SolarCity Hires CFO With IPO Experience, May Be Planning Public Offering
SolarCity Corp., a closely held developer of rooftop solar power systems backed by Google Inc. (GOOG) and Citigroup Inc., hired Robert Kelly as its chief financial officer, citing his experience at raising funds.
Hiring someone with that background may indicate that SolarCity is considering its own IPO, said Brian Yerger, chief executive officer and co-founder of the renewable energy consulting company Aerca Advisors.
“The pieces are beginning to come into place that would potentially proceed” to an IPO, he said today in an interview. “When you’re expanding on a national footprint, you need cash.”
SolarCity offers solar leases for residential and consumer clients in 11 states and Washington, D.C., and has said it plans to expand into additional markets. It builds rooftop power systems that it owns, often at no initial cost to customers, and receives monthly payments for the gear and the electricity it generates.
That model is growing in popularity and SolarCity likely needs to raise capital to purchase more panels, said Theodore O’Neill, an analyst at Wunderlich Securities, though this isn’t a good time for the company to consider an IPO. Solar stocks have been battered this year and the Bloomberg Global Leaders Solar Index has plunged 49 percent.
“You will get compared to a whole bunch of beat up stocks and you won’t get a particularly attractive valuation,” he said in an interview today. “There’s no point in going public.”
“Bob Kelly has raised more than $48 billion to finance energy projects,” Lyndon Rive, SolarCity’s chief executive officer, said in the statement. Kelley “will be responsible for further expanding SolarCity’s finance organization to support the company’s continuing growth.”
Jonathan Bass, a company spokesman, said Rive wasn’t immediately available for interviews.
Google, the world’s biggest search engine company, invested $280 million in June in a fund that finances the costs of SolarCity’s projects. Citigroup and U.S. Bancorp have invested in similar funds.
SolarCity didn’t receive a $275 million U.S. Energy Department loan guarantee that was conditionally approved last month. The company said Sept. 23 that it wouldn’t receive the financing because the agency couldn’t complete the paperwork before the program’s deadline at the end of last month.
The Energy Department’s loan guarantees have been criticized by lawmakers in Washington after another recipient, Solyndra LLC, filed for bankruptcy Sept. 6.
Kelly spent 14 years at Calpine, eventually becoming its CFO. He left in November 2005, less than a month before the Houston-based company filed for bankruptcy.
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