UPDATE 1-SolarCity IPO expected in third quarter-source
(Adds background on company)
LOS ANGELES, Feb 2 (Reuters) - Solar power company SolarCity is expected to debut on U.S. markets in the third quarter this year and has hired Goldman Sachs (GS.N) to underwrite its initial public offering, a source close to the company said on Thursday.
The San Mateo, California-based startup will file its IPO plans with the U.S. Securities and Exchange Commission "within a few weeks," the source said. The deal is expected to value the company at around $1.5 billion.
Spokesmen for both SolarCity and Goldman would not comment.
A market debut by SolarCity could help revive what has become a dismal market for clean technology offerings.
Closely watched energy startups including solar thermal power plant builder BrightSource Energy Inc and power grid networking company Silver Spring Networks filed to go public last year but have been waiting for market conditions to improve to set dates for their debuts.
SolarCity was founded in 2006 by brothers Lyndon and Peter Rive -- the first cousins of Tesla Motors (TSLA.O) CEO and PayPal co-founder Elon Musk, who serves as SolarCity's chairman.
The company has rapidly grown to become the top U.S. installer of residential solar systems, with 14 percent of the market in the first three months of 2011, according to GTM Research.
SolarCity has benefited from a solar leasing business model that allows homeowners to install ordinarily pricey solar panels on their rooftops with no money down. Instead, homeowners make monthly payments for the power they use and the system is owned by a third party.
Google Inc (GOOG.O), for instance, last year said it would finance $280 million of SolarCity's residential systems [ID:nN14194125].
The solar leasing model has been adopted by many installers in recent years, and SolarCity's competitors include fellow startups SunRun and Sungevity, among otherA s.
SolarCity made headlines last year when failed to win a U.S. loan guarantee for an ambitious project to install solar panels on military housing. The project was saved, however, when Bank of America Merrill Lynch agreed to finance the debt portion of the more than $1 billion in solar installations [ID:nN1E7AS0P4].
SolarCity's plan to file for an IPO shortly was first reported by Bloomberg on Wednesday.
(Reporting By Nichola Groom; editing by John Wallace, Bernard Orr)
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