SolarCity to allow retail investors to invest in its projects

LOS ANGELES Wed Jan 15, 2014 8:00am EST

LOS ANGELES Jan 15 (Reuters) - Top U.S. solar installer SolarCity Corp on Wednesday unveiled a plan that will allow investors of all types - including individuals - to invest in its rooftop solar systems.

The company, backed by Tesla Motors Inc founder Elon Musk, said it will launch a web-based platform later this year to offer debt investments backed by pools of its assets - mainly residential solar projects.

Most of SolarCity's residential projects are financed through contracts of about 20 years, giving the company steady and reliable income from homeowners with good credit and low-risk returns for its investors.

Since its beginnings in 2006, most of SolarCity's growth has been funded by investors such as Google Inc and U.S. Bancorp that put up funds for projects and in return are able to cash in on lucrative federal tax credits for solar systems.

SolarCity has grown to dominate a third of the U.S. residential solar installation market. The move announced on Wednesday is the latest example of SolarCity's, and the solar power industry's, efforts to expand access to capital to fund its rapid growth.

Late last year, for instance, San Mateo, California-based SolarCity became the first company to sell U.S. bonds backed by contracts for solar power systems. In addition, a startup called Mosaic Inc has pioneered solar crowd-funding by connecting retail investors to individual solar projects in need of financing.

A privately held financial technology company, Common Assets LLC, developed SolarCity's new platform and was acquired by the company last month for an undisclosed amount. Common Assets' chief executive, Tim Newell, has joined SolarCity as vice president of financial products.

According to SolarCity CEO Lyndon Rive, the company aims to create a financial product for retail investors and small organizations similar to those it offers to large institutions. SolarCity would not give details on the size of the planned offerings or how much money individuals would be required to put up but said it intends to offer products to those who only have a limited amount to invest.

"The individual investor is going to love this product," Rive said in an interview, adding that the company planned to raise billions of dollars through the new platform over a long period. The company is planning its first offering before the end of the first half of 2014.

A couple walks along the rough surf during sunset at Oahu's North Shore, December 26, 2013. REUTERS/Kevin Lamarque

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