South Africa native Lyndon Rive runs SolarCity, one of the largest solar installers working in Massachusetts. He recently spoke with Globe reporter Erin Ailworth about his entrepreneurial roots, why he thinks solar is the best form of alternative energy, and why he’s not concerned about the recent failures of high-profile solar companies.
PayPal founder Elon Musk is your cousin. You and your brother Russell sold your software firm Everdream to Dell in 2007. Clearly there’s an entrepreneurial streak in your bloodline. How did you get started?
So I started my first company at 17 — my last year of high school. I never went to university after that, I just continued running the business. When I was 22, I started the software business in the Bay Area, and then, when I was 30, I started SolarCity [with other brother, ].
Today SolarCity has more than 50,000 customers, including 1,000 in Massachusetts — Boston Mayor Thomas M. Menino among them. How many people does it take to run the business?
We’re now over 3,000 employees scattered over the 14 states. In Massachusetts, we have 80 employees.
So why solar?
The solar industry has incredible potential. The challenge was everybody, in our opinion, was selling it wrong. The whole market was focused on selling solar equipment and we felt that in order to get mass adoption, you mustn’t sell equipment, you must sell electricity. Our primary business was getting to install solar systems for free and sell electricity at a lower rate than you can buy it from the utility.
Most customers see about a 10 to 15 percent savings off their electricity.
There are thousands of solar companies in the United States today. What differentiates SolarCity?
We do all the services ourselves. We do the work, we finance the system, we own the equipment. So when you are the company who is doing the installation and owning the equipment you want to make sure you did it at the highest level of quality. It’s our problem for the next 30 years so we’ve got to make sure that we do it [right].
What do you think of the high-profile failures, such as the now-bankrupt panel makers Solyndra and Evergreen Solar?
Most of the companies that have struggled are in the technology or manufacturing sector. What’s key to understand is the jobs aren’t in manufacturing. The jobs are in delivery. A 100 megawatt manufacturing facility will employ roughly 100 people. It takes a lot [more] people to install 100 megawatts.
Like all industries starting to get momentum and grow, there will be many that enter and a few that will come out being very big, successful companies. You’ll have companies [that] go out of business. Now, them going out of business is not bad for the industry. It’s showing that they couldn’t keep up with the innovation and the cost reduction.
How does government backing of the industry fit into solar’s continued growth? Is it necessary?
The part that we should never forget is that the largest polluter in the country — air polluter . . . — is the utility industry. It’s even larger than transportation. So when people say how does the world look without incentives, I say the world would look fine as long as those who are polluting are paying for their pollution.
We need this equal playing field [with solar incentives]. Because we can’t penalize those who do bad things, we [should] give a carrot to those who do good things.
You’ve been insistent that Governor Deval Patrick receive a shoutout. Why?
He’s really helped bring clean energy to market. I applaud any political leader who realizes that a lifestyle with fossil fuels is bad. Some people don’t see that. They’re fixated on the lowest variable cost — it’s cheaper to burn coal, let’s continue.
It may be cheaper on your utility bill, but it’s not cheaper for you as a taxpayer. You’re paying for all the health issues, you’re paying for these massive storms that we’ve seen, and this is just the start.Erin Ailworth can be reached at email@example.com. Follow her on Twitter @ailworth.
Correction: Because of an editing error, an earlier version of this article misidentified the brother with whom Lyndon Rive founded the company SolarCity. It was Rive’s brother Peter.