SolarCity CEO talks the future of solar power

March 4, 2013, 11:48 AM UTC

FORTUNE — If investors merely went by labels in making buy-sell decisions, SolarCity would have been doomed by its name. Companies involved in solar energy have been toxic on Wall Street of late. The culprit has been cheap solar panels from China that have whacked established manufacturers, like First Solar, and rendered stillborn well funded startups, including Solyndra (now bankrupt) and Miasole (recently sold on the cheap). SolarCity has thrived because it buys solar panels and then installs them for its mostly residential customer base in 14 states. SolarCity markets to consumers from Home Depot stores and recently signed a deal to offer financing for installations to Honda’s U.S. customers.

In the first installment of a print version of his Connected video interview series, Fortune’s Adam Lashinsky discusses SolarCity (SCTY) with its co-founder and CEO, Lyndon Rive. A native of South Africa and serial entrepreneur, Rive founded SolarCity with his brother Peter, who is chief technology officer and head of operations. Their cousin, SpaceX and Tesla Motors CEO Elon Musk, is SolarCity’s chairman.

Rive discussed, among other things, what makes SolarCity different, the future of solar power, and the company’s success so far with Wall Street. (It went public in December.) He also explained his membership on the U.S. National Underwater Hockey Team, a real sport for which he recently traveled to Milwaukee for a competition. A lightly edited transcript of their conversation follows.

Adam Lashinsky: So, in recent years, there’s been something of a taint on companies and investments related to solar, and with SolarCity it’s been just the opposite. You had a successful IPO. The company is doing well, at a high level. Why is that?

Lyndon Rive: You know, most of the taint is around solar manufacturing. Our business model is totally different. We’re an energy company. We install solar systems for free, and we sell the electricity at a lower rate than you can buy it from the utility. So given the option of paying more for dirty power or paying less for clean power, what would you take?

Adam Lashinsky: And from a corporate perspective, you’re a buyer, not a seller of solar panels.

Lyndon Rive: Yes. So actually the pain that solar manufacturing has experienced, that has accrued 100% to our benefit. So it’s reduced our cost and has made it possible for us to provide more homeowners with cheaper electricity.

Adam Lashinsky: Talk a little bit about what the price differential is in the United States between solar power and dirty power. I like your expression.

Lyndon Rive: So, it’s customized by state and actually by utility. But when we do our pricing, we price at roughly 10 to 15% less than the utility price.

Adam Lashinsky: 10 to 15% on average across your service territories.

Lyndon Rive: Exactly right.

Adam Lashinsky: Now, you’re in 14 states in the United States currently. Explain to me how you got to those 14 states versus the rest of the country.

Lyndon Rive: So we first look at the functional economics: What is our current cost of electricity? Then we look at how much sun does that market get, and then we look at any state incentives. The most important is what’s the cost of electricity because that’s our competition. We are competing against the local utility, and so we have to price below their price. So when we look at the markets, that’s what we look at and then we scale, and we only move into the space, into the new market, if we can save the customer money.

Adam Lashinsky: Okay. So it’s not good enough for a state to be sunny, is that correct?

Lyndon Rive: It helps a lot. So, Arizona as an example. The cost of electricity is relatively cheap in Arizona. It’s roughly 12, 13 cents a kilowatt hour. But they get an incredible amount of sun. So the economics still work in Arizona. In California, it still has good sun, but less than Arizona, but the cost of electricity is around 25 cents a kilowatt hour, so we can price below the 25 cents a kilowatt hour.

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Adam Lashinsky: Is there an example of a state that you’re in where you’re doing well where the sun is not particularly good?

Lyndon Rive: So I’d say Oregon is a state where the sun’s not so great. The sun is okay, still better than Germany, and the cost of electricity is fairly low. But Oregon has a strong state incentive and wants to see their residents adopt clean energy, so the economics still work in Oregon.

Adam Lashinsky: You mentioned Germany I assume because the German government has had so many incentives for solar power?

Lyndon Rive: Germany is the largest solar market in the world, and it has been the fastest growing solar market. But it’s not because of their sun. So the government has come up with incentives to help spawn growth and has slowly reduced those incentives.

Adam Lashinsky: So what’s the game plan for the rest of the United States? And also you intend to go international, but you haven’t yet, correct?

