#SolarCity (SCTY) installs solar photovoltaic systems in homes,
businesses and
government buildings. I
recently purchased shares in this company so I’m not unbiased, but the story is
still interesting. Here’s their company website.
The company was founded in 2006 by Elon Musk, yes the same
man who started a company that later became PayPal. When PayPal was sold to eBay for $1.5 billion
in 2002, Musk owned 11.7% of the company.
He’s rolled that wealth into other ventures like Tesla Motors, SpaceX
and SolarCity.
Renewable energy systems have always suffered on the
economic front from the high upfront cost of installation. SolarCity financing changed that by allowing
customers to lease their system with no money down. SolarCity owns and maintains the system; the
business or homeowner pays for the energy they use, frequently at a lower rate
than their currently utility bill.
On October 11th, while announcing their earnings,
SolarCity said they installed 78 MW during the 3rd quarter of
2013. This is up from the previously
estimated 72 MW for this period. Guidance
for the full year continued at 278 MW.
However, the real news in that announcement was the guidance
for 2014. SolarCity now anticipates
installing between 475 MW and 525 MW of capacity in 2014 – a 70-90% increase
over 2013. No surprise – the stock
jumped over 20% in trading that day.
Now this doesn’t mean the future is unbelievably bright for
SolarCity. They will face changes to the
federal investment tax credits in 2016, continuing challenges in financing the
installations they’re making and ongoing competition from others in the industry. They will also face the view of some that
they may be a good company, but the price run up has made them a bad investment
right now.
But isn’t it great, after all this time, to be realistically
talking about solar electric playing a key role in our nation’s energy mix?
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