SolarCity Corp (SCTY) Gets Into Some Best Buy Stores

SolarcityBy BrokenSphere (Own work) [CC BY-SA 3.0 or GFDL], via Wikimedia Commons

Solar installation company SolarCity Corp (NASDAQ:SCTY) has announced that it has struck a deal with Best Buy Co., Inc. (NYSE:BBY) to offer its services for sale in a limited number of the retail chain’s stores. The company will be moving into 60 locations in Arizona, Hawaii, California, Oregon and New York.

SolarCity to educate the public

SolarCity Corp (NASDAQ:SCTY) management said their goal is to not only pitch their installation services directly to consumers, but also conquer some misconceptions about solar power. They said many consumers hold the outdated view that putting in solar panels at their homes is very expensive and also a difficult process. They want to explain to consumers that they can save money on their electric bills starting from the first day the solar panels are installed.

This new partnership between SolarCity Corp (NASDAQ:SCTY) and Best Buy Co., Inc. (NYSE:BBY) is basically an expansion of an experiment the two conducted in September at some stores in New York and California. They also have a similar partnership with The Home Depot, Inc. (NYSE:HD) and have found some success with it so far.

How SolarCity’s contracts work

SolarCity Corp (NASDAQ:SCTY) only charges homeowners for the power their solar panels generate every month. That tends to be far less expensive than the power received from the grid, so on average, homeowners see a 10% to 15% drop in their utility bill each month. The company offers its services through 20-year leases. Customers do not own the solar panels or pay any upfront cost for them or even the installation.

Company representatives will be on site at Best Buy Co., Inc (NYSE:BBY) stores in order to explain how they can install solar panels on a home. They use satellite images to ascertain the best positioning for the panels on the roof.

SolarCity Corp (NASDAQ:SCTY) said a