SolarCity Corporation was a company that sold shares to the public and was based in Fremont, California. It provided solar energy systems and related products and services to homes, businesses, and industries. The company was started on July 4, 2006, by Peter and Lyndon Rive, who are cousins of Elon Musk, the CEO of SpaceX and Tesla. In 2016, Tesla bought SolarCity for about $2.6 billion (which was worth about $3.5 billion in 2025) and combined its solar business with Tesla Energy.
SolarCity focused on selling solar systems through door-to-door visits. Customers could lease the systems without paying upfront costs but agreed to buy the electricity generated by the panels for 20 years. This business model became the most popular in the United States, making SolarCity the largest residential solar installer. However, by the time Tesla acquired the company in 2016, SolarCity had more than $1.5 billion in debt (which was worth about $2 billion in 2025).
Before Tesla bought SolarCity, the two companies had a partnership announced in Tesla's 2006 master plan. Elon Musk, Tesla's CEO, was the chairman of SolarCity. SolarCity provided free charging for Tesla Roadster owners at its stations and was one of the first companies to install Tesla Powerwall home energy storage batteries.
History
SolarCity was started in 2006 by brothers Peter and Lyndon Rive from South Africa. Their cousin, Elon Musk, suggested the idea for a solar company. Elon Musk was the chairman and helped start the company. By 2009, the solar panels installed by SolarCity could produce 440 megawatts (MW) of power.
In 2011, SolarCity expanded to the East Coast by buying the solar division of Clean Currents and groSolar. After these purchases, SolarCity opened operations in Connecticut, Pennsylvania, South Carolina, Florida, Vermont, and New Hampshire.
In 2013, SolarCity became the top residential solar installer in the United States. Solar Power World magazine ranked it as the second-largest solar installation company in the U.S. that year. SolarCity bought Paramount Solar from Paramount Equity for $120 million in 2013. By 2015, its installed panels could generate 870 MW of power and made up about 28% of non-utility solar installations in the U.S.
In October 2014, SolarCity announced it would offer up to $200 million in solar bonds in its first public offering in the United States. In March 2016, SpaceX purchased $90 million of SolarCity stock.
In late 2015, SolarCity stopped selling and installing solar panels in Nevada after the state’s Public Utilities Commission (PUC) raised monthly fees for rooftop solar customers and reduced the value of solar energy sold back to the grid. The monthly fee for Nevada Power’s rooftop solar customers increased from $12.75 to $17.90 and was scheduled to rise to $38.51 by 2020. At the same time, the payment for surplus solar energy was reduced over four years. Because of these changes, SolarCity lost over 550 jobs in Nevada.
In 2015, SolarCity’s employee count grew by 69%, reaching 15,273 workers. To save money, SolarCity cut 20% of its workforce in 2016, ending the year with 12,243 employees. This was the first time the company reduced its workforce.
The job cuts affected all parts of the company: 22% of jobs were cut in operations, installations, and manufacturing; 27% were cut in sales and marketing. In August 2016, SolarCity announced it would spend up to $5 million to cover the costs of layoffs. The company also reduced the salaries of its two co-founders from $275,000 to $1 per year.
On August 1, 2016, Tesla announced it would buy SolarCity in a $2.6 billion deal using all stock. Tesla’s mission has always been to help the world move toward sustainable energy. As part of Elon Musk’s "The Secret Tesla Motors Master Plan," Tesla aimed to shift the world from using fossil fuels to using solar energy. The acquisition was approved by antitrust regulators.
More than 85% of unaffiliated shareholders from Tesla and SolarCity voted to approve the deal on November 17, 2016. The acquisition was completed on November 21, 2016.
Some investors criticized the deal, calling it an attempt to save two companies that rely on investors and government funding. In April 2022, a Delaware court ruled in favor of Elon Musk in a lawsuit about the SolarCity acquisition. The court stated that Tesla’s board carefully reviewed the deal and that Tesla paid a fair price for SolarCity. The court also noted that Tesla’s value increased significantly after the acquisition.
