SolarCity to Offer Direct Securities Investments

Would you like to bet on rooftop solar's future?

Solar panel installer SolarCity is turning to retail investors for cash. The company said Wednesday that it plans to sell securities directly to individuals and others interested in investing in its rooftop solar systems.

The move is a novel way for the San Mateo company to finance the enormous cost of installing panels on thousands of roofs—a typical residential system costs $25,000—while appealing to retail investors who are on the hunt for better rates of return than they can find in savings accounts and government bonds.

The securities will likely be similar to bonds or certificates of deposit. But instead of being backed by SolarCity, they would be backed by hundreds or thousands of contracts with rooftop solar customers. Wall Street has long created such products, called securitizations, which bundle assets such as mortgages or other loans into securities that can then be bought and sold.