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 leader of SpaceX and Tesla. In 2016, Tesla bought SolarCity for about $2.6 billion (equivalent to $3.5 billion in 2025) and combined its solar business with Tesla Energy.

SolarCity focused on selling solar systems through in-person visits. Customers paid no money upfront but agreed to buy the electricity generated by the panels from the company for 20 years. This model became the most popular in the United States, making SolarCity the largest installer of residential solar systems. However, by the time Tesla acquired it in 2016, SolarCity had more than $1.5 billion in debt (equivalent to $2 billion in 2025).

Before Tesla bought SolarCity, the two companies worked together to promote their products, as outlined in Tesla’s first master plan from 2006. Elon Musk, Tesla’s CEO, was the chairman of SolarCity. SolarCity also offered 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 founded in 2006 by South African brothers Peter and Lyndon Rive. The idea for the company came from their cousin, Elon Musk, who was the chairman and helped start the company. By 2009, the solar panels SolarCity had installed could generate 440 megawatts (MW) of power.

In 2011, SolarCity expanded to the East Coast by purchasing the solar division of Clean Currents and groSolar. After these purchases, the company 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. It was also ranked as the second-largest overall solar installation company in the U.S. that year. SolarCity bought Paramount Solar from Paramount Equity for $120 million in 2013. By 2015, the solar panels it had installed 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 of bonds in the United States. In March 2016, SpaceX purchased $90 million worth 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 service charges for rooftop solar customers and reduced the value of solar energy sold back to the grid. Under the new rules, the monthly charge for Nevada Power customers increased from $12.75 to $17.90 and was scheduled to rise to $38.51 by January 1, 2020. At the same time, the payment for surplus solar energy given to customers was reduced and continued to decline over four years. Because of these changes, SolarCity lost more than 550 jobs in Nevada.

In 2015, SolarCity’s employee count grew by 69%, reaching 15,273 workers. To save money, SolarCity reduced its workforce by 20% in 2016, ending the year with 12,243 employees. This was the first time the company cut jobs.

The job cuts affected all areas of the company: 22% of jobs were lost in operations, installations, and manufacturing, and 27% were lost in sales and marketing. In August 2016, the company announced it would spend up to $5 million to cover the costs of layoffs. It also reduced the salaries of its two co-founders from $275,000 to $1 per year.

On August 1, 2016, Tesla announced it would acquire SolarCity in a $2.6 billion all-stock deal. Tesla’s mission has always been to help the world transition to sustainable energy. As part of Elon Musk’s "The Secret Tesla Motors Master Plan," Tesla aimed to move the world away from a fossil fuel-based economy and toward a solar electric economy. 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, allowing the acquisition to complete 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 shareholder lawsuit over Tesla’s acquisition of SolarCity. The court stated that Tesla’s board thoroughly reviewed the deal and that Elon Musk did not block it. It also noted that Tesla paid a fair price for SolarCity and that Tesla’s value increased significantly after the acquisition.

In April 2017, John Wellinghoff, SolarCity’s chief policy officer, left the company. In June 2017, Lyndon Rive left SolarCity, and Peter Rive left shortly after. By 2019, Tesla’s solar panel market share was declining, leading the company to reduce its sales force. Revenue from Tesla’s energy generation and storage operations from January to September 2019 dropped 7% compared to the same period the previous year, reaching $1.1 billion.

Products and services

In 2008, SolarCity began offering solar leases to homeowners. This allowed customers to install solar panels on their rooftops without paying any money upfront. Instead, they paid for the electricity generated by the panels over 20 years. This option helped some homeowners save money each month compared to their previous electricity bills from the utility company.

The "no-money-down solar" model became the most popular in the United States. It increased the number of solar installations but also added significant debt to SolarCity. By 2016, this model contributed about half of SolarCity's over $3 billion in debt. Some consumer groups and government officials criticized the model.

In May 2008, SolarCity completed what was then the largest commercial solar installation in San Jose, California, at the North Campus of eBay. In July 2008, SolarCity completed the largest commercial solar installation in San Francisco, California, using 1,606 solar panels for British Motor Car Distributors. In 2009, SolarCity added new financing options for businesses 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, which eliminated the need for rails. It also used skirts to hide the hardware and edges of the panels. SolarCity acquired this technology when it purchased Zep Solar in 2013. The "railless" system made it faster for installers to place solar panels on rooftops. Traditionally, solar panels required workers to first install rails on rooftops before attaching the panels. Tesla Energy continues to use this technology for its solar installations.