Lyndon Rive: Yeah, so absolutely one day we want to go international. But just in the markets that we service today, it’s about half the U.S. population. If you look at the adoption that we’ve had, we have 45,000 customers. 45,000 customers, you can see just with your eye. So we could expand almost infinitely for the next 10 years just in the market that we are in without having saturation. So we’re absolutely interested in international expansion, but the markets that we’re in, it’s a massive market to expand in.

Adam Lashinsky: And you have an interesting business model that entails you going out and arranging financing for the solar panels that you then install on customers’ roofs. Is that correct?

Lyndon Rive: Correct. You know, often people look at us and go, ‘are we a financing company or a solar installation company?’ No, we’re just an energy company. We sell you electricity. Your utility does exactly the same thing. What they do is they build that infrastructure, they go out and arrange financing beyond the infrastructure and then sell you per kilowatt hour. But you don’t think of your utility company as a financing company.

It’s just the phase of business that we’re in right now. In order to sell you electricity, we need to raise the financing. But we’re not the financing company. We just want to sell you cheaper, clean electricity.

Adam Lashinsky: Now, there are some aspects of your business that are quite attractive. You have interesting software that helps your customers be more efficient about their electric use. But at the base of your business, you spend a lot of money installing. You know, someone has to go out and get up on my roof with a ladder to install the panels, and that I would assume is labor intensive and therefore expensive.

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Lyndon Rive: It is labor intensive, and in fact, we’ve hired many people. We’ve hired 1,000 people just last year to help us with deployment. We hire roughly six people a day. So in terms of job growth, we’ve really helped a lot there. We’ve invested a lot in technology to reduce the labor cost, so we have a lot of automated processes to help make us more efficient, and every year we’re going to continue reducing our labor cost.

Adam Lashinsky: An important part of your sales process is through Home Depot. Can you explain that?

Lyndon Rive: Yeah. We have a fantastic relationship with Home Depot. Someone might go to Home Depot to buy dirt, and they’d speak to one of our solar consultants. And the solar consultant explains to the person, “Hey, you can get a solar system for free and pay less for the electricity.” People struggle with that concept. What do you mean? What’s the investment? What’s the payback? No, no, no. It’s free, and you pay less for the electricity.

So someone who went there to — had no concept of wanting to buy cheaper electricity, 15 days later signs up for 20 years of cheap electricity.

Adam Lashinsky: And 20 years — how do — I don’t even know if I’m going to be in my house for 20 years. Why would I want to commit to that?

Lyndon Rive: So, most people won’t be in their house for 20 years. But the product is cheap electricity for 20 years. We actually lock in our energy rates for 20 years. There’s nowhere you can get that. If you had the option and somebody said, “Hey, you can now lock in your rates for 20 years, and then pass on that benefit to the new homeowner, pass it over,” that’s what we offer. So yes, there is a 20-year agreement. But you have a lifetime relationship with your utility anyway. There’s no other option.

Adam Lashinsky: Right.

Lyndon Rive: So when the new homeowner comes in, they look at this as an asset. One home has more expensive dirty power; same home has cheaper cleaner energy. Which one would you want to buy?

Adam Lashinsky: And your consultants at Home Depot, those are SolarCity employees, is that correct?

Lyndon Rive: Yeah. We have little tabletops with SolarCity employees. We help educate the Home Depot customer on cheaper energy.

Adam Lashinsky: And are you paying rent to Home Depot to be there?

Lyndon Rive: No. We pay Home Depot per customer that we sign up.

Adam Lashinsky: Great. So they’re getting a bounty for helping you recruit new customers.

Lyndon Rive: Correct.

Adam Lashinsky: And it’s interesting listening to you position SolarCity against my utility and the utilities of other people watching this. How do the utilities feel about you?

Lyndon Rive: You know, the super majority of them don’t like it. There’s a small minority that actually see this disruptive technology as a fantastic investment opportunity. But for the most part, every dollar that we install, the utility does not get.

And so the utilities position this as a potential cost shift: “Oh, if everybody goes solar, what happens to the rest?” That’s not true. The truth of the matter is the utility makes money in investing into new infrastructure. For every kilowatt that I install, or that the solar industry installs, is a kilowatt less that they need to install.

So it’s preventing their future investment into new infrastructure. And we don’t need to invest into new fossil fuel based infrastructure. We can invest that into renewables.

Adam Lashinsky: Right. So shouldn’t that concern me as a rate-payer in a jurisdiction of a publicly regulated utility, that, you know, if they go out of business might I be left holding the bag?

Lyndon Rive: No. So your rates have gone up for the last 30 years.

