Legendary Investors Step Up Investments in Clean, Renewable Energy

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Photo courtesy SolarCity

The battle to extend, even expand, federal government support for renewable, clean energy resource development as opposed to continuing to favor fossil fuels is shaping up to be a key political issue distinguishing Democratic and Republican platforms in the run-up to this year’s elections. Signs that private sector investors of various stripes are willing to invest in renewable energy projects are being seen even as expiration of federal subsidies and other incentives for wind, solar, and other clean energy resources threaten these fast-growing industries, showing that, despite the subsidy struggles, these clean energy sectors are sure to be key economic drivers in coming decades.

On Feb. 29, residential solar energy systems crowdsourcing pioneer SolarCity announced that legendary investor George Soros’s recently launched clean energy development fund, Silver Lake Kraftwerk, and Valor Equity Partners co-led the raising of $81 million in private equity capital to help fund its expansion plans.

Buying into Solar Leasing

Also investing were Tao Ventures partner Nicholas J. Pritzker, Shea Ventures, an affiliate of SolarCity partner Shea Homes, SolarCity chairman Elon Musk, and existing shareholder DBL Investors. Soros, Pritzker, and the other prominent investors join Warren Buffet in stepping up their investments in the clean, renewable energy sector.

SolarCity has been especially adept at raising venture and private equity capital. Google and SolarCity, in mid-June, announced the creation of a $280 million fund — the largest of its kind — to finance residential solar energy projects across the country. At the time, SolarCity had created 15 project funds with seven different partners to finance $1.28 billion in solar energy projects.

“Individuals and organizations of all shapes and sizes are fed up with the growing cost and consequences of traditional energy,” stated SolarCity CEO Lyndon Rive in the press release. “This investment provides SolarCity the resources to explore new products and services and identify new geographies and potential acquisitions as we seek to deliver better energy choices to more customers.”

Addressing the typically high up-front costs of individual homeowners purchasing and installing solar energy systems, SolarCity’s business model, whereby it pools and finances residential solar energy projects through leases, is proving particularly attractive to financiers.

“The company’s unique, vertically-integrated model, paired with incentives and falling technology costs, allows it to provide solar electricity to customers at lower rates than they pay for utility power,” commented Silver Lake Kraftwerk co-founder Raj Atluru. “We’ve thoroughly analyzed SolarCity’s full-service approach to solar and energy efficiency and we believe it has the ability to deliver superior customer experience and service across multiple sectors.”


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