SolarCity (SCTY - Snapshot Report) , a leading provider of clean energy, has recently announced that it will provide solar electricity to the town of East Bridgewater for 25 years in an effort to lower energy costs.
Based in San Mateo, CA, SolarCity has provided the town with more than 10,000 solar panels which are expected to produce more than 3 million kilowatt hours of electricity annually. The solar power project has the capacity to generate 2.45 megawatts (MW) and is among the largest solar installations in Massachusetts.
The clean, renewable electricity generated from the solar plant will power approximately 350 homes and help them to reduce their electricity costs and use clean, renewable power. In return, the town will pay SolarCity a discounted amount as compared to its local utility rates.
Electricity generated by the solar field will be sent to National Grid and result in net metering credits. Those credits will help to reduce the electricity bills of the town. East Bridgewater is expected to save $2 million as energy costs over 25 years.
Net metering is a special metering and billing agreement between utility companies and their customers to facilitate the connection of small, renewable energy-generating systems to the power grid. It is generally a consumer-based renewable energy incentive.
In recent times, the utilization of solar energy is rising, primarily due to its clean nature and a growing awareness among the masses about its benefits. Also, government incentives and financing options that lower the cost of solar panel installation have led to an increase in solar business.
In fact, solar power is currently the only viable choice for residential consumers seeking an environment-friendly power alternative. Solar power limits the expenses and losses associated with transmission and distribution from large-scale electric plants to end users, unlike other renewable resources such as hydroelectricity and wind power.
Last month, SolarCity announced a definitive agreement to acquire Paramount Solar to increase its already large customer base and better compete with other energy producers like NRG Energy, Inc. (NRG - Analyst Report) , Edison International (EIX - Analyst Report) and SunEdison, Inc. .
SolarCity is a leading service solar provider with more than 3,300 employees, 68,000 customers and more than 400 MWs deployed. The company plays to its strength by providing renewable power at a lower rate than the grid price to residential and commercial markets in the U.S.
During the recently reported second quarter, the company’s residential MWs deployed increased 144%; cumulative energy contracts signed and outstanding increased 105% and cumulative customers increased 97% from the year-ago quarter.
SolarCity carries a Zacks Rank #3 (Hold).