Adam Lashinsky: Now you’re speaking generally or about me as a California resident?

Lyndon Rive: For the most part, everybody, but for you as a California resident, absolutely.

And more so than most other utilities. So, your rates have continued to go up. Most of the cost is in transmission and distribution. When solar gets deployed, it’s reducing the transmission and distribution cost.

Adam Lashinsky: Right, because the power doesn’t have to go anywhere. It’s right there in my house where I need it.

Lyndon Rive: Exactly.

Adam Lashinsky: Or it’s on top of my house.

Lyndon Rive: So it’s actually — it’s a net benefit to the rate base. Now, the utility does lose revenue, but it’s reducing their cost. When your business is a guaranteed return on cost and you now have less cost, you make less money. But as a rate payer, you’re actually going to be benefiting from it.

Adam Lashinsky: SolarCity recently released its contracts with customers online for everybody to read. The implication was that you’ve got nothing to hide, but somebody else does. What was the point of that?

Lyndon Rive: So, the primary point is we’ve created a new business concept: selling energy. There are many other companies that are going to follow in our footsteps. We want those companies to use good contracts. Eventually we’re going to get to securitization, we’re going to get to bringing more capital to this market. And the best way to reduce the cost of capital is you have standardization in the contracts. So our contracts have been vetted by many lawyers, many financial investors, so for those companies that are starting, instead of them starting with bad contracts, take our contracts. We’ve already done all the work. We’ve already invested in that. Use it.

Adam Lashinsky: And are there — is there a concern that other companies are using tricky tactics to sign people up?
Lyndon Rive: No. I think it’s just that they don’t know all the rules yet. So we’ve experienced this over the last four years, and they’ve just got to learn — they’d have to learn the hard way, and we’re trying to accelerate that by just making it available to them.

Adam Lashinsky: Tell me about the deal you recently did with Honda.

Lyndon Rive: Very excited about this deal. So this is the first time that Honda’s actually promoting clean energy to their customers. In fact, it’s the first time they’re promoting any non-Honda product to their customers. Honda has an amazing mission to reduce their CO2 footprint. Not just their own CO2 footprint, but educate their customers and help their customers reduce their CO2 footprint. So we’re extremely pleased to be partnering with Honda. They’re going to promote clean energy to their customers.

Adam Lashinsky: And so they’re actually putting capital up to help finance their customers becoming customers of SolarCity, is that correct?

Lyndon Rive: Correct. In fact, we raised a fund together of $65 million.

Adam Lashinsky: It’s curious. So their deal with SolarCity has nothing whatsoever to do with selling cars.

Lyndon Rive: It has nothing to do with [that]. They do have an electric vehicle, so there is some synergy there directly. Because if you change your mobility to all electric, you’re still polluting.

Adam Lashinsky: Right. Because the electricity has to come from someplace, typically coal or —

Lyndon Rive: Coal or natural gas are the two primary. But now if you combine electric vehicles with a solar system, you can live a carbon-free lifestyle without sacrifice. You have an awesome car, and you have cheaper, clean electricity.

Adam Lashinsky: Who approached whom in your Honda deal?

Lyndon Rive: Honda approached us.

Adam Lashinsky: And do you see [SolarCity] doing this with other companies, whether it’s car companies or other kinds of companies, building manufacturers?

Lyndon Rive: Absolutely. Honda’s been a great leader in this space. We need to see large corporations take initiatives in sustainability. It is important, not only for the company itself, but if we fast-forward 10, 20 years, you as a consumer, do you want to buy products from a company who doesn’t care about the environment, or do you want to buy products from a company who cares about the environment?

Adam Lashinsky: Will this be an opportunity to take your service to Japan — working with a Japanese company? Because I assume the Honda deal is for North America.

Lyndon Rive: Yeah. So the Honda deal —

Adam Lashinsky: Explain your service area, your existing territory.

Lyndon Rive: [We have] 14 states that we service today. [For] international expansion, Japan’s a great market. They’ve had a severe catastrophic event that reduced their nuclear facilities, so they need energy. And they’re really thinking of how to deploy this new energy, and solar is a big part of that agenda.

Adam Lashinsky: But you’re not there yet. Why not?

Lyndon Rive: It’s just focus. So today we are growing as fast as we can in the 14 states that we operate in. The benefit and downside about the energy market is that it’s a massive market. We could meet our growth targets for the next 10 years just focusing in California. So international expansion is exciting, but at what point is it too soon, as it may be a distraction for our existing execution.

