The first time I went to see solarcity, I wasn't really going to see SolarCity. It was February 2008, a moment when solar seemed poised to go supernova. I was in the San Francisco Bay Area to visit Nanosolar, a startup that was going to revolutionize the industry with its cheap manufacturing process for solar panels. I stopped by the SolarCity headquarters, then in Foster City outside San Francisco, mostly because the company--which is in the decidedly less glamorous business of actually selling and installing panels--had a connection to Elon Musk, founder of electric-car maker Tesla Motors. (Musk is a cousin of SolarCity CEO and co-founder Lyndon Rive and serves as the company's chairman.) I listened to Rive's energetic spiel and toured a warehouse where workers loaded panels onto delivery trucks. And then I continued on to the company I thought would be the actual future of solar.
By the time I visited SolarCity again, in late October this year, a few things had changed. Thanks to a supply glut, the solar-manufacturing industry had crashed, leaving dead startups in its wake--including Nanosolar, which went bankrupt and was sold for scrap in July. (Solar also became politically charged when government-backed Solyndra went under two years ago.) But while the plummeting price of solar modules killed manufacturers, it proved a boon to installers, who could offer solar power at an increasingly affordable cost to homeowners and businesses. No company benefited more than SolarCity, which has emerged as the U.S.'s leading solar provider.
Since its founding in 2006, SolarCity has installed 464 megawatts of solar power--the equivalent of about half the output of a typical nuclear plant. It has roughly doubled in size each year, and its market value has multiplied fivefold since it went public at the end of 2012, making it the top clean-tech stock not named Tesla. Rive is aiming for still more. He's set a goal of reaching 1 million customers by the middle of 2018, up from around 80,000 now. "A million customers would make us a real-size energy provider," says the 36-year-old Rive. "And that's going to make for an interesting dynamic with utilities. We're going to change the business model."
Solar power is still a minuscule part of the overall energy picture, accounting for less than 1% of U.S. electricity production. But it is growing rapidly--photovoltaic capacity rose 76% in 2012, and more than 40% of existing U.S. solar came online last year. Thanks to concerns over grid reliability--more than 8 million people lost power after Superstorm Sandy last year, some for weeks--and a 500% drop in the cost of solar panels since 2008, solar power looks like a surprisingly good deal.
If solar can keep up its heady rate of growth, transforming more and more customers from passive energy consumers into independent power producers, it could cut into utility profits and disrupt the staid electricity business. And that's exactly what SolarCity wants. "We're going to keep doing it through the country and the world," says Peter Rive, Lyndon's brother and COO, CTO and co-founder of SolarCity. "Why? Because it doesn't emit carbon dioxide, and it's freaking cheaper."