In the News

The Next Solar IPO Will Be About Consumer Financing, Not Technology

Date: 07/30/2012

Company: RockPort Capital

Source: Pando Daily

If you follow the money that’s still flowing into solar, you’ll find innovative business models being valued above innovative technology. Now it’s up to a few companies to educate Wall Street that there is more to the category than a shiny panel collecting dust in a desert.

Last week Credit Suisse invested $400 million in Sunrun and SolarCity, which essentially refinance homeowner electricity bills, putting SolarCity in a better position to IPO in the third quarter of this year.

“The clear implication is that large, sophisticated institutions have decided that these are good risk-adjusted investments. In other words, SolarCity and Sunrun business models makes sense,” says Abe Yokell, partner at RockPort Capital Partners.

While there are three distinct parts to SolarCity’s business, its SolarLease and SolarPPA (power purchase agreement) have been the driving force of its growth. All eyes will be on the company and Goldman Sachs, hired to underwrite its initial public offering, to see if it can explain the often complicated math. It’s similar to GE Capital’s consumer finance model, which made previously expensive upfront investments affordable by breaking the purchase into monthly payments. In this case, the equipment is solar, the investment is in electricity, and the bet is against rising utility energy prices. Homeowners pay nothing to go solar and lower their monthly electricity bill.

Read full story at Pando Daily

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