SolarCity: Transforming the Way Energy is Delivered

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Nov. 19 (Bloomberg) – SolarCity Co-Founder and CEO Lyndon Rive discusses building a business on solar power and future growth goals for the company. He speaks on Bloomberg Television’s “Taking Stock”. (Source: Bloomberg)

What does the company do?

We install solar systems for free.

The equipment is free, the installation is free, the insurance is free, the maintenance is free.

And then we sell the electricity at a lower rate than you can buy from the utility.

Given the choice of paying more for dirty power or less for clean power, most customers prefer less for clean power.

How do you sell it for free e that sounds like pie-in-the-sky.

How do you make money?

We sell the electricity.

Just the equipment and installation is free.

. you have to come up with the money first in order to get all the equipment and installation?

It is like plumbing or electrical installation business.

We have 4000 employees and we go to peoples homes and install the system.

We have customers sign up for a 20 year contract.

What we then do is we finance a portion of that 20 year contract to allow us to pay for the equipment and installation costs.

Our goal is to transform the way energy is delivered and eventually get to a point where we deliver it where it is needed versus transporting electricity hundreds of miles in an infrastructure that needs to change.

You want to become an electrical utility.

Absolutely.

We are supplementing the utilities.

About 80% of the energy comes from our solar systems and about 20% comes from the utility.

It is a new energy provider.

Having said that, i'm sure you are aware of center sessions, his comments today in washington about the valuation of certain solar city projects, and then those valuations being used to access grants in order to fund those installations.

What is your response?

That was a on an incorrect fact that was written in a burns article about a few months ago.

We will now be posting a blog to correct the right fax so that everybody can look at the right fax and see what is happening there.

The article came out during a time when we were in a quiet period and we could not comment.

The fcc required that we could not comment on any outlets.

So we had to stay quiet.

But now that it has surfaced again, we will post a blog to describe the correct acts.

Would you like to offer us a snippet of what you will be posting on the blog, just so we understand the nature of your response?

Absolutely.

Guidance has been posted on exactly what numbers to use.

We have followed that to the letter.

We will be posting that and that will be the main content of the blog.

Give us a little bit of your background.

You came to the united states and you are an expert in something called underwater hockey.

How did that figure into your being an entrepreneur here in silicon valley?

Like that is a fun topic.

I started my second company here in the bay area, but i did not have a university degree, so i could not get it or minute visa.

My wife happens to be one of the world's best underwater hockey players.

We both played for the u.s. team and she got her green card through underwater hockey and i was able to stay in the country through underwater hockey.

Do you feel in some ways that your industry is similar to underwater hockey, because it is interconnected to the subsystems , but also a fragmented business.

I could not be more excited about the solar industry.

It has done a fantastic job of bringing down in cost.

In many of the big states, they have incentives and adoption is even faster.

We have less than one percent penetration.

Inc.

About how costs will come down when we have 10% or 20% penetration.

The utilities cost keeps going up.

To me, it is inevitable.

The transformation will happen.

It's just a question of how long it will take.

You mentioned that customers sign a 20 year agreement with solar city am a correct?

Correct.

And what about the actual technology.

Won't that need to be replaced over that 20 year timeframe?

We will make sure the system performs for the next 20, 30 years.

The company is buying the electricity.

It is proven technology.

There is no maintenance.

It is not like a computer where you get a new computer and the old computer does not work.

This will always produce electricity and you will always be able to use electricity.

We expect the technology to last up to 35 years.

The warrantee itself is 25 years.

You've got a 25 year warranty on the installation of solarcity panels right now.

Yes, we take care of everything.

Is there anything that could cause any problems with the panels?

For example, inclement weather.

Yes, we build the weather conditions into our forecasting.

Once again, the customer is protected from this.

If the system doesn't produce electricity, the customer does not pay us.

Our interests are 100% aligned.

If it doesn't produce electricity, then they do not pay us.

I'm just wondering if you can connect for us the idea that there are renewable standards in various states, in terms of the amount of energy that each state must get from renewable sources.

How does that play into solarcity?

The largest contributor to air pollution today is the utility industry.

The largest contributor to water pollution today is the utility industry.

The largest consumer of water, utilities are the second largest.

The average household consumes more water in the creation of electricity itself and in water -- than with water consumption itself.

This is why it is important to transform this polluting energy source to a renewable energy source.

In many states have embraced it.

You have said you will clue -- create this blog to set the record straight when it comes to the letter that senator sessions created and wrote.

What do you have for the scholz -- the short sellers of shares of solarcity?

When you are looking at a disruptive technology like solar, where we can develop and deliver cheaper, cleaner energy, why wouldn't everybody eventually adopt it?

I would be very cautious about shorting the stock.

People want cleaner, cheaper electricity.

Do you have any intention of selling your stock in solarcity?

No, i have no intention right now.

Thank you.

Lyndon rive is the cofounder and

This text has been automatically generated. It may not be 100% accurate.

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