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SolarCity absorbs $81M in financing

by Tom Park  |  Published February 29, 2012 at 12:30 PM
A year after private equity group Silver Lake launched its energy sector fund Silver Lake Kraftwerk, the investment vehicle announced Wednesday, Feb. 29, its first portfolio company: solar system installer SolarCity Inc.

SLKW is co-leading an $81 million round in the San Mateo, Calif.-based company alongside Valor Equity Partners, a Chicago-based private equity firm. Also investing in the round is Nicholas Pritzker, a partner at Tao Ventures and a senior development adviser at Hyatt Hotels Corp. Elon Musk, chairman of SolarCity and founder and CEO of electric automaker Tesla Motors Inc., also invested, as did Shea Ventures, the investment affiliate of home construction company Shea Homes, and DBL Investors.

SolarCity CEO Lyndon Rive said the funding would be used to develop new products and services, enter new geographic areas and seek out potential acquisitions. Last year, SolarCity acquired the residential installation business of GroSolar.

SolarCity says it has more than 30,000 solar installations completed or under way. It also offers maintenance services for its installations and financing for customers.

Since it was founded in 2006, the company has raked in a significant amount of equity investment -- more than $200 million. It has also attracted a long list of investors, including Mayfield Fund and Draper Fisher Jurvetson.

Tax equity financing, which enables investors to take advantage of federal tax benefits generated by renewable energy projects, has provided an even larger sum to SolarCity, to the tune of $1.3 billion. A good chunk of that came from California utility Pacific Gas and Electric Co., which in 2010 contributed $60 million.

The backing has helped propel the company to the top of the residential solar installation market, one that is worth upward of $2 billion, according to Greentech Media Inc. SolarCity's 2011 share of the residential market was about 14%, more than double that of the No. 2 installer, Real Goods Solar Inc.

Beyond the residential market, SolarCity has completed installations for several high-profile corporate and government customers, including eBay Inc., Wal-Mart Stores Inc., Intel Corp. and the U.S. military.
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Tags: DBL Investors | Elon Musk | Lyndon Rive | Nicholas Pritzker | Silver Lake | Silver Lake Kraftwerk | SolarCity Inc. | Tao Ventures | Tesla Motors Inc. | Valor Equity Partners

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Tom Park

Research Analyst, PIPEs



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