The solar power service provider SolarCity Corp. (SCTY – Snapshot Report) has outlined expansion plans in California to spread reliable and efficient solar power to the masses. The company has plans to open 10 new operation centers by the end of this year. This move will virtually double the company’s footprint in the state.
This expansion will bring solar services to new regions, diminish installation wait times and contribute to state and local economies by creating additional jobs. This major provider of clean energy will have a location within 30 miles of more than 90% of California’s population. The company has a workforce of more than 2,100 in California and is seeking to create at least 260 additional jobs in the Golden State.
SolarCity indicated that this expansion will not only boost local economies but also help it to cut costs and prove beneficial for the environment. This will be done by lessening drive times and increasing installation efficiency.
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Despite the slow winding down of the state incentive program for renewable energy in California, SolarCity’s operational expansion will help customers to access solar power at costs comparable or even cheaper than the local utilities.
California’s renewable energy policy, the Renewables Portfolio Standard (RPS), implicates that all utilities are required to source 33% of their retail electricity sales from renewables by 2020. At the same time, the state is also winding down its incentive program that signals how far solar power has moved toward the mainstream. Currently, the state generates about 20% of its electricity from renewable energy, most of which comes from hydropower. However, the California Public Utilities Commission expects major power generation to come from solar power in the future.
Recently, SolarCity reported third quarter results. The company narrowed its adjusted third-quarter loss to 43 cents per share from a loss of $2.60 per share in the year-ago quarter. The adjusted third-quarter loss fared better than the company’s guidance of a loss of 50 cents to 60 cents. The upside was backed by robust solar panel installations, indicating vigorous demand and was supported by the company’s able execution strategy. During the third quarter, the company booked new customers of 12,386, representing a major jump of 92.4% from the year-ago number of 6,437.
Backed by Tesla Motors Inc. (TSLA – Analyst Report) founder Elon Musk, the SolarCity stock has rallied almost 279.2% since its first appearance in the stock market. The company has a market cap of $3.72 billion. Elon Musk owns about 73% of SolarCity’s 78 million shares outstanding, while a relatively small proportion is entitled for the public.
SolarCity presently retains a Zacks Rank #3 (Hold). Other better ranked stocks include JinkoSolar Holding Co., Ltd. (JKS – Snapshot Report) and First Solar Inc. (FSLR – Analyst Report), both with a Zacks Rank #2 (Buy).