In 2010, SolarCity bought Building Solutions, a company that checks homes for energy use and offers improvements. SolarCity expanded its energy efficiency services to the East Coast and partnered with Admiral's Bank of Boston in 2012 to offer a loan to help pay for energy upgrades.

In 2009, SolarCity entered the electric car charging business by purchasing 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 five-year plan to build over $1 billion in solar projects for privatized military housing communities across the United States. It was announced in late 2011. The project involved 124 military bases in 33 states and was carried out with Lendlease. Financing came from Bank of America Merrill Lynch, USRG Renewable Finance, and U.S. Bancorp. The project also had a partial $344 million federal loan guarantee from the U.S. Department of Energy, but the guarantee was removed after the project started.

The project began in 2011 with work at Joint Base Pearl Harbor–Hickam in Hawaii, followed by Davis–Monthan Air Force Base in Arizona. In 2012, it continued with 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 backup power system by installing GridLogic software and 10-kilowatt-hour Tesla Powerwall battery packs in 500 homes in California. This test was also conducted in Vermont.

Giga New York

In 2014, SolarCity said it would 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 panels. The first building would be 1.2 million square feet (110,000 square meters) 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 started 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 agreed to operate the Buffalo plant and invested $256 million. Panasonic and SolarCity/Silevo were working on similar but slightly different HIT-technology. Panasonic planned to combine SolarCity’s 6-inch (150 mm) wafers with its own technology to reach an efficiency of 22%. SolarCity expected demand for solar panels to grow faster than the Buffalo plant could produce, so it bought equipment from other companies until more factories were built. SolarCity was required to spend $5 billion over the next 10 years on the facility and create more than 1,460 direct manufacturing jobs.

In February 2016, SolarCity’s CEO, Lyndon Rive, said production would start in summer 2017 because of delays in receiving machinery for the plant. New York State owns the building and most of the equipment, renting it to SolarCity. Most work was completed by November 2016, even though the Buffalo Billion project was being investigated, which delayed state payments to contractors but did not slow construction progress. SolarCity began hiring workers for the facility in December 2016.

In 2017, Elon Musk said Tesla would move production of its solar roof products to 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 had about 800 workers. New York State required the company to employ at least 1,460 workers by April 2020 or pay a $41.2 million penalty. In February 2020, SolarCity reported having 1,500 workers at the facility. Panasonic announced it would stop operating at the facility in May 2020.

Lawsuits and investigations

The Buffalo Billion program is a plan that uses one billion dollars to help improve the city of Buffalo, New York. A key part of this plan was a solar panel factory that SolarCity planned to lease at the High-Tech Manufacturing Innovation Hub in RiverBend. The state of New York gave $750 million to support the hub. According to Daily Energy Insider, the factory would produce one gigawatt of solar energy each year once fully built and would make about 10,000 solar panels daily.

On April 29, 2016, U.S. Attorney Preet Bharara started an investigation into state construction projects, including the Buffalo Billion. SolarCity was not part of the investigation and did not take part in choosing contractors or signing contracts. SolarCity said it was working with federal investigators who contacted the company.

The New York Times reported that the Buffalo Billion program benefited people connected to the governor and other developers who received money from the program. Governor Andrew Cuomo defended the project, saying unemployment in Buffalo had decreased and spending in the area had increased.

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 delayed a meeting to approve $485 million in new funding for SolarCity. In 2017, the New York state legislature planned to add $500 million to the Buffalo Billion program in exchange for the Cuomo administration to increase transparency about how the money was used.

On March 30, 2017, The Oregonian reported that the Campaign for Accountability and other groups asked Oregon Attorney General Ellen Rosenblum to investigate SolarCity for misleading practices that violated Oregon’s Unlawful Trade Practices Act. The request specifically targeted SolarCity, citing complaints from Oregonians who said the company misled them about costs, tax credits, and energy savings.

