Photo illustration by Lisa Larson-Walker. Photos courtesy SolarCity & Jason Wesley Upton/Flickr via Creative Commons.
In 2004, Lyndon Rive was in an RV on his way to Burning Man when his cousin gave him five words of advice: “You should look into solar.” The way Rive tells it, it sounds a little like Mr. McGuire in The Graduate telling Dustin Hoffman to think about plastics.
Except that Rive’s cousin is Elon Musk. And Musk’s runic advice has led to a $5 billion business that is reshaping how Americans get their electricity.
Just 27 at the time of that RV ride, Rive was already the co-founder and chief executive of a Silicon Valley information-technology business, Everdream, which sold desktop management services to small businesses. It was flourishing, but Rive felt unfulfilled. “I just had this bug I had to address, which is that we have to change the way we burn fossil fuels,” he says over coffee in Manhattan this past summer. “We just have to.” The intensity with which he states this is startling.
Rive had always looked up to Musk, his eldest cousin, billionaire co-founder of PayPal, SpaceX, and Tesla. Unlike Musk, Rive is not an inventor or a technological genius. He was nearly expelled from high school in South Africa, never went to college, and at one point, secured a U.S. visa not by his technological prowess but by his skill at the little-known sport of underwater hockey. But he’s always had a nose for unconventional business opportunities, and he shares Musk’s attraction to seemingly impossible challenges. So when Musk mentioned solar, Rive took the suggestion seriously—even though he knew next to nothing about the solar-energy market.
Nine years later, Rive has built a company, SolarCity, that threatens to upset the country’s fossil-fuel-based electric-utility industry. By offering solar panels to homeowners for less than the price they’re already paying for electricity, SolarCity quickly became the nation’s largest residential solar-panel installer. As other solar startups have struggled and gone bust—Solyndra is one of many—SolarCity has roughly doubled in size each year. Its market value has multiplied sixfold since it went public in December 2012, making it the hottest clean-technology stock since Tesla.
The promise of SolarCity is to build a full-service brand that people recognize and trust, like Apple with hardware and software—or Tesla with cars.
Rive isn’t a billionaire; his share of SolarCity is 4 percent, the equivalent of about $200 million today. Despite its soaring stock, it hasn’t yet turned a profit. But the company may have already made $1 billion for Musk, who is both its chairman and largest shareholder. And if it reaches the stunningly ambitious goal that Rive has set for it—1 million customers in the next five years—Rive might just join his cousin on the Forbes list after all.
When Rive set out to learn about solar power, the residential market in the U.S. was tiny and fragmented, with most of the work done by local installers who had more affinities with plumbing and landscaping businesses than with Silicon Valley startups. At a small industry conference, Rive says, “We kept asking questions about innovation: ‘What are you doing to change? How are you accelerating adoption?’ And no one had any answer.”
Rive remembers thinking: “That’s my competition—awesome. Let’s get going.”
Those panel installers weren’t idiots. The obstacles to growth were real. Solar panels were expensive, and it took time and manpower to install each one. Regulations and subsidies varied from city to city and state to state. Most Americans felt they couldn’t afford solar power, even if they wanted it. Sure, they might save money over time, but the upfront costs were daunting, running upward of $20,000 for equipment, installation, and permits. The Silicon Valley venture capitalists that Rive approached weren’t interested. As a business, solar-panel installation just wouldn’t scale, they said.
Source: http://www.slate.com/articles/business/billion_to_one/2013/11/solarcity_s_lyndon_rive_elon_musk_s_cousin_making_solar_panels_hot_again.html
Category: tim tebow
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