| LOS ANGELES
LOS ANGELES Dec 14 SolarCity Corp's
successful market debut could warm up the chilly environment for
stocks of alternative energy companies.
The solar installer had a difficult journey to becoming a
public company this week, but the deal is viewed as a success in
the beleaguered clean energy technology industry and good news
for start-ups hoping to ride its coattails to public offerings
Venture capitalists have poured billions of dollars into
solar, smart grid and other energy technology companies over the
last few years, with little to show for it. The industry has had
only a few IPOs, many of which fared poorly in the weeks and
months after their debuts due to a weak global economy,
slower-than-expected adoption of new technologies and stiff
competition in the solar industry.
Solar panel manufacturers dominate the list of publicly
traded clean-tech firms, and the MAC Global Solar Energy index
has lost 95 percent of its value since 2008.
SolarCity is an installer, not a panel manufacturer.
Nevertheless, skittishness about the dismal performance of solar
stocks forced the company to cut the price of its initial public
offering to $8 a share from a previously planned range of $13 to
$15 a share.
The company went ahead with its plans at the lower
valuation, and several investors, instead of selling, made plans
to buy shares in the offering, and the stock climbed nearly 50
percent on its first day of trading.
"People are going to point to the 30-plus percent discount
as almost a disaster, but in this type of an environment,
especially with solar, getting it out the door and being able to
let them prove their business model is good for the industry,"
said Robert W. Baird analyst Ben Kallo. He added that companies
with business models similar to SolarCity's will probably keep
an eye on the stock's performance for the next quarter or two as
they weigh their own IPO plans.
SunRun, a SolarCity competitor, has no near-term plans to go
public, co-Chief Executive Lynn Jurich said in an interview.
Jurich, said, however, that SolarCity's IPO would help educate
investors about parts of the industry that are thriving.
"One of the big barriers for us in growth is continuing to
raise enough capital," Jurich said. "So the validation that it
gets into the Wall Street community is going to be beneficial."
Several startups with their own public market aspirations
have been watching SolarCity's experience this week.
Opower, a company that helps utility customers cut their
energy bills, is likely to go public next year, a source
familiar with the situation said. Opower CEO Dan Yates said the
company was talking about a potential IPO, but had not yet
identified a timetable.
Silver Spring Networks, a smartgrid company that has delayed
an IPO for more than a year, will resurrect its IPO early next
year, the source said. A company spokesman would not comment.
Bloom Energy, a company that creates fuel-cell boxes that
can power big data centers and the like, will likely attempt an
IPO in late 2013 or early 2014, according to Scott Sandell, a
general partner with Bloom investor New Enterprise Associates.
But SolarCity CEO Lyndon Rive said companies looking to
launch IPOs should be prepared to show strong business models --
and take lower valuations than they might hope for.
"If the fundamentals are there, they might not get the
numbers they want but it will be a success," Rive said in an
interview following SolarCity's IPO. "Investors' appetite for
risk in the clean-tech sector is extremely small."
Electric car company Tesla Motors Inc, which like
SolarCity is backed by technology entrepreneur and Paypal
founder Elon Musk, is widely considered the industry's lone
public markets success story. Its stock has doubled since going
public in June of 2010.
It's too soon to tell whether SolarCity will be judged a
success, like Tesla, but industry players are optimistic that
the company's market debut will help alleviate the fog that has
hung over clean-tech, generally, and solar, in particular.
"Any positive news, such as a successful IPO, is going to
help educate investors," said Paul Nahi, chief executive of
Enphase Energy Inc, which makes microinverters for
solar energy systems and whose stock is down 45 percent since
its March IPO. "Hopefully it will give them a reason to take a
look at solar in a new light and see that there can be some big