Adam Lashinsky: Could you meet your growth targets if government incentives went away tomorrow?

Lyndon Rive: If it went away tomorrow, no. So today there is a 30% tax credit that expires — or it doesn’t expire. It goes from 30% down to 10% in 2017.

Adam Lashinsky: That’s a federal tax credit?

Lyndon Rive: Federal tax credit. And then it goes down to 10%, which is the same tax credit that fossil fuel gets. And so then it falls into that category. It’s insane that it has the same tax credit as a polluting fuel source. Beside the point, we have a clear cost reduction map to make sure that by 2017 we can continue to offer cheaper clean electricity without the 30% tax incentive.

Adam Lashinsky: Talking about your costs, it’s been an extraordinary time to be buying solar panels in that the price of solar panels has plummeted over the past few years for a variety of reasons, largely because the Chinese flooded the global market. There are now tariff programs being proposed in various places around the world. At a high level, how will — what is your handicap on those tariffs, and how will that affect panel pricing?

Lyndon Rive: So the tariffs have already affected the panel pricing from Chinese panels into the U.S. So that’s already built into the cost. The cost reduction was a larger number than the tariff itself. So if there wasn’t a tariff, the price would be even lower, but with the tariff it’s a little higher but still lower than it was before. So it’s built into the numbers and it has close to zero effect.

Adam Lashinsky: Close to zero effect.

Lyndon Rive: Yeah.

Adam Lashinsky: And then the other sort of outside variable on your business is interest rates. You’ve had access to very, very inexpensive capital for the entire life of your company. It’s interesting. The company has existed almost totally in a time of financial crisis in the United States. What happens if we get back to a more normal time, including a time with higher interest rates?

Lyndon Rive: So that’s interesting. We haven’t had access to low cost of capital. So the capital that we need is what we call tax equity. You need to find an investor who has a tax appetite to invest into solar systems. Their cost of capital has been between 8 and 12%.

Adam Lashinsky: Excuse me, tax appetite, meaning that they’re looking for the tax credit to help them offset their gains.

Lyndon Rive: Exactly. So you need to sell their tax credit to them. They need to invest in the solar assets. But because there is a supply-demand dynamic, their rates are between 8 and 12%, where you have interest rates at an all-time low. So here’s the crazy thing. In 2008 when we did our first deal, LIBOR was around 4, 4.5%. Our first deal was 7%. So — right now, the asset class is not being priced correctly based on the quality of the asset. It’s being purely priced based on the supply-demand dynamics. We actually see that price coming down even if interest rates go up.

Adam Lashinsky: Why would your investors be confined to this one tax incentivized-base? If it’s a good investment, shouldn’t it be a good investment?

Lyndon Rive: So you do need to monetize the 30% tax credit. So, and the only way to monetize the 30% tax credit is to use that tax credit against your profits.

Adam Lashinsky: I see.

Lyndon Rive: So you have to find a company that has the profits that can use the 30% tax credit.

Adam Lashinsky: I want you to talk a little bit about what I would call upselling. You have the opportunity to sell to your customers other services and about a fifth of them do, is that correct?

Lyndon Rive: Yeah. Actually about half our customers look at doing a full energy evaluation of their home. They pay $300 for that, so they really are interested to see how their home is consuming energy. We don’t view it necessarily as upselling. We view it as what would you want your perfect energy company to do for you. You’d want them to sell you cheap electricity. You want the electricity to be clean. And then you’d want them to look at your house and say where can you consume [less] electricity. That’s the perfect energy company. So that’s why we do energy efficiency. Not only are we going to sell you cheaper electricity, but we’re going to go into your house and help you use less electricity.

Adam Lashinsky: And where do you stand on the subject of smart thermostats, Nest, for example? Do you resell them? Do you suggest them to your customers?

Lyndon Rive: Absolutely. It’s a great way to reduce your energy bill.

Adam Lashinsky: Lyndon, just a little bit about you. I read that you were on the U.S. National Underwater Hockey team, and I confess, that was my first time learning that the U.S. had a National Underwater Hockey team. What is underwater hockey?

Lyndon Rive: Yeah, it’s you and most of the world learned for the first time. It’s a sport that you play underwater, mask, fins, one-handed stick and lead puck. On the bottom of the pool, go down, hold your breath. Before you run out of air, you give the puck to your buddy and go up for air. But there’s a crazy part. So –

Adam Lashinsky: Oh, I’m glad there’s a crazy part to it.

