SolarCity Corp (NASDAQ:SCTY) introduced a new solar energy service today that will make it possible for many small and medium-sized businesses (SMBs) to pay less for solar electricity than they pay for power from their local utility for the first time.SolarCity will initially offer its SMB service to owner-occupied business locations in California, but expects to expand it to the east coast and other territories in early 2016. Based on an analysis of SMBs in California, SolarCity expects to make it possible for many to pay between 5 – 25 percent less for solar electricity than they pay for utility power with no upfront cost, depending on their own utility costs and usage. The service will also include fixed, flat solar payments for 20 years, so if the utility rates increase in the future, customers can save even more.
There are more than 28 million small and medium-sized businesses in the U.S.1–more than 99 percent of American businesses are SMBs—and very few have been able to use solar power affordably until now. SolarCity has achieved a solar cost breakthrough for SMBs by combining three innovations that leverage its unique experience in high-volume installation, technology development and structured finance:
- Installation – While most commercial solar developers subcontract installation, which lengthens installation time and significantly increases cost,SolarCity leverages its vast network of local installation crews to install projects for SMBs at a lower cost than any other provider in the category.SolarCity expects to reduce the cost to install small commercial solar projects by more than 30 percent by using its own crews and technology.
- Technology – SolarCity’s proprietary, lightweight solar panel mounting system–ZS Peak–allows SMBs to fit 20 to 50 percent more solar panels on each roof surface. ZS Peak also allows workers to install panels significantly faster than would otherwise be possible to reduce installation costs even further, and simultaneously increases solar energy production from each project.
- Financing – Solar projects for small and medium sized businesses have traditionally been very difficult to finance because SMBs do not have the formal investment grade credit ratings of large corporations, and also have no commercial equivalent to the FICO scores that are often the basis of consumer financing. SolarCity has teamed with Renew Financial to create a unique financing option for SMBs that combines low costSolarCity structured financing with Property Assessed Clean Energy (PACE). The first rollout will be under the CaliforniaFIRST program. Under this offering, an SMB signs a standard commercial solar lease with SolarCity, SolarCity finances the upfront cost much as it would under a traditional solar lease or power purchase agreement, and in turn the PACE program allows the business to pay the solar payment on its property tax bill. Just as it does for other commercial customers under a lease or PPA, SolarCity coordinates solar financing and also handles installation, monitoring and maintenance for SMBs.
For the SMB market, SolarCity will initially design solar energy system sizes between 30 – 500 kilowatts of generation capacity to businesses that own buildings with approximately 5,000 – 50,000 square feet of available flat roof space. (Original Source)
Shares of SolarCity closed yesterday at $54.69. SCTY has a 1-year high of $79.40 and a 1-year low of $45.91. The stock’s 50-day moving average is $54.72 and its 200-day moving average is $54.83.
On the ratings front, SolarCity has been the subject of a number of recent research reports. In a report issued on July 24, Robert W. Baird analyst Ben Kallo upgraded SCTY to Buy, with a price target of $71, which represents a potential upside of 29.8% from where the stock is currently trading. Separately, on July 20, Deutsche Bank’s Vishal Shah reiterated a Buy rating on the stock .
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Ben Kallo and Vishal Shah have a total average return of 9.4% and -13.7% respectively. Kallo has a success rate of 50.7% and is ranked #665 out of 3717 analysts, while Shah has a success rate of 24.4% and is ranked #3685.
Overall, one research analyst has assigned a Hold rating and 5 research analysts have given a Buy rating to the stock. When considering if perhaps the stock is under or overvalued, the average price target is $81.75 which is 49.5% above where the stock closed yesterday.
SolarCity Corp is engaged in designing, sale, engineering, installation, monitoring, maintenance and financing of solar energy systems to residential and commercial customers.