number of investors see it not only as a statement of their values but also as a savvy money-making move.

These “triple bottom line” investors are looking for positive change in people and the planet as well as profit. And their ranks are growing fast.

“Sustainable, responsible and impact investing assets have grown 76 percent in just two years: from $3.74 trillion at the start of 2012 to $6.57 trillion at the start of 2014,” according to a November US SIF Foundation report.

“In the last 10 to 15 years, the number of social impact funds has grown from a handful to several hundred. Since 2012 alone, the number of funds globally has increased from at least 206 to 316,” a recent Knowledge@Wharton article noted.

The growth is being sparked by a new wave of online investment sites that bring more investment options to more people, and Millennials - who grew up in the digital age and want to merge their investments with their passions - are leading the charge. “Millennials are generally more interested than the Gen X, Baby Boomer, and WWII generations in learning how to apply their wealth to help others,” according to a High Net Worth Millennials report by the Spectrem Group.

 

New options 

Mutual funds that promise not to invest in certain areas - fossil fuels or tobacco, for example - remain a traditional venue for impact investing. But while many socially responsible investments have focused on avoiding the negative, some impact investors are focusing on putting money toward the causes they do want to support.

Individuals seeking even more control over where their money goes are looking for direct investments. Those include microfinance projects that let them lend money to small-business owners, or even to students to fund their college educations.

And some hands-on impact investors prefer to choose individual companies to support rather than leaving decisions in the hands of managers whose values might not match theirs (for example, a “socially responsible” fund might invest in an oilfield equipment manufacturer). 

SolarCity, the largest residential solar-panel installer in the United States, recently began offering Solar Bonds directly via its website. The interest payments on the bonds come from regular payments from thousands of customers who have had solar panels installed on their homes. The bonds are helping fuel SolarCity’s rapid growth even as they offer investors attractive returns (currently up to 4 percent interest).

Tim Newell, SolarCity’s vice president of financial products, says financial returns are as important as the feel-good factor.

“Investing in Solar Bonds supports our country’s transformation to clean energy.  But what investors like is that the bonds offer solid returns that are higher than many comparable fixed income investments,” Newell said. “It’s one thing to say to people, ‘you should support solar because it’s good for the environment,’ but it’s another to say that you invest in solar because it’s good for your portfolio.”  

In turn, impact investors are having a ripple effect on the economy. For example, since SolarCity is using the money from Solar Bonds to install solar panels on American houses, the money also goes toward hiring about 350 workers a week.

Investments in solar have also helped make it cheaper: researchers with Greentech Media estimate that by 2020, solar will be a better deal than regular electricity in more than half of the U.S.

 

What’s old is new

The idea of impact or values-based investing has been around for centuries. In the modern era, impact investing gained renewed attention alongside the political and ethical debates of the 1960s and 1970s, as investors started paying attention to the negative effects businesses could have on communities and the environment.

Ethical investing emerged as a major force during the 1980s, led by the highly visible campaign to disinvest in South Africa in order to fight apartheid. Pioneers like Calvert Investments, which first founded socially responsible funds in 1982, attracted investors who didn’t want their money going toward certain industries, products or business practices. 

By 2008, investors were banding together to create advisory groups such as the Rockefeller Foundation’s Impact Investing Initiative and the Global Impact Investing Network. Enabled by technology, organizations and measurement tools are springing up to support impact investors, addressing corporate governance and social and environmental performance as well as financial results.

In the early years, impact investments fought negative perceptions that they would never match up in terms of financial return. Today’s impact investors are discovering that responsible investing can be both sustainable and profitable.

The effects of impact investing go beyond certain industries, jobs and investors. They can affect what institutions and even governments think is valuable and worthwhile. An increasing number of universities, cities and other big investors have pledged to ditch fossil fuels from their investment holdings.

“This unlikely cohort represents the beginning of a tsunami that will change the face of climate advocacy, and which investors with significant exposure to fossil-fuel stocks ignore at their peril,” Ellen Dorsey, executive director of the Wallace Global Fund, argued in a recent Wall Street Journal report

Want to know more about Solar Bonds? Go to our website for complete information

 

SolarCity has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) for offerings to which information on this web site relates. Before you invest, you should read the prospectus in that registration statement and other documents SolarCity has filed with the SEC for more complete information about SolarCity and the offerings. You may obtain these documents for free by visiting EDGAR on the SEC web site at www.sec.gov. Alternatively, you may obtain the prospectus relating to the Solar Bonds, and the pricing supplement relating to a particular series of Solar Bonds, on the website.

For Homebuilders, Solar Increasingly a Matter of Course

By Molly Canales

January 16, 2015

SolarCity_Solar_Home_Community_2

SolarCity is heading to the International Builder’s Show in Las Vegas next week, and we’re really excited to connect with people on our new homes program.

There are hundreds of thousands of new homes built across the U.S. each year, and in 2011 we took on the huge opportunity to provide solar power through homebuilders. Today, we partner with more than 100 homebuilders to install solar on brand new homes for no upfront cost to the future homeowner, giving them the opportunity to save money on utility bills from the first day they move in.

We recently brought our homebuilder program to the East Coast, but many of our current partners are in the Las Vegas area, where homebuilders have historically been in the top percentage of ENERGY STAR certified homes constructed in the U.S. (nearly 100,000 ENERGY STAR certified homes built to date.) Continuing that tradition of sustainability, Las Vegas builders are again leading the nation – but this time with solar homes. SolarCity alone offers solar power options with more than ten builders in over 35 new home communities in Las Vegas including Pulte Homes, Ryland Homes, Shea homes and more.

Not only do these solar homes create local jobs and drive positive economic growth, they help the environment – a winning combination for local homeowners and businesses alike. 

We recently spoke with one of the leading homebuilders in the Las Vegas region, Harmony Homes, about their choice to equip all new home communities with clean solar power. Read on below!

IMG_2619Walking the Talk: Don Purdue, Harmony Homes Makes Solar Standard on New Communities and Goes Solar at Home

“Solar power is probably the single biggest change to homebuilding in the last 20 years. I can’t think of anything more innovative,” says Don Purdue, the Vice President of Purchasing at Harmony Homes. “We’ll look back in five years and wonder why we haven’t always used it.”

Purdue is responsible for many of the features included in thousands of Harmony’s homes across Southern Nevada. When an offer for solar power came across his desk from SolarCity, he got excited.

“Solar is an upgrade that requires no money down, can help make homeowners less dependent on fossil fuels and lower their utility bills – all in a green manner,” says Purdue. “It makes a whole lot of sense.”

After further research, Purdue decided to make solar power a standard feature in six new Harmony Homes communities for a total of nearly 500 homes. With solar power from SolarCity, homeowners can generate their own clean energy at a lower cost than the current utility price, and lock in low predictable rates to protect themselves from rising expenses. The solar panels are installed, monitored, insured and maintained by SolarCity, so Harmony Homes and their homeowners have the reassurance that in the rare case that issues arise, SolarCity handles everything.

After taking Harmony Homes’ communities solar, Purdue took it one step further and signed up himself.

His own solar system at his home in Las Vegas was recently installed, and we’re excited to see him next week!

Visit our booth, C8716, at the International Builders’ Show, and find out more about our solar program for homebuilders here

About This Blog

SolarCity's mission is to accelerate the mass adoption of clean energy. Follow solar’s progress here.

Subscribe to Email Updates

Social Profiles

32-twitter-1 32-facebook-1 32-googleplus-1 32-linkedin-1