Lyndon Rive: Before SolarCity, I started a company called EverDream. After building the company to 280 employees and raising a fair amount of venture capital, I lost my visa status. Because I didn’t have a degree, I couldn’t get a green card. My wife also plays underwater hockey with me. There’s a category called exceptional ability. She got her green card through underwater hockey and I was able to stay in the country because of underwater hockey. But I wasn’t able to stay in the country for employing 280 people and eventually selling the company to Dell Computers.

Adam Lashinsky: And what’s your visa status today?

Lyndon Rive: I just recently became a citizen — a proud, happy citizen.

Adam Lashinsky: Congratulations. Are you still playing underwater hockey?

Lyndon Rive: I am. We just — I played for the U.S. team at the America’s Cup in August.

Adam Lashinsky: Where was that?

Lyndon Rive: In Milwaukee, of all places.

Adam Lashinsky: You played underwater hockey in Milwaukee. Is this in Lake Michigan or in a swimming pool?

Lyndon Rive: [Laughs] It was in a swimming pool, yeah.

Adam Lashinsky: And last thing. Your cousin, Elon Musk, is the chairman of SolarCity. I assume he was an initial investor in the company?

Lyndon Rive: Yeah. So it was Elon’s initial idea to look at the solar industry. My brother and I then investigated the solar industry and then decided the best way to get into the solar industry is to sell energy, not equipment. And that’s why we started SolarCity.

Adam Lashinsky: So you’re a repeat entrepreneur. Elon is a repeat and multiple entrepreneur. Is there something in the water in your family history that makes you so entrepreneurial?

Lyndon Rive: So, our mothers are twins, and our fathers are born on the same day.

Adam Lashinsky: Oh! Unbelievable.

Lyndon Rive: But I’m not sure if that has anything to do with it.

Adam Lashinsky: [Laughs] So you think there’s just a lot of unusual alignment of the stars in your families.

Lyndon Rive: Yeah. And Elon just has been a great advisor, too.

Adam Lashinsky: How does he apportion his time? How much time does he apportion to SolarCity, given that he also has these little things like SpaceX and Tesla to pay attention to?

Lyndon Rive: So — roughly speaking he gives me about two, maybe three hours a month.

Adam Lashinsky: Three hours a month.

Lyndon Rive: Yeah.

Adam Lashinsky: You’re running the company then with some advice from him.

Lyndon Rive: Myself and my brother.

Adam Lashinsky: Very good. One thing I did want to ask you also about is I read that you qualify as an emerging growth company under the JOBS Act, and so you’ve taken advantage of that in some report requirement ways regarding compensation and accounting standards. Why did you choose to do that?

Lyndon Rive: So, there [are] a couple advantages of the JOBS Act. The first is in just your SEC process and filing for your S1 and going through the public offering. When you do your initial S1, there’s lots of back and forth with the SEC.

Adam Lashinsky: The S1 is the prospectus that you file with regulators before sending it to investors, potential investors.

Lyndon Rive: Exactly. So to first go through that process and have that confidential, it’s a much better system. Then when it’s non-confidential, you release the final version. So we took advantage of that, and I recommend most companies going public to take advantage of that. And then the —

Adam Lashinsky: Excuse me for interrupting you. Is the point that it sort of reduces attention or friction or publicity at a time when you’re trying to iron out minor details?

Lyndon Rive: Exactly. It gets into the weeds that may be reported incorrectly. Plus, anything can happen during that six-to-nine-month period. And the one downside of going public is everything is now public. So your competitors know everything about you. So if you go through that process and you end up not going public, it’s a double-whammy: You didn’t go public and our competitors know everything about you.

Adam Lashinsky: And you’ve taken some reputational damage for having failed to go public.

Lyndon Rive: Exactly. So now you can keep that confidential. Your competitors don’t learn about it. And then when you decide to actually pull the trigger, you are really close to pulling the trigger so then it’s — the road show could be a month way versus you do the initial filing and then the road show is six months away.

Adam Lashinsky: And your point would be that investors aren’t any worse off. They still have plenty of time and the ability to learn whatever they need to learn.

Lyndon Rive: Yeah. No, it makes no difference to the investors.

Adam Lashinsky: And then there was a second point you were going to make.

Lyndon Rive: Okay. And then the other point is just the salary disclosures. You don’t need to disclose everybody’s salary. So the old way forced everyone’s salary to be disclosed. That’s never a good thing when nobody understands everybody’s salary. So that’s why we didn’t disclose it.

