Top Ten Solar

3. SolarCity

Making solar energy affordable takes more than low-cost manufacturing. It also requires a retailer who can expand its service network quickly. SolarCity has been able to do just that. The Foster City, Calif.-based private company serves California, Arizona and Oregon and claims to be one of the largest in the country. It says it certainly has served more customers than other companies, based on data from the California Solar Initiative, the state rebate program for customers of three largest investor-owned utilities.

The company began offering a leasing program a year ago to make solar energy more affordable to consumers (see SolarCity Sees Sales Spike). The company won the backing of First Solar, which has invested $25 million in the company and is supplying SolarCity with its low-cost solar panels. Having Tempe, Ariz.-based First Solar as a reliable source of cheap panels gives SolarCity an edge over competitors, many of whom believe First Solar's panels aren't suitable for residential rooftops. The cadmium-telluride panels convert sunlight into electricity at a lower rate than conventional, crystalline silicon panels, but crystalline silicon panels tend to be more expensive.

The solar installation market is very young and full of startup companies that opened shop only in the last few years. An increasing number of them are partnering or merging their businesses so that they can offer cheaper services and over more territories. GroSolar and Alteris Renewables recently signed up with San Francisco-based SunRun to offer financing plans and installations to homeowners in Massachusetts. Earlier this year, GroSolar, in White River Junction, Vt., bought Borrego Solar Systems' residential business, which operates in California and Massachusetts. All these alliances and acquisitions mean SolarCity is facing equally ambitious competitors. SolarCity plans to expand to the East Coast later this year or early next year.