In April 2017, SolarCity’s chief policy officer, John Wellinghoff, left the company. In June 2017, Lyndon Rive left SolarCity, and Peter Rive left shortly after. By 2019, Tesla’s share of the solar panel market was declining, leading the company to reduce its sales team. Revenue from Tesla’s energy generation and storage operations dropped 7% in the first nine months of 2019 compared to the same period in 2018, reaching $1.1 billion.
Products and services
In 2008, SolarCity started offering a new way for homeowners to lease rooftop solar panels. Customers could use the panels without paying any money upfront. In exchange, they paid for 20 years for the power the panels produced. This allowed some homeowners to pay less each month for electricity than they had before.
The "no-money-down solar" business model became the most popular in the U.S. and led to more solar installations. However, it also increased SolarCity's debt significantly, which was about half of the company's more than $3 billion in debt by 2016. Some consumer groups and government officials criticized the model.
In May 2008, SolarCity completed what was, at the time, the largest commercial solar installation in San Jose, California, at the North Campus of eBay. In July 2008, SolarCity completed what was, at the time, the largest commercial solar installation in San Francisco, California, with 1,606 solar panels for British Motor Car Distributors. SolarCity added financing options for businesses in 2009 and built solar projects for companies like Walmart, Intel, and the U.S. military. In 2013, SolarCity created GivePower, a non-profit branch of its solar business, which operates independently.
SolarCity used special mounting hardware that "snaps together" on rooftops, removing the need for metal rails. It also used skirts to hide the hardware and edges of the panels. SolarCity acquired this technology when it bought Zep Solar in 2013. The "railless" system allowed installers to place solar panels on roofs faster than traditional methods. Traditionally, workers first attached metal rails to roofs before mounting panels. Tesla Energy continues to use this technology for its solar installations.
In 2010, SolarCity bought Building Solutions, a company that provides home energy audits. SolarCity then offered energy efficiency evaluations and improvements. It expanded these services to the East Coast and partnered with Admiral's Bank of Boston in 2012 to offer loans for energy upgrades.
In 2009, SolarCity entered the electric car charging business by buying SolSource Energy from Clean Fuel Connections, Inc. In 2011, SolarCity partnered with Rabobank to provide free electric car charging for Tesla Roadster owners traveling along U.S. Route 101 in California between San Francisco and Los Angeles. However, Tesla later started its own Supercharger stations in 2012.
SolarStrong was SolarCity's plan to build more than $1 billion in solar projects for privatized military housing across the U.S. It was announced in late 2011. SolarCity worked with Lendlease to develop the project at 124 military bases in 33 states. The project involved financing from Bank of America Merrill Lynch, USRG Renewable Finance, and U.S. Bancorp. It received a partial $344 million federal loan guarantee from the U.S. Department of Energy, but the guarantee was removed after the project began.
The project started in 2011 with the Joint Base Pearl Harbor–Hickam in Hawaii, followed by Davis–Monthan Air Force Base in Arizona. In 2012, it expanded to the Los Angeles Air Force Base in California, and Peterson Air Force Base and Schriever Air Force Base in Colorado.
In 2016, SolarCity tested a grid backup system by installing GridLogic software and 10-kilowatt-hour Tesla Powerwall batteries in 500 homes in California. This test was also conducted in Vermont.
Giga New York
In 2014, SolarCity announced plans to build a new manufacturing facility (now called Gigafactory 2) in Buffalo, New York, with SUNY Polytechnic Institute. This happened after SolarCity bought Silevo, a company that makes high-efficiency solar modules. The initial facility would be 1.2 million square feet (110,000 m²) and cost $900 million. It would create 1,500 jobs in Buffalo and 5,000 jobs across New York. The plant was planned to produce one gigawatt of solar panels each year by 2019, making it the largest solar plant in the United States. Construction began in September 2014, with a goal to finish by early 2016.
The facility would be the largest of its kind in the Western Hemisphere. Panasonic would handle production at the Buffalo plant, investing $256 million. Panasonic and SolarCity/Silevo were developing similar but different HIT-technology. Panasonic planned to use SolarCity’s 6-inch (150 mm) wafers to combine both companies’ technologies, aiming for an efficiency of 22%. SolarCity expected demand to exceed the Buffalo plant’s daily production of 10,000 solar panels and purchased equipment from other manufacturers until more factories could be built. SolarCity was required to spend $5 billion over the next decade on the facility and create more than 1,460 direct manufacturing jobs.
In February 2016, SolarCity’s CEO, Lyndon Rive, announced that delays in receiving machinery would push production to summer 2017. New York State owns the building and most of the equipment, leasing it to SolarCity. Most work was completed by November 2016, but the Buffalo Billion project was under investigation, which delayed state payments to contractors. This did not stop construction progress. SolarCity began hiring for the facility in December 2016.
In 2017, Elon Musk announced that Tesla’s solar roof products would be made at the Buffalo facility by the end of 2017. By August 2017, production of solar roof tiles had started at the facility, and Tesla planned to increase production throughout the year. By the end of 2018, the facility employed about 800 workers. New York State required the company to hire at least 1,460 workers by April 2020 or face a $41.2 million penalty. In February 2020, SolarCity reported having 1,500 workers at the facility. Panasonic announced in May 2020 that it would stop operations at the facility.
Lawsuits and investigations
The Buffalo Billion program was a $1 billion initiative started by New York Governor Andrew Cuomo’s administration to improve the city of Buffalo. A major part of the program involved a solar panel factory that SolarCity planned to lease at the High-Tech Manufacturing Innovation Hub in RiverBend. The state set aside $750 million to fund the hub. According to Daily Energy Insider, the factory would produce 1 gigawatt of solar energy annually once fully operational and could make about 10,000 solar panels each day.
On April 29, 2016, U.S. Attorney Preet Bharara, from the Southern District of New York, began looking into state construction projects and contracts, including the Buffalo Billion. SolarCity was not the focus of the investigation and was not involved in selecting vendors or signing contracts. SolarCity stated it was working with federal investigators.
The New York Times reported that the Buffalo Billion program benefited individuals and groups connected to the governor, including developers and people who donated to his campaign. Governor Cuomo defended the project, saying it helped reduce unemployment and increase spending in Buffalo.
Three executives from LPCiminelli Development were charged with 14 counts of wire fraud, bribery, and bid rigging related to the SolarCity RiverBend construction contract. Five other individuals were also charged with related crimes.
On May 18, 2016, the Public Authorities Control Board postponed a meeting to approve $485 million in new funding for SolarCity. In April 2017, the New York state legislature planned to add $500 million to the Buffalo Billion program. In exchange, the legislature asked the Cuomo administration to be more transparent about how the money was used.
On March 30, 2017, The Oregonian reported that the Campaign for Accountability, a consumer advocacy group, and others requested Oregon Attorney General Ellen Rosenblum to investigate SolarCity’s solar panel sales practices. The group claimed SolarCity misled Oregon homeowners about costs, tax credits, and energy savings. The Oregon Solar Energy Industry Association said the number of complaints was low compared to what the Campaign for Accountability reported.
Investigations found SolarCity inflated the cost of 14 commercial solar projects by more than 100% to qualify for higher state tax credits. SolarCity and its accountant had to return $13 million to Oregon. The investigation also found fake documents were submitted for some projects, and a bribery scheme involved a project’s energy consultant and a state Energy Department manager. One of SolarCity’s suppliers used prisoners at a federal prison in Oregon to reduce costs.
SolarCity was involved in a case with Martin Shain, a consultant for a solar project at two Oregon universities. Shain was charged with forgery in 2016. He worked for BacGen Technologies, a company linked to the $24 million "Solar by Degree" project. Shain is accused of creating a fake invoice from a fictional subcontractor to get $12 million in tax credits. The project, started in 2013, was supported by the Oregon University System and included solar panels on campuses in Oregon State University and the Oregon Institute of Technology.
The state’s case against Shain relies on two documents: an invoice from Solar Foundations Systems dated February 25, 2011, and a letter from Ryan Davies, former head of RedCo, a Utah-based company. The letter claimed $210,000 had been spent on the project. The invoice detailed solar array construction and was needed to prove work was done to get tax credits. However, the company named on the invoice, Solar Foundations, does not exist. Davies denied writing the letter and said his name was forged. The state claims Shain forged both documents, but he denies it, saying the invoice was given to him by someone else. The tax credits were given to SolarCity and its financial backers, who provided upfront funding in exchange for a share of project revenues and tax credits. SolarCity said it followed Oregon Department of Energy requirements and had no knowledge of the fake documents.
In 2012, the U.S. Treasury Department began investigating solar companies about their fair market value calculations for solar systems. SolarCity said its values were correct and met Treasury guidelines. By December 31, 2015, SolarCity had received about $501.2 million in tax credits. In 2017, SolarCity settled an investigation by agreeing to pay $29.5 million without admitting guilt or liability.
Since 2006, SolarCity lowered the minimum FICO score required for customers to get solar leases. It uses a score of 650, considered a "fair" credit rating, as the cutoff. Between 2014 and 2017, SolarCity signed long-term lease agreements with at least 14 homeowners before they defaulted on their mortgages. The company has been named in 139 lawsuits related to residential foreclosure actions.
SolarCity told the New York Times that out of over 305,000 customers, it is involved in 139 legal cases. It said being named in a foreclosure proceeding gives it notice to reassign contracts, and many cases are resolved quickly with banks.
In May 2017, the Securities and Exchange Commission (SEC) began investigating Sunrun and SolarCity about whether they properly disclosed canceled contracts. Some customers claimed they canceled contracts after being pressured into solar deals, and hundreds of complaints were filed with state attorneys general. The federal government is also looking into whether solar companies hide how many customers they lose. The SEC is involved because investors use cancellation rates as a metric to assess company performance.
The Checks and Balances Project
SolarCity provides financial support to a political advocacy group called the Checks and Balances Project. This group has criticized members of the Arizona Corporation Commission, which is the government agency that regulates electricity and utilities in Arizona, for being too closely connected to utility companies. The Checks and Balances Project has asked for public records multiple times from the Arizona Corporation Commission. In July 2016, the Federal Bureau of Investigation interviewed the leader of the Checks and Balances Project as part of an investigation into how money was used to fund certain Arizona state elections in 2014.
Project financing and the Google Fund
SolarCity worked with banks, big companies, and financial markets to create special funds to support its lease and power purchase agreement (PPA) options. One well-known partnership was a $280 million fund created with Google in June 2011 to finance residential solar installations. This fund was the biggest of its kind in the United States and Google's largest investment in clean energy at that time.
Trade organization and collaboration
The company is one of the original members of The Alliance for Solar Choice, or TASC, which is a group that helps with solar power on rooftops.
The SunShot Initiative is a national program that helps people use solar energy. It is managed by the Solar Energy Technologies Office in the US Department of Energy and supports research and projects that help develop and use solar energy. It works with private companies, schools, governments, and other groups. The program started in 2011 with the goal of making solar energy as cheap as traditional electricity by 2020. By 2016, it had completed 70% of the progress needed to reach that goal.
In the 2012 Congressional budget, the program received $457 million. According to the US Department of Energy’s request for that year, "The program also helps connect solar systems to the power grid by creating new ways to lower costs and improve reliability. It also supports industry growth through testing and tools to understand how solar energy works with the power grid."
SolarCity worked with the program, along with the Energy Department’s National Renewable Energy Laboratory and Hawaiian Electric Industries. Using government and taxpayer money, SolarCity helped 2,500 homes in Hawaii connect their solar power systems to the grid by the end of December 2015.