SolarCity takes aim at small businesses in California
SolarCity Corp., a solar-panel installer long known for its residential services, is pivoting to the commercial side of solar power and focusing on small businesses.
A service tying new solar installations to a loan to be repaid through property taxes will start in California, but SolarCity SCTY, +2.56% said it expects to expand the offer to East Coast businesses next year, probably starting in Connecticut or New York next, Chief Executive Lyndon Rive told MarketWatch in an interview.
The solar industry has long neglected small and medium businesses, Rive said. That’s mainly because of costs and difficulties lining up financing, he said.
SolarCity expects to use in-house contractors for the installations, reducing costs and installation time.
Financing can be challenging for small and medium-size businesses because, unlike big corporations, their creditworthiness is not rated.
SolarCity is doing the financing through a California program that allows homes and businesses to secure loans for energy-efficiency improvements, to be repaid as part of their property taxes over the course of up to 25 years.
SolarCity remains committed to the residential market and part of the reason it is offering a small- and medium-businesses leasing program is the desire to keep the business growing and launch new programs, Rive said.
Shares of SolarCity have gained 2.3% so far this year, and lost 9% in the last three months as it and other solar companies feel the pinch of lower oil prices and economic concerns about Europe and China, key growth markets for the sector.
Analysts at Roth Capital said in a note Monday they expect residential solar-power growth in the U.S. to accelerate. As a result, they are bullish on SolarCity “given strong fundamentals and positive sentiment,” following the recent acquisition of Vivint Solar by SunEdison and the impending initial public offering of SunRun, they said.
“(SolarCity), in our view, is a key beneficiary of the strong growth of the U.S. residential market,” the analysts said.
Originally published in Market Watch.