SolarCity Corp. has reached an OEM supply agreement with a leading global provider of energy solutions, REC Group. The news elicited a positive market reaction with the stock price gaining 4.4% yesterday.
As part of the deal, SolarCity, the largest solar power provider in the U.S., will purchase a minimum of 100 megawatt (MW), which can rise to a maximum of 240 MW, of REC’s Peak Energy solar panels over a 12-month period beginning fourth quarter 2014.
SolarCity has plans to install the panels, which are compatible with its Zep Solar mounting system, across its 15-state service territory. REC’s solar panels are supported by its linear 25-year power output guarantee. Notable characteristics of these panels include enhanced power production capability per square foot, solid and durable design, simple installation, optimized performance in all sunlight conditions, with a typical energy payback time of less than one year.
REC Group is considered as one of the leading producers of wafers, cells and solar panels for solar applications. This SolarCity-REC tie-up is a step forward towards boosting North America's rooftop generation markets.
SolarCity is well supported in its endeavors by a booming U.S. solar market. The company sees installations climbing to as much as 900 MW to 1 GW by 2015. It also expects a million rooftop solar customers by 2018.
The company is also hitting upon new and improvised ways to reach out to potential customers. It has recently teamed up with Groupon Inc. (GRPN - Free Report) to form one of the first online offers of its kind for solar systems. SolarCity’s eye-catching deal with Groupon is a broad push for the industry into online customer acquisition. The company has already been building up its customer database through The Home Depot, Inc. (HD - Free Report) stores since 2010 and select Best Buy Company, Inc. (BBY - Free Report) stores from March this year.
SolarCity presently carries a Zacks Rank #4 (Sell).