A Closer Look into SolarCity

      SolarCity has gone public during a rough time in 2012, where they were forced to close 47% above its $8-a share initial public offering price because investors were being initially unreceptive. The original offering price SolarCity had in mind was estimating between $13 and $15, causing it to raise $141 million. However, since they were forced to lower their share prices, they raised $92 million.
      Besides Enphase Energy (ENPH) opening public in March, SolarCity is actually the first clean technology company to get involved publicly while the stock market, in reference to solar energy, has been failing (due to the Chinese leading because of its low prices). Enphase Energy, a company which makes products to help improve solar efficiency, has had its stock price lowered by half. BrightSource Energy, another solar company planning to go public in April, had cancelled its initial public offering price.
      Recently, SolarCity has been able to make a comeback and raise their stock price from $8 to $19. The reason for this was released in an interview by Fortune Magazine; SolarCity comments "our business is totally different. We're an energy company. We install solar systems for free, and we sell the electricity at a lower rate than you can buy it from the utility. So given the option of paying more for dirty power or paying less for clean power, what would you take?"
     SolarCity has previously commented that they install solar systems for free but this option is only available as long as you reside in the 14-state territory where their locations operate. They also took consideration in deciding what states to hold their operational locations in by looking at the current price of electricity, observing how much sun the market receives, and looking at the state's tax incentives. For example, in Arizona, there is cheap electricity but they obtain an incredible amount of sun. In Oregon, there isn't a great amount of sun but Oregon has a strong state incentive, whereas they want to see residents adopt clean energy.
     SolarCity also operates in marketing their products in Home Depot. While potential customers walk into Home Depot to purchase products, solar consultants explains that they can get a free solar system and pay less for electricity. They only pay Home Depot per customer they sign up.
     There seems to be some great potential in SolarCity because they indeed have a different business model. Who wouldn't love to indulge in a free solar system, where you're able to pay less for electricity? Now, if only they opened their locations in many areas in the East Coast.

Free Solar Panels for Honda customers?

       Tesla Motors has been getting ahead in the electric vehicle market because of their newly produced car, Model S. Many car manufacturers are concerned with the shift in the market; this actually includes Honda Motor Company Ltd, the Japanese car manufacturing company to be established in 1948. Honda has recently decided to have a partnership with Solarcity, an American provider of energy services, to offer cheap solar power to eligible customers. They promised that with this incentive, they will be guaranteeing a utility bill for solar power producing a lower rate than grid-supplied energy. This not only includes cheap solar energy but, it also means the eligible Honda and Acura customers would be obtaining a rooftop solar panel installation, covering all the costs including the cost of the panels itself.
       The agreement that has been established between Honda and Solarcity is a power purchase agreement, which is a popular tactic to finance solar installations. Power purchase agreements are designed as contracts between two parties, whereas typically the property owner pays for electricity at a reasonable price rate for a period of time but the installer has continual access to own, operate, and maintain the system for that time period. It's not unusual for this partnership to also offer insurance, maintenance, repair and monitoring during the specified time period.
       Honda customers are able to pay for their bills up front in two ways: either pre-pay for the solar electricity or pay at a monthly rate which is lower rate than their utility bill. Surprisingly, Honda and Solarcity had invested $65 million into a fund for this agreement, which covers dealerships and customers located within Solarcity's few state service areas. This includes other efficiency upgrades for customers such as weatherization, a practice of protecting establishments and its interior from all weather (sunlight, precipitation, wind) and modifying it to reduce energy consumption and optimize energy efficiency.
     Not a bad deal if they're planning to be ahead of the other car manufacturers to be on a head-on competition with Tesla Motors, right? What do you think?