SolarCity announced that it plans to public, ending months of speculation over whether the San Mateo, Calif.-based rooftop installer was going to take a leap and file an IPO.
Bloomberg first reported back in February SolarCity's intention to file for an IPO that could value the company at more than $1.5 billion. SolarCity, whose chairman is Elon Musk of electric vehicle startup Tesla Motors, officially announced its IPO plans Monday.
The timing of the IPO is worth noting. While SolarCity was preparing to file with the U.S. Securities and Exchange Commission, other greentech companies were ditching their IPO plans. Solar-thermal power developer BrightSource Energy withdrew its IPO last month citing poor market conditions. Cellulosic ethanol producer Enerkem and Luca Technologies also pulled their IPOs at the last minute.
The withdrawal of a few greentech IPOs doesn't necessarily spell demise for SolarCity. If anything, the rooftop installer is poised to do well. Solar panel manufacturers have struggled as a global oversupply of panels and weak demand have pushed prices below the cost of making the product. Installers such as SolarCity have turned the drop in prices to their advantage, using the cheaper products to drive consumer demand and install more panels on residential and commercial rooftops.
SolarCity's power purchase agreement service, which allows customers to lease the panels and avoid upfront costs, also has helped grow its business and gain support form investors. SolarCity has managed to raise $81 million from investors in a round co-led by Silver Lake Kraftwerk and Valor Equity Partners. It's also created a $280 million financing fund backed by Google to help fund its solar installations. US Bancorp announced in March it was forming a renewable energy tax equity fund as part of an ambitious five-year initiative with SolarCity to bring solar power to privatized military housing.
Unfortunately, we haven't been able to look at SolarCity's profits, sales figures and risk factors -- all of the details contained in an S-1, the document filed with the SEC by companies intending to go public. As Chris O'Brien with the San Jose Mercury News reported Monday, the JOBS Act passed by Congress allows companies that have less than $1 billion in revenue to file non-public drafts with the SEC. The SEC reviews and advises on the filing and once it's fixed up, we'll all get a look under the hood.