Rive ignored their warnings—out of naïveté, he says now, but also out of a stubborn confidence that he’s displayed since childhood. Son of a chiropractor father and a mother who taught massage and reflexology, Rive’s business career began at age 12, when he began teaching ballroom dance lessons to adults four times his age. He started his first company at 17, selling homeopathic remedies for arthritis, constipation, and other maladies. He adopted a network-marketing model, enlisting his mother’s clients and their friends as salespeople. The money flowed in—up to $20,000 a month. Soon Rive was spending so much time on his business that the principal of his public high school threatened him with expulsion.
Rive had never been good at schoolwork anyway—he’s dyslexic—and he was already making more money than he could ever expect to in an entry-level job out of college. Instead, he sold his natural-remedies business and moved to the U.S. There he co-founded Everdream with his brother Russell, who had expertise in the information-technology business. By the time Rive took that trip to Burning Man, Everdream was starting to attract attention from the likes of IBM, WebEx, and Dell. Rive left in 2006, and Dell bought the company in 2007 for an undisclosed sum.
With the help of a big investment from Musk, Rive founded SolarCity in 2006 with another brother, Peter. Again, Peter provided the technical expertise, while Rive brought the vision. Rive saw that people felt uncomfortable putting down thousands of dollars on new equipment for a service they were already receiving, so he adopted a model mirroring that of the existing utilities. SolarCity wouldn’t sell solar panels—it would install them on people’s roofs for free, then sell them the resulting power at a monthly rate competitive with the one they were getting from their energy company. Over the years, it has added other financing options, including lease arrangements similar to those offered by car companies. In many cases—especially in states like California, where sunlight is copious and power rates exorbitant—customers end up paying less per month than they were without the solar power.
In recent years, a slew of other startups have adopted similar zero-down financing models, including SunRun, Sungevity, and SunPower. But SolarCity has the largest market share at 26 percent, and claims to have achieved economies of scale by hiring its own employees to install and maintain the panels. The downside for SolarCity is that it requires a lot of capital to grow. The upside is that it can build a full-service brand that people recognize and trust, like Apple with hardware and software—or Tesla, which has bucked auto-industry trends by both building cars and selling them directly to consumers.
When SolarCity went public in December 2012, investors were divided on its prospects. Its growth was phenomenal, they agreed, and the residential energy market is vast, but thus far it had reinvested all of its revenues to continue growing and hiring. Since its IPO, however, the SolarCity bulls have trampled the bears, sending its stock ballooning from an opening price of $8 a share to more than $60 as of Nov. 14. When I first talked to Rive in June, he told me the company was hiring 10 people a day. It probably hired at least one just in the time it took me to finish my coffee.
There are billions to be made in the U.S. solar power industry if it keeps growing at its present rate of nearly 40 percent per year. When I asked Rive how big he thought SolarCity could ultimately become—in his wildest dreams—he didn’t hesitate. “I think it could be the largest electric-energy company in the United States,” he said.
If somehow the bottom falls out—if customers sour on the financing plans or default on their payments, if some of the panels prove defective, if a big shift in energy prices leaves solar looking as unaffordable as it did a decade ago—Rive and SolarCity could lose everything. Rive doesn’t see that happening, of course. But he insists—even more vehemently than most in Silicon Valley—that he’s not in business for the money anyway. “If I wanted money, I would have cashed out a long time ago,” Rive says. “What’s important is the mission.”
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