Aug 21 (Reuters) - Widely followed hedge fund shortseller Jim Chanos, founder of Kynikos Associates, says he is betting shares in SolarCity Corp will drop on the basis the American provider of energy services is a "subprime financing company."

Chanos told CNBC on Friday: "The problem with SolarCity relative to some of the plays like SunEdison and industrial and commercial plays is that it is a residential model.

"You basically lease the panels from SolarCity and they collect the lease payments. So in effect, if you put on the panels, you have a second mortgage on your home. You hope it's an asset but in many cases, it turns into a liability."

Shares of SolarCity were down 11.22 percent but not before dropping as over 13 percent in mid-day trading.

(Reporting By Jennifer Ablan)