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Article from SFGate.

Two weeks ago, solar power plant company BrightSource Energy abruptly canceled plans for an initial public stock offering, convinced that investors currently have little appetite for new solar shares.

Now SolarCity Corp. will test that theory.

SolarCity on Monday reported plans for its own IPO. The San Mateo company, best known for leasing rooftop solar systems to homeowners and businesses, filed a confidential draft registration statement with the U.S. Securities and Exchange Commission last week.

SolarCity’s brief statement announcing its IPO did not specify a price range for the stock or say when trading might commence.

The company was founded in 2006 by brothers Lyndon and Peter Rive. Their cousin – Tesla Motors CEO Elon Musk – chairs the company’s board.

SolarCity had been widely expected to go public this year. The popularity of residential solar leases, which allow homeowners to install solar panels without paying the up-front cost, has grown quickly. SolarCity and San Francisco’s SunRun Inc. have emerged as the field’s dominant players.

Ugly year for stocks

But SolarCity could face headwinds on Wall Street.

Solar stocks have endured an ugly year, falling even before the highly public bankruptcy of Fremont’s Solyndra. All have been hammered by a worldwide plunge in solar cell prices, the result of new factories in China flooding the market. A Bloomberg index of major solar stocks – including First Solar Inc. and SunPower Corp. – lost 67 percent of its value in the last 12 months.

So burned have investors been that they may look askance at solar companies that have nothing to do with making cells.

BrightSource, based in Oakland, called off its IPO on April 11, just hours before trading was scheduled to start. The company’s large solar power plants don’t use photovoltaic cells. Instead, they use fields of mirrors to concentrate sunlight and generate heat.

And yet, as BrightSource executives spoke with potential investors in the weeks before the planned IPO, the investors were skittish. It didn’t help that solar stocks, which had shown some improvement in January and February, tanked during the road show, said BrightSource CEO John Woolard.

“The feedback we were getting from investors was, ‘In the solar space in particular, it’s been a bad place for us to be, recently,’ ” Woolard said last week.

He felt fortunate that BrightSource didn’t absolutely need to move forward with its stock sale. The company’s board unanimously voted to cancel the IPO rather than postpone it.

“You can always get a deal done,” Woolard said. “The questions are: at what price? Is there after-market support? Is it going to be a good outcome or not? Is it a deal you want?”

The fall in solar cell prices that has gutted so many solar stocks has, in fact, helped SolarCity.

Although they receive less public attention than struggling solar manufacturers, the companies that develop or install photovoltaic solar systems have benefited from tumbling prices, which make their systems more affordable. That could work in SolarCity’s favor when the company’s shares start trading.

Deal with military

“It’s not a good time for solar manufacturing, but it’s a great time for other parts of the solar industry,” said Ron Pernick, managing director of the Clean Edge Inc. market research firm. “This is one of the areas where we’re seeing a lot of deployment and growth, and it’s quite robust.”

Some large, institutional investors are already quite familiar with SolarCity.

Both Bank of America Merrill Lynch and U.S. Bankcorp. are financing a $1 billion SolarCity project to place solar panels on military housing across the country. The U.S. Department of Energy had initially agreed to back the effort with a loan guarantee of $275 million, under the same federal program that gave Solyndra $528 million to build a factory in Fremont. But the loan program expired before the department and SolarCity could agree on terms.

Those banks understand SolarCity’s business and know that the company doesn’t share the problems plaguing manufacturers, Pernick said.

“I think savvy investors will understand the difference,” he said. “Whether the general public does, we’ll have to see.”

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Here is an interesting article on Cleantech/ Greentech IPO´s from Earth2Tech.

“Electric car maker Tesla Motors officially delivered the biggest venture backed IPO of the quarter, raising $226 million, according to numbers out this week from the National Venture Capital Association and Thomson Reuters. What made the public debut different from some of the other venture-backed IPOs that happened this quarter? Well, among a variety of things, last summer Tesla managed to score a coveted $465 million in loans from the Department of Energy.

The link with Uncle Sam likely helped allay investors fears over supporting a risky company that has yet to make a profit and doesn’t plan on making any profits for the next two years. Tesla isn’t the only greentech IPO hopeful backed by the government. In fact, a large number of the greentech companies that have been gunning for the public market, or have recently gone public, have significant government support.

Take lithium ion battery maker A123Systems. The venture-backed company raised $371 million in its public debut in 2009, which was the largest IPO of the year, and represented about a third of the overall IPO market that year in terms of dollars raised. A123 secured a sizable $249 million grant from the Department of Energy last summer.

