SolarCity Corp. is all set to grasp the largely untapped abundant solar power resources in one of the sunniest U.S. states – Nevada. SolarCity – a pioneer in residential solar – is making a big expansion in Las Vegas, Southern Nevada.
The company announced that it will start offering leasing service in Southern Nevada, enabling Las Vegas area homeowners to go solar for as little as $30 per month, way less than what a usual utility would charge. The company plans to start its coverage in the most populated city of Las Vegas with services comprising design, installation, financing, insurance, monitoring as well as a performance guarantee. SolarCity expects to initiate installations by end October serving customers on a first-come, first-served basis.
SolarCity – the largest residential solar power provider in the U.S. – will participate in NV Energy's SolarGenerations program. This program is expected to reopen in August and the company will initially serve customers of NV Energy in the greater Las Vegas area. This includes the cities of Las Vegas, North Las Vegas, Spring Valley, Winchester, Paradise, Henderson and Boulder City.
Apart from its renewable energy expansion effort, this move into Nevada will generate more employment. The company is gearing up to add 400 employees in the next year to its current count of 400, making Nevada its largest office nationally.
SolarCity installed 567 megawatts (MW) of solar systems, including residential, commercial and others, through the end of 2013. Notably, its residential installations grew 130% year over year to 70 MW during the final quarter of 2013. SolarCity's diverse sales strategies have played a pivotal role in the company's ability to capture this large pie of the residential market.
With a current cap of $4.87 billion, SolarCity is already dominant in the robust solar markets of California and Arizona. The move into neighboring Nevada is encouraging too. The company however needs to extend its footprint in the other states as well.
Last year, the U.S. residential solar market grew rapidly and is expected to outshine the other solar market segments this year. Since 2000, residential solar installations have grown steadily each year. Solar installations increased from 494 MW in 2012 to 792 MW in 2013, marking 60% growth in a year. In this market scenario, we are optimistic about SolarCity and its business model that allows residential customers to pay back for their solar installations on a monthly basis over a period of 20 years. This not only helps customers to evade bulky upfront payments, but also lends top-line visibility for the company.
San Jose, CA based solar manufacturer SunPower Corp. (SPWR - Free Report) and Google Inc. (GOOG - Free Report) have recently teamed up to form a $250 million fund to help homeowners across the U.S. to install solar panels at home. This pact is essentially aimed at financing residential solar system installations that SunPower will then lease out to homeowners.
Backed by Tesla Motors Inc. (TSLA - Free Report) founder Elon Musk, SolarCity presently carries a Zacks Rank #3 (Hold).