A Solar Power Success Story

Solarcity's innovative way of selling power could disrupt the utility industry

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The utility industry says those fears are overblown. "You might not need a [telephone] landline, but you're always going to want to be connected to the grid," says David Owens, the executive vice president at the Edison Electric Institute, a utility trade group. And solar has no shortage of obstacles along the way--including a ratcheting down of the federal tax credit, which is scheduled to fall to 10% in 2017. While the industry should continue to benefit from lower solar-panel prices, companies will also have to grapple with the more difficult task of reducing the cost of installation and other labor-intensive aspects of the business, a challenge that has proved far trickier.

SolarCity recently bought rooftop-solar-equipment provider Zep Solar, which has technology that can cut installation times from two or three days to as little as one day. The company is also trying to bulk up fast in an effort to get big enough to become essentially subsidy-proof. "The only way you can make that jump is to get massive scale," says Lyndon Rive. If SolarCity can keep growing and achieve its goal of becoming one of the largest energy companies in the country, Rive will have changed the electricity business forever. And Elon Musk might end up being known as Lyndon Rive's cousin.

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