Before Tesla, the venture-backed greentech IPO hopeful of the hour was solar panel maker Solyndra, which hosted a speech by President Obama in May. Last year the company won a whopping $535 million loan guarantee from the U.S. Department of Energy, and that loan guarantee translated into a loan from the U.S. Treasury. However, despite the government support, investors’ appetites for solar, and Solyndra’s, IPO just wasn’t there and Solyndra ended up ditching its IPO plans last month, in lieu of raising funding from its current investors.

This week, shortly after Tesla’s IPO, an investor behind another venture-backed and government-supported electric car maker suggested it will also one day go public. That would be Fisker Automotive, and Ray Lane, the Kleiner Perkins venture capitalist and former Oracle executive, said this week that “Certainly we would plan to sell shares in the public market once the Karma is on the road and we have visibility into the revenue plan.” In April Fisker closed a $528.7 million loan agreement that will be used to help the startup launch its luxury plug-in hybrid model and set up manufacturing in Delaware for a line of lower-cost plug-in hybrids.

Smart grid company Silver Spring Networks, which has been planning an IPO for the last six months, might not have direct government support, but the close to $4 billion in funds for smart grid projects from the U.S. stimulus package has been a major boon to its utility customers. The Silver Spring folks told me in an email last year that the funding “will go a long way toward accelerating and broadening deployment of the critical smart grid infrastructure.” Silver Spring is working with stimulus award winners Florida Power & Light, Oklahoma Gas and Electric, Sacramento Municipal Utility District, PHI Holdings (including PEPCO, Atlantic City and PEPCO DC) and Modesto Irrigation District.

Other rumored greentech IPO hopefuls (here’s Earth2Tech’s 10 Greentech IPO Picks) that have some sort of government support include solar thermal developer BrightSource Energy and Smith Electric Vehicles. BrightSource received a commitment earlier this year from the Department of Energy for a $1.37 billion loan guarantee to build out BrightSource’s Ivanpah solar project, which is set to be the first new solar thermal power plant built in California’s deserts in 20 years. Smith Electric Vehicles won a $10 million DOE battery grant last summer, and added $22 million under the same program in March.

Of course, not all of the greentech IPO candidates are under the wing of the U.S. government. Biofuel developer Amyris is planning a $100 million IPO without direct government support. But the odds are if you see a greentech startup hit the Nasdaq it’s got Uncle Sam in its corner.

The reality says a couple things about the greentech industry and the IPO market in general. First the IPO market for venture-backed startups is actually relatively weak right now. A significant amount of companies have actually pulled their IPOs in recent weeks and that extra bit of confidence via government support can help push these plans onto the public markets (Solyndra as the exception).

Another issue is that many of the government loans, grants and loan guarantees given to these greentech startups come attached with a cost-sharing requirement over a certain time frame. To unlock the full extent of the government funding companies like Tesla and Solyndra have to raise their own matching funding, by a certain date, and many are turning to the public markets for that.”

Read the whole article here.

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I think that we last week saw a start of a new boom, A123 soured on the IPO, and many candidates are waiting in line. Here is piece on the issue from Reuters.

“SAN FRANCISCO, Sept 24 (Reuters) – A 50 percent leap in the shares of lithium-ion battery maker A123 Systems Inc (AONE.O) on their first day of trading looks likely to jumpstart the market for clean-tech share offerings.

The Watertown, Mass.-based A123 Systems is now worth over $1.9 billion, a striking valuation for a company that has yet to make a profit and still needs large-scale commercialization.

Industry executives and experts said A123’s success shows investors have an appetite for green technology companies that lose money, but have tremendous potential.

So the stock’s first day jump, which is the second-best performance for a debut stock in 2009, should encourage more venture capital-backed clean technology companies to go public, they added.

“This is an interesting time for the market because there are several (clean-tech) companies that have been growing very nicely,” said Faysal Sohail, managing director of venture fund CMEA Capital, which is an investor in A123.

Sohail declined to comment specifically on A123, but said the whole environment is creating opportunities for clean-tech companies and expects 2010 to be a busy year for green IPOs.

“They are real companies with substantial revenue and growing at a very fast clip,” he said.

CMEA Capital also backs companies such as Silicon Valley solar manufacturer Solyndra and biofuel company Codexis, which many see as likely candidates for the IPO market.

Other green companies deemed ripe for an IPO include smart grid network company Silver Spring Networks, electric carmaker Tesla Motors and solar thermal company BrightSource Energy.”

Read the full article here.

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