Mixed Greens: SolarCity IPO a go, but cheap at nearly half the price

The closely watched Nasdaq IPO solar leasing vanguard SolarCity has finally launched, but not before taking another hit. The company filed a revised prospectus with the Securities and Exchange Commission on Wednesday, pricing its IPO at $8 a share – well below earlier estimates. Bloomberg reports that the solar provider’s float that had originally hoped to raise upwards of $US150 million, raised $92 million in its initial public offering, 39 per cent less than initially sought, selling 11.5 million shares, equivalent to a 16 per cent stake, at $8 each.

The NYTs DealBook reports that as recently as Tuesday, the San Mateo-based company expected to raise as much as $US151 million, at a price of $13-$15 a share. That amount, too, was revised down from the $US201 million that the company – founded by brothers Lyndon and Peter Rive and chaired by Tesla’s Elon Musk – initially sought to raise when it first made its IPO filing public in October.

News of the price revision came hot on the heels of reports that SolarCity had postponed the IPO, which, as Forbes‘ Todd woody points out, must have had an eerily familiar ring to those investors who recalled the last-minute withdrawal, last April, of solar thermal player BrightSource Energy’s IPO, due to “adverse market conditions.” The price cut was also preceded with a pledge from Musk, who also happens to be the Rives’ cousin, to buy $15 million worth of stock in the offering underwritten by Goldman Sachs, Credit Suisse, Bank of America Merrill Lynch, Needham and Company and Roth Capital Partners.

Ultimately, the success, or otherwise, of SolarCity’s IPO will be viewed as more than as a general solar market bellwether. As DealBook notes, it is also “likely to be seen as a validation or repudiation” of solar leasing as a new and viable business model for the industry to pursue. SolarCity finances and installs rooftop solar systems in exchange for long-term monthly payments from its customers. The solar leases typically run 20 years. The company reported $59.6 million in revenue last year, an 84 per cent gain on 2010, but also a $61 million operating loss. Analysts point to hurdles like the high cost of bringing in new customers, that could keep it from reaching mass scale.

In other news…

Conergy says successful “cyclone testing” has confirmed that its PowerPlus PV modules can withstand the most severe cyclonic storms that today’s warming-affected weather systems can dish up. The company says the cyclone tests add to the others that its modules have now passed “with flying colours,” including those for large hail, ammonia and salt mist.

The US DoE has announced it will award as much as $US169 million to seven proposed offshore wind projects, off the coasts of Maine, New Jersey, Ohio, Oregon, Texas and Virginia. The wind farms will receive as much as $4 million to complete engineering, site evaluation and other pre- construction work, while three will be selected to get as much as $47 million to fund construction and operations by 2017.

The UK’s Committee on Climate Change has released a new report warning that failure to support renewable energy development, coupled with a heavy reliance on gas, could add up to £600 to household energy bills by 2050.