So you want to work in solar?

To my surprise, I’ve become visible enough in the world of “green business” that students and young professionals  frequently approach me because they want to learn more about sustainability, corporate responsibility or clean energy. Unfortunately, I can’t take the time to speak with all of them, so we typically exchange a couple of emails, and that’s it.

Leo Xiao

Occasionally, though, the student is unusually persistent, which is how I found myself having breakfast this morning at 6:45 a.m. in Laguna Niguel, Ca., with Leo Xiao, a 30-year-old immigrant from China who is studying for an MBA at UCLA. I’m here for FORTUNE’s Brainstorm Green conference, which begins later today, (Monday, April 4) and is available online here.

In any event, Leo Xiao learned that I would be in California for the event. He invited me to speak at UCLA. No thanks, I said. He offered to drive me from LAX to Laguna Niguel so we could talk. That won’t work either, I said. He offered to pay me $200 for a meeting, Absolutely not, I told him. But he was so relentless that I agreed to meet with him if he wanted to drive the 65 miles or so from LA to Laguna very early in the morning, which, not surprisingly, he did.

“Once I decide I want to learn something, I’m pretty committed,” he told me, unnecessarily. “I’m single minded.”

We had a good talk. Leo’s interested in the business of delivering and financing solar energy for homes, and he wanted to dig into issues surrounding the business model, management and risks associated with several start-ups that deliver solar to the home–Sun Run, Solar City and Sungevity. He asked a lot of good questions. It turns out that he’s working on his own iPhone app about solar for the home, but he couldn’t say much about it because he’s in “stealth mode.” Leo has a degree in computer science from UC Riverside, and he spent about a year and a half working at Zynga, the social gaming company the developed Farmville, before business school. He told me, proudly, that Zynga had used its platform to raise money for earthquake victims in Haiti. “Social games can be about more than killing time,” he said. “They can have a social benefit.”

I tell this story for a couple of reasons. First, I want to recognize Leo’s persistence, preparation and desire to learn. Second, I want to say that any immigration policy that makes it hard for people like Leo to work in the U.S. is nuts. He’s been educated here and would like to stay–“I love Silicon Valley,” he told me–and surely his brains and energy will add value to our economy. Free labor markets, like free trade, generate wealth and growth.

Solar City: making solar easy

“Install solar. Save money from day one. No upfront investment. And you have a predictable forecast of what your power costs will be for the next 20 years.”

That’s the selling proposition that Solar City, a Foster City, CA-based startup, offers homeowners, businesses and government interested in installing solar photovoltaic panels. It’s working. Big companies like eBay and Walmart, as well as nearly 10,000 homeowners have opted to buy or lease from Solar City, which will provide design, financing, installation and monitoring of solar systems. It’s one-stop shopping for what otherwise could be a complicated business.

Lyndon Rive

Solar City is led by Lyndon Rive, 33, who is the CEO, and his brother Peter Rive, 36, who is chief operating officer. They started the company in 2006 and it’s their second startup; the first, Everdream, a software company, was acquired by Dell. Most likely, neither company would have gotten going were it not for Lyndon’s passion for underwater hockey. More about that in a moment.

I met with Lyndon Rive last week at the Solar Power International conference in L.A.  Solar City is one of several companies offering leases of solar equipment; the others include SunRun (See Will rooftop solar go mainstream?) and Sungevity ((See Solar power to the people). All are based in northern California, and for good reason. Lyndon told me that more than half of the estimated 80,000 homes with rooftop solar in the country are located in the area served by PG&E Corp., a solar-friendly utility company. How friendly to solar is the big utility? PG&E has invested in both SunRun and Solar City.

Lyndon says that Solar City does not view SunRun or Sungevity as big competitors. If anything, more solar on roofs, no matter who installs it, should drive the category. “Our primary competitor is the homeowner doing nothing,” he said. “The market is not saturated.” That’s an understatement, given that so few homes have installed solar rooftops.

Why not? Lots of reasons. The upfront costs of installing solar panels are high–about $30,000, on average. Most people have no idea how to shop for panels. Who would they hire to install them? What happens if they break? Or on cloudy days?

Those barriers to adoption were the focus when Lyndon and Peter Rive started Solar City. They’d left the software firm and investigated renewable energy. “Solar is a market that can really scale,” Lyndon says. Other companies were doing manufacturing or researching new technologies, but no one, at that time, was focusing on how the product would be delivered on a big scale. Their goal was to build the first national consumer-focused solar brand.

I asked Lyndon whether there were any models for brand that provides services for the home. Not really, he admitted. (The closest we could come up with were DirectTV, and Terminix and TruGreen, which are units of ServiceMaster.) Undeterred, they set out to make rooftop solar as easy as possible.

So far, Solar City currently operates in five states: California, Colorado, Arizona, Oregon and Texas. The states are chosen because they have generous state subsidies, or plenty of sun, or high utility bills–ideally all of the above. Under the right circumstances,  Solar City customers who lease their panels pay little or nothing upfront and immediately begin saving 10 to 15% on their utility bills. About 20% of customers choose to buy their panels.

Two recent announcements put a spotlight on Solar City. The company said last month that it had won a contract to supply thin-film solar panels to 20 to 30 Walmart stores in California and Arizona. Last week, Solar City said it will lease energy efficiency products and services to homeowners along with solar; that’s an excellent idea because it will further lower the costs of using solar power. One of the company’s key advantages is its software, which enables customers to estimate the costs of solar, and now energy efficiency improvements, on Solar City’s website.

Solar City has raised about $101 million in venture capital from such investors as Draper Fisher Jurvetson, Mayfield, DBL Investors (which stands for double bottom line) and Generation Investment Management, the firm started by Al Gore and ex-Goldman exec David Blood. The company has said it may go public by 2013.

As for underwater hockey…well, I’d never heard of it either. It’s played in a pool two meters deep, with six players on a team, slapping around a heavy puck (1.5 kilograms) as they can hold their breath and stay underwater. Why do it? “I love water,” Lyndon said. In any event, he did it well enough to be named to the South African national team, which brought him to the world championships in San Jose in 1998. There he joined with his brother in the software business–and never left.

(Solar) power to the people

Some things have changed since Danny Kennedy left Greenpeace to become president of Sungevity, a startup company that sells rooftop solar power to homeowners.

Others have not.

DannyKennedy now talks easily about ROI and IRR – that’s return on investment and internal rate of return, for the corporate-impaired – and he says tbuying solar panels for the roof of your home, if you live in a state with favorable subsidies, is a “very good, long-term, high-performing investment.” In other words, he’s learned to be a salesman.

But he’s still an activist at heart. We had lunch this week in Washington, where Kennedy joined more than 100 business leaders  who are part of a clean-energy coalition to push the U.S. Senate to pass climate legislation. “What drives me now,” he says,  “is the same thing that drove me at Greenpeace—the desire to solve the climate change problem with low-carbon energy and create jobs and wealth along the way.”

Danny, who is 38, launched Sungevity on Earth Day, 2008, at FORTUNE’s Brainstorm Green conference. His co-founders are the company’s CEO, Andrew Birch, who had worked at BP Solar and board chairman Alec [click to continue…]