Adam Lashinsky: So what was the timing behind your IPO, given that you went public at a time when there were very few other IPOs?

Lyndon Rive: Yeah. So we went public close to the end of the [2012], December 13th, my wife’s birthday. So it was difficult. Investors had little appetite to look at solar companies as they’d been burnt so badly in solar manufacturing. The reason why we decided to push through and punch through that old stigma is that we are a different business. We are an energy company that sells cheaper, cleaner energy. So we decided to take the hit, go out, educate the investors of the uniqueness in the business model, and then over time they would grow with us and get to understand the business a lot better.

Adam Lashinsky: By take the hit, you mean to go public at a lower valuation than you had initially hoped to? That you could have done in a frothier market?

Lyndon Rive: Yes. So on the cover our pricing was roughly — was $13 to $15.

Adam Lashinsky: $13 to $15 per share.

Lyndon Rive: Dollars per share. We ended up going out at $8 per share, closed at $12.50 or around there that same day. And it’s — today it’s around $19, $18. So it had an incredible ride. But we had to take the initial hit to get out, show the market that this is a different business, the growth potential is almost infinite based on the market size, and consumers want cheaper, cleaner energy. So we’ll let investors grow with us and show them how this product really improves the average home’s lifestyle.

Adam Lashinsky: And by the way, on a bottom line perspective, SolarCity is not profitable. You’re making big investments in the business all the time, which I assume is the reason that you’re not profitable. What do you communicate with investors about what your game plan is for profitability?

Lyndon Rive: So, cash flow positive by the end of the year.

Adam Lashinsky: By the end of 2013

Lyndon Rive: End of 2013.

Adam Lashinsky: Now, cash flow positive means that you’re not profitable in an accounting sense —

Lyndon Rive: Yes, so in —

Adam Lashinsky: — but you’re generating cash.

Lyndon Rive: Yeah, exactly. So in our business because we do a 20-year agreement with the customer, we can only recognize the revenue over 20 years. But our operating cost, we have to recognize the full cost on day one

Adam Lashinsky: That makes total sense.

Lyndon Rive: So when you — any company, take one-twentieth of the revenue, keep the cost the same, see if they make a profit. It would be very hard. They would have to have insane gross margins to do that. But that’s not — that’s just a nuance of [generally accepted accounting principles]. In terms of cash, how much cash went out of the business, how much cash came in the business will be cash flow: Our goal is to be cash flow positive by the end of the year.

Adam Lashinsky: And I assume you’ve found that Wall Street investors are willing to have a conversation around cash flow and to ignore net income for that reason.

Lyndon Rive: Exactly. The irony is as soon as we stop growing, our recurring revenue will start catching up to our operating cost, and then we’ll start showing a GAAP P&L profit. In fact, if we have negative growth, we’ll show a GAAP P&L profit in three years. So in a way, as soon as we start seeing positive GAAP profit, it means that we are slowing down in our growth. So for now, we want to grow as much as we possibly can.

Adam Lashinsky: You might be the first company in the history of public companies that net income would be a sign of bad things to come.

Lyndon Rive: At least — eventually, 10 years from now — even with a high growth rate the recurring revenue can eventually catch up, but that’s a long way around.

Adam Lashinsky: You know, it occurs to me you — the company’s called SolarCity. You’re 100% focused on solar energy. But when you talk about the company you talk about it being an energy company, selling energy. Is there a time in the future when solar might not be the sole focus of the company and therefore you’d have to change the name?

Lyndon Rive: You know, we actually wrestled with that before we went public. We said, “Should we change the name? Because solar’s just the product today. If there was another magic product that we could just put in somebody’s house and it created clean energy, we’d absolutely deploy it.” So we wrestled [with] that. And energy efficiency is a big part of the business. We do batteries. We also do electric vehicle charging systems. So we really wrestled with the name. And then we actually had a strong conversation with They actually wrestled with the name many times. Eventually they just said, “Look, is the brand, and we’ll add all the other services around it. People will get to know the other services.” So we settled on SolarCity, and we’ll add the other services. People will get to learn that SolarCity is an energy company that has a lot more than just solar to offer.

But [] is a strong name and people know them. So SolarCity, we’re building our name, and it’s an easy name to remember. Consumers like it, and that’s why we kept it.

Adam Lashinsky: Thank you very much.

Lyndon Rive: Thank you so much.