The Campaign for Accountability reviewed 58 complaints filed with the Oregon Department of Justice and said the complaints showed a widespread pattern of fraud and abuse by solar companies. The Oregon Solar Energy Industry Association said the number of complaints was low compared to what the Campaign for Accountability claimed.

Investigations found that SolarCity tried to "cheat the system" by increasing 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 the state of Oregon. The investigation also found that 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 the Federal Correctional Institution in Sheridan, Oregon, to reduce costs.

SolarCity was involved in a case involving Martin Shain, a consultant for a solar project at two Oregon universities. Shain was indicted for forgery in 2016 and is accused of creating a fake invoice from a fictional subcontractor to get $12 million in tax credits from the Oregon Department of Energy. The project, called "Solar by Degree," began in 2013 and was supported by the Oregon University System. It included thousands of solar panels on 21 acres at Oregon State University and the Oregon Institute of Technology in Klamath Falls.

The state’s case against Shain relies on two documents: an invoice from Solar Foundations Systems dated February 25, 2011, and a December 2011 letter signed by Ryan Davies, former head of RedCo, a company involved in the project. The letter claimed $210,000 had been spent on the project and that construction was progressing. The invoice provided proof of work to qualify for 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. Shain denies forging the invoice and says it was given to him by someone else. The tax credits were given to SolarCity and its financial backers. SolarCity stated it followed the Oregon Department of Energy’s requirements and had no knowledge of the fake documents.

In 2012, the Treasury Department began investigating solar companies about their calculations for the fair market value of solar energy systems. SolarCity said its values were correct and followed Treasury guidelines. SolarCity received about $501.2 million in tax credits by December 31, 2015. In 2017, SolarCity settled the investigation by paying $29.5 million without admitting guilt or liability.

Since 2006, SolarCity has lowered the minimum FICO score required for customers to qualify for solar leasing deals. It uses a score of 650 as the cutoff. However, between 2014 and 2017, SolarCity signed long-term lease agreements with at least 14 homeowners right before they defaulted on their mortgages. The company has been named in 139 lawsuits related to residential foreclosure actions.

SolarCity stated in a response to The New York Times that out of more than 305,000 customers who installed solar panels, it is involved in 139 legal cases related to foreclosures. The company said being named in these cases gives it advance notice to reassign contracts, and many are quickly resolved with the relevant bank.

The Securities and Exchange Commission (SEC) began investigating Sunrun and SolarCity in 2017, looking into whether they properly disclosed canceled contracts. Some customers said they canceled contracts after being pressured into solar deals, and hundreds of complaints were filed with state attorneys general. The federal government is also investigating whether solar companies are hiding how many customers they are losing. The SEC is involved because investors use this information to assess company performance.

The Checks and Balances Project

SolarCity helps fund a group called the Checks and Balances Project, which works to influence politics. This group has criticized members of the Arizona Corporation Commission, a group that regulates electricity and utilities in Arizona, for being too closely linked to utility companies. The Checks and Balances Project has asked for public records from the Arizona Corporation Commission multiple times. In July 2016, the Federal Bureau of Investigation interviewed the leader of the Checks and Balances Project as part of an investigation into where money came from for certain Arizona statewide elections in 2014.

Project financing and the Google Fund

SolarCity worked with banks, large companies, and financial markets that use assets as security to create special funds to help pay for its lease and power purchase agreement (PPA) options. One of SolarCity's more well-known financing partnerships was a $280 million fund created with Google to support residential solar installations in June 2011. The Google Fund was the biggest fund of its kind in the United States and Google's largest investment in clean energy.

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 the solar energy industry.

The SunShot Initiative is a national program that helps people use solar energy. It is managed by the US Department of Energy and supports research and projects to develop, test, and use solar energy. The program works with businesses, schools, government groups, and labs. It started in 2011 with the goal of making solar energy as affordable as traditional electricity by 2020. By 2016, it had reached 70% of that goal.

In 2012, the program received $457 million from Congress. According to the US Department of Energy’s request for that year, "The program also helps improve how solar systems work with the power grid by creating better tools and standards."

SolarCity worked with the Energy Department and Hawaiian Electric Industries. Using government money, they helped 2,500 homes in Hawaii connect their solar systems to the power grid by December 2015.