Following the decision by Governor Brian Sandoval’s Public Utilities Commission (PUC) to terminate Nevada’s rooftop solar industry just days before Christmas, SolarCity Corp (NASDAQ:SCTY) announced that it has been forced to eliminate more than 550 jobs in the state. Where possible, the company will relocate affected employees to business-friendly states.
The PUC’s decision to change the rules to punish existing solar customers after the state encouraged them to go solar with rebates is particularly callous and leaves Nevadans to question whether the state would ever place the financial security of regular citizens above the financial interests of NV Energy.
“I contacted Governor Sandoval multiple times after the ruling because I am convinced that he and the PUC didn’t fully understand the consequences of this decision, not only on the thousands of local jobs distributed solar has created, but on the 17,000 Nevadans that installed solar with the state’s encouragement,” said Lyndon Rive, SolarCity’s CEO. “I’m still waiting to speak to the Governor but I am convinced that once he and the Commissioners understand the real impact, that they will do the right thing.”
SolarCity announced on December 23 that as a result of the PUC decision, it had to cease solar sales and installation in the state effective immediately. Other Nevada solar companies with higher cost structures than SolarCity are expected to collectively lay off thousands of additional Nevadans in the coming months.
“Telling employees they can no longer work for SolarCity is the hardest thing we’ve ever done,” continued Rive. “These are hard-working Nevadans and a single government action has put them out of work. This is not how government is supposed to work.”
SolarCity has also closed a training center in West Las Vegas that it opened a little over a month ago. The November press release announcing its opening contained this statement from Governor Sandoval: “I’m proud to celebrate the opening of SolarCity’s new training center, which will makeNevada the regional hub for training workers in the jobs of the 21st century. Our homegrown solar industry has already created over 6,000 goodNevada jobs, and has tremendous potential to continue driving innovation, economic diversification, and opportunity in the Silver State.”
Fortunately, there are other voices speaking up for solar employees and customers. The Nevada Bureau of Consumer Protection is attempting to protect Nevadans by filing a motion to halt implementation of the PUC’s ruling, stating that the order’s impact “is not consistent with the Governor’s stated objectives of SB 374 or the Governor’s initiatives and focus to increase jobs and employment for Nevada residents.”
Just weeks after Congress voted with bipartisan support to extend the federal tax credit for solar, Governor Sandoval’s Commission is moving the state backwards. The Governor’s and Commission’s support for a de facto ban on rooftop solar defies public opinion, including the opinion of the members of his own party. According to a recent poll by Moore Information, 73% of registered Nevada Republicans support the state’s previous rooftop solar rules.(Original Source)
Shares of SolarCity closed yesterday at $50.44, down $2.35 or -4.45%. SCTY has a 1-year high of $63.79 and a 1-year low of $24.07. The stock’s 50-day moving average is $40.60 and its 200-day moving average is $45.22.
On the ratings front, SolarCity has been the subject of a number of recent research reports. In a report issued on December 30, Avondale analyst Michael Morosi maintained a Buy rating on SCTY, with a price target of $65, which represents a potential upside of 28.9% from where the stock is currently trading. Separately, on December 17, Canaccord Genuity’s Jonathan Dorsheimer maintained a Buy rating on the stock and has a price target of $48.
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Michael Morosi and Jonathan Dorsheimer have a total average return of 11.8% and 0.3% respectively. Morosi has a success rate of 80.0% and is ranked #1418 out of 3647 analysts, while Dorsheimer has a success rate of 45.2% and is ranked #1865.
The street is mostly Bullish on SCTY stock. Out of 11 analysts who cover the stock, 7 suggest a Buy rating , 3 suggest a Hold and one recommends to Sell the stock. The 12-month average price target assigned to the stock is $46.00, which implies a downside of 8.8% from current levels.
SolarCity Corp is engaged in designing, sale, engineering, installation, monitoring, maintenance and financing of solar energy systems to residential and commercial customers.