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Clean Power Image Credit: Vivint Solar

Published on September 1st, 2014 | by Adam Johnston

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Vivint Solar IPO Rundown

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September 1st, 2014 by  

Solar Love.

Vivint Solar announced last week that it’s putting forward a $200 million IPO to the Securities Exchange Commission to finance future growth. The Vivint Solar IPO is an interesting one for many reasons.

Currently number two, behind SolarCity, in US solar PV installations, Vivint Solar’s IPO is being financially backed by some heavy hitters. Key underwriters include: Goldman Sachs, Merrill Lynch, Pierece, Fenner & Smith, and Credit Suisse, notes Reuters.

Vivint Solar IPO

Image Credit: Bayview Home with solar panels via Flickr CC (some rights reserved)

Vivint Solar’s growth has been steady. According to its SEC filing, it has provided 21,900 homeowners in 7 states with 129.7 MW of solar power capacity. Investors have committed over $443 million in investments to install over $1 billion in fair market value (FMV). It also has further tax equity commitments of 53 MW of installations, at a FMV of near $269 million.

Even with the company’s advances in installations, it has taken some heavy financial losses. By June 30, 2014, Vivint had lost $76.2 million. It has acknowledged further losses as it continues to expand its operations, and is unsure the revenue will increase fast enough to slow further financial pain. However, with many businesses in game-changing industries, it can take years before a company is profitable. It took Tesla ten years before finally making a profit in 2013.

As Vivint continues its growth while trying to stop the financial bleeding, Greentech Media had a great analysis on its operations and business model.

For starters, Vivint is in fewer markets than top dog SolarCity and some others. It’s in seven states (it just recently expanded to Arizona). In comparison, SolarCity, Sungevity, and Solar Universe are active in close to a dozen states. It is a distant second to SolarCity in California.

However, Vivint Solar has beat out for the past several quarters SolarCity as the top installer in Massachusetts and New York, showing its strongest market for further growth might on the East Coast.

Secondly, Vivint Solar uses its parent’s model for attracting sales. The following explains why it may not be expanding as fast as they would like:

Vivint Solar is well known for its sales model, which was adopted from its parent company Vivint Inc. and consists almost entirely of door-to-door soliciting (in addition to referrals). This strategy may explain the company’s slow expansion to new states, as it requires hiring a large sales team…. Vivint’s  acquisiton of Solmetric was meant to further increase the efficiency of its door-to-door sales by allowing sales reps to take roof measurements, create a preliminary design, and potentially close the sale on the first visit. The installer even foregoes state incentives in some cases to speed up the installation process.

Thirdly, Vivint is the only solar financier that currently has no loan option, choosing to go solely with leasing and purchase power agreements. It’s also one of two companies which both installs and finances solar systems. With solar financing a stumbling block for consumers, Vivint could always look for more creative financing schemes to attract customers down the road.

Cleantech IPOs have been quite successful in recent years. SolarCity, when it released its IPO in December 2012, raised $92 million on its first day. Its ending opening day share price was $11.79/share. As of August 29th, SolarCity’s share price was $68.68.

Tesla Motors’ IPO in 2010 raised $226 million, gaining 40% in stock value, ending at $17/share. Today, Tesla shares go for $269.70.

Whether Vivint can reach the scales of SolarCity or Tesla on its first day is highly unlikely. However, a successful IPO opening will give Vivint a much needed cash boost as it funds further growth and looks to increase its market share.

Originally published on Solar Love. Reproduced with permission.

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About the Author

Is currently studying at the School of the Environment Professional Development program in Renewable Energy from the University of Toronto. Adam graduated from the University of Winnipeg with a three-year B.A. combined major in Economics and Rhetoric, Writing & Communications. Adam also writes for Solar Love and also owns his own part time tax preparation business. His eventual goal is to be a cleantech policy analyst, and is currently sharpening his skills as a renewable energy writer. You can follow him on Twitter @adamjohnstonwpg or at www.adammjohnston.wordpress.com.



  • Steve Riley

    Curious how they got to that valuation.. SCTY market cap is $6B and they have installed more customers in Q2 2014 (30,000+) with a total of 150,000 customers than Vivint has in their lifetime (21,900 lifetime).

    SCTY total Megawatts deployed is 756MW vs. Vivint 129MW. Therefore, SCTY has installed and is installing about 6X as much yet is only getting 3.5X the market cap. So either SCTY should be trading much higher- about double; or Vivint is overpriced and should trade at about $1B, or the market thinks Vivint’s future prospects are WAY better than SCTY. I’d have to go with over-valued.

  • Eddie Jones

    I’ve had Vivint on my roof since February of last year. They hit the local area pretty hard and put up about half the solar systems I’ve seen locally.

    I might be inclined to play in the stock.

  • inductancereluctance

    With those kind of numbers, Vivint may just crush SolarCity in the end.

    • http://zacharyshahan.com/ Zachary Shahan

      Vivint’s CEO certainly thinks it will.

    • Steve Riley

      Those numbers look like Vivint is installing 1/6th of what SolarCity is yet expects 1/3rd the market cap….

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