SolarCity Corp (NASDAQ:SCTY) is apparently hitting retail investors for money. Last week the company said it planned to sell securities straight to people and others who may be interested in making an investment in its solar systems.
SolarCity looks to expand
The plan is yet another way for the company to finance the cost of solar panel installations. Meanwhile, retail investors wanting better return rates than what government bonds and savings accounts offer can find the better rates they are looking for. Standard systems installed on the roof of a residential home cost around $25,000.
According to Delaware Online, SolarCity Corp (NASDAQ:SCTY)’s securities will probably work in a way that’s similar to how certificates of deposit or bonds work. However, they won’t be backed by SolarCity itself. They’ll be backed by the contracts the company has with rooftop solar customers—which reaches into the thousands at least.
SolarCity wants to raise billions
Lyndon Rive, CEO of SolarCity Corp (NASDAQ:SCTY), said they’ll be offering a number of different kinds of investment products which could be owned by investors for various lengths of time or trade if they want to do so. Eventually, he believes they will raise billions of dollars through these investment products. Rive said people are always asking when they will be expanding into their area, and he also said that those who want to get in on the solar industry can still take part by investing in SolarCity—even if the company has not expanded into their area yet.
The solar panel maker acquired Common Assets LLC, a financial technology company, to form the investment platform which is required to offer these securities. Rive said the exact details about the financial products they will be creating and also the risks associated with investing in those financial products will likely be released sometime in the first half of this year. Specific details on how the investments would be structured were not provided.