{"id":26748,"date":"2016-12-30T13:44:07","date_gmt":"2016-12-30T13:44:07","guid":{"rendered":"https:\/\/yaabot.com\/?p=26748"},"modified":"2024-02-15T08:40:35","modified_gmt":"2024-02-15T03:10:35","slug":"the-rise-and-rise-of-solarcity","status":"publish","type":"post","link":"https:\/\/entropymag.co\/the-rise-and-rise-of-solarcity\/","title":{"rendered":"The Rise and Rise of SolarCity"},"content":{"rendered":"\n

There seem to be two pillars that form the structure of rapid development: Technology and Human Skill. It is evident that these driving forces need a catalyst to facilitate smart and sustainable development. The catalyst being energy, is widely consumed. This consumption increases at a rate of 2.1% every year. Energy resources have evolved over time and have reached a stage where energy is synthesized efficiently and judiciously to avoid overexploitation of natural resources. With the world running after smart energy resources, firms with an ambition to deliver cleaner and better energy have sprung up. The leading player in this industry is SolarCity Corporation. Headquartered in San Mateo, California, it boasts of being the largest solar energy services provider in the United States.<\/p>\n\n\n\n

SolarCity: Vision & Mission<\/h2>\n\n\n\n

SolarCity is America’s leading full-service solar power provider.<\/a> It envisions\u00a0making clean energy available to users across the entire\u00a0professional strata –\u00a0homeowners, businesses, schools, non-profits and government organizations. The company also\u00a0claims to provide cleaner\u00a0energy at a lower cost. Rates are apparently lower than those for energy produced by burning conventional fossil fuels like coal, oil and natural gas. It\u00a0does this by installing rooftop solar systems characterized by\u00a0cutting edge\u00a0engineering, and cost-effective energy production capacity.<\/p>\n\n\n\n

The company was started by Elon Musk’s cousins – Peter and Lyndon Rive. Musk had not has been as involved in SolarCity as he was with Tesla and SpaceX. However, he did help kickstart the incorporation and remained Chairman.<\/p>\n\n\n\n

Also Read:<\/strong> All you need to know about Starlink<\/a><\/p>\n\n\n\n

Harnessing energy using solar power is not a novel concept. But being the growth machine that it is, The company has been winning\u00a0trust of hundreds of thousands of domestic and industrial customers. The team\u00a0claims to have revolutionized the way what they call Better Energy, is delivered. SolarCity claims to provide\u00a0customers with a cleaner, more reliable and more affordable alternative to their monthly utility bill. And the numbers back this claim.<\/p>\n\n\n\n

With the promise of cleaner energy, and integrated sales, financing, design, installation, monitoring and efficiency services from a single source without the involvement of multiple third-parties, The company has been showing a steep upward curve in its growth until last year.<\/p>\n\n\n\n

\"SolarCity
SolarCity is America’s leading full-service solar power provider.<\/a><\/figcaption><\/figure>\n\n\n\n

The Rise of SolarCity<\/h2>\n\n\n\n

In 2015, SolarCity described itself as two types of operations under one roof — a development company (DevCo) and a power company (PowerCo). DevCo sells and installs solar and energy storage panels. It\u00a0is largely involved with the design, engineering and implementation of solar energy systems. PowerCo provides financing and harvests 30 years’ worth of energy production and asset yield. In Q2 2015, The company added 44,900 customers<\/a> to its base, for a cumulative total of 262,495 by quarter end.\u00a0That’s an 86% rise year-over-year.<\/p>\n\n\n\n

There are multiple reasons why one would volunteer to take to solar energy systems in their domestic or workspace units. Growing consciousness and awareness about carbon emission is one reason. The scarcity of customers in the utility space, or the need to be self-reliant in energy generation, are others.<\/p>\n\n\n\n

\"Cumulative
Cumulative customers of SolarCity<\/figcaption><\/figure>\n\n\n\n

The rooftop solar industry grew by 71% in the year 2015. The company reported an energy production of 1.25 Terawatt-hour at the end of Q2 in 2015. The business performance of SolarCity’s PowerCo reflected in\u00a0reports that claimed that a record amount of $41 million available cash was generated in Q2 2015. In the\u00a0period since its inception in July 2006 till Mid-2015, the company has\u00a0witnessed\u00a0a huge growth of customers. Additionally, the addressable industry market and gross margins also recorded a meteoric rise. Credit for this\u00a0can be attributed to the\u00a0scalability of SolarCity’s business model. Also,\u00a0the bleeding-edge technology it\u00a0stands for.<\/p>\n\n\n\n

The Drop in SolarCity’s glorious growth<\/h2>\n\n\n\n

However, the glorious upward trend witnessed a drop in the rate of the growth of the industry and the company, SolarCity. According to GTM Research<\/a>, the solar-energy engineering sector will\u00a0grow by 16.5 percent in the 2016. This is down from a prior forecast that estimated a 23 percent growth. By the end of 2015, The company had already shown a dip in performance compared to expectations. The\u00a0solar provider reported net installations of 870 megawatts of solar panels in 2015. Despite this being 73% more than in 2014, the\u00a0figure fell short of the forecast of 878-898 megawatts installations. This performance disappointed investors, and SolarCity saw its stock plunge by over 30% right in the beginning of 2016.<\/p>\n\n\n\n

The company had its\u00a0reasons for its\u00a0dipped performance in the domestic sector. It\u00a0claimed it to be a result of unforeseen delays in large solar panel projects for commercial companies. Several other factors contributed to this\u00a0stunted growth. Change in state regulator laws and policies in various US states is one of them. Nevada, for instance, changed policies, reducing\u00a0the compensation that solar-energy system consumers received. It also added on to the monthly fees that the customers had to pay for use and maintenance of the power grid.<\/p>\n\n\n

\n
\"A
A SolarCity vehicle is seen on the road.<\/figcaption><\/figure><\/div>\n\n\n

In 2016, SolarCity turned in a surprisingly strong third quarter. It installed more solar power capacity than expected and lost marginally less money than what analysts had forecast. However, the solar-energy biggie reduced the estimated number of installations from an initial number of 1,250 megawatts to 900-1000 megawatts. SolarCity\u2019s installations had seen a yearly growth rate not less than 63 percent in the period 2009-2015. However, the rate is expected to drop down to around 9 percent in 2016, mainly due to a 39 percent slump in new bookings during the first half of this year. SolarCity\u2019s losses are primarily due to the fact that it has not been able to reduce its costs as rapidly as its executives hoped.<\/p>\n\n\n\n

SolarCity-Tesla Merger: Elon Musk’s way<\/h2>\n\n\n\n
\"The
The merger of SolarCity and Tesla<\/figcaption><\/figure>\n\n\n\n

Late November saw the controversial Tesla-SolarCity merger. In November 2016, shareholders gave their approval to Elon Musk, and Tesla went on to acquire SolarCity for $2.6 billion. Musk combined his two sustainable energy business ventures to create the world’s only vertically-integrated energy company. The merger’s potential was clear when Elon Musk unveiled splendid solar roof tiles that look like shingles, along with Tesla’s home battery. The integrated product helps modern households access and store alternative forms of energy. Despite performing well, SolarCity saw a decline in its stock by 60% in 2016. It struggled to boost the demand for commercial solar panel installations in the market. The struggle with the huge amount of capital it had consumed also continued.<\/span><\/p>\n\n\n\n

Related:<\/strong> Tesla’s Gigafactory Will Change How The World Consumes Energy<\/a><\/span><\/p>\n\n\n\n

\"SolarCity
SolarCity Installation Costs Decline<\/figcaption><\/figure>\n\n\n\n

The Impact of the SolarCity-Tesla Merger on SolarCity’s growth<\/h2>\n\n\n\n

After the merger announcement, SolarCity shares rose 9.8 percent to reach their highest intraday rise since June 22, 2016. A blogpost published by Tesla <\/a>a month ago, claimed that the solar-installer will boost Tesla’s sales by $1 billion next year. It also claims SolarCity will add more than $500 million to Tesla’s balance sheet in terms of cash over the next 3 years. What highlights Tesla\u2019s strategy is that the American automaker is expected to develop and market integrated solar roof panels as well. These can be installed like traditional roofs for new construction as well as replacement roofing. These new panels will be marketed at Tesla stores starting next summer, with Tesla batteries and cars.<\/p>\n\n\n\n

Analysts expect SolarCity to report losses in 2017 at a rate lower than the 25% increase in loss from 2015 to 2016. An uptick in the cost of finding and signing up new customers is one trend that SolarCity executives hope to reverse through the Tesla acquisition. This will enable the solar-energy giant to sell rooftop solar systems at the electric vehicle maker\u2019s stores. Since the company expects a growth into an economic organization of scale, it foresees a spike in customer acquisition and a drop in its installation costs to a point where in subsidies are no longer required to make solar panels financially feasible.<\/p>\n\n\n\n

Future plans for SolarCity<\/h2>\n\n\n\n
\"Elon
Elon Musk, Chairman of SolarCity and CEO of Tesla Motors, speaks at SolarCity\u2019s Inside Energy Summit in Manhattan.
Rashid Umar Abbas | Reuters<\/figcaption><\/figure>\n\n\n\n

SolarCity plans to open a massive solar panel factory in Buffalo in 2017<\/a>. It promises close to 1,500 jobs at the $900 million factory in South Buffalo. This is in addition to the 1,400 new jobs supplying or providing services to SolarCity. America’s Number 1 solar-services provider intends to stand true to its glory with its long-term contracts and a market leading position in residential solar energy.<\/p>\n","protected":false},"excerpt":{"rendered":"

There seem to be two pillars that form the structure of rapid development: Technology and Human Skill. It is evident that these driving forces need a catalyst to facilitate smart and sustainable development. The catalyst being energy, is widely consumed. This consumption increases at a rate of 2.1% every year. Energy resources have evolved over time…<\/p>\n","protected":false},"author":2,"featured_media":37047,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8],"tags":[236,707,708],"_links":{"self":[{"href":"https:\/\/entropymag.co\/wp-json\/wp\/v2\/posts\/26748"}],"collection":[{"href":"https:\/\/entropymag.co\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/entropymag.co\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/entropymag.co\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/entropymag.co\/wp-json\/wp\/v2\/comments?post=26748"}],"version-history":[{"count":1,"href":"https:\/\/entropymag.co\/wp-json\/wp\/v2\/posts\/26748\/revisions"}],"predecessor-version":[{"id":37015,"href":"https:\/\/entropymag.co\/wp-json\/wp\/v2\/posts\/26748\/revisions\/37015"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/entropymag.co\/wp-json\/wp\/v2\/media\/37047"}],"wp:attachment":[{"href":"https:\/\/entropymag.co\/wp-json\/wp\/v2\/media?parent=26748"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/entropymag.co\/wp-json\/wp\/v2\/categories?post=26748"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/entropymag.co\/wp-json\/wp\/v2\/tags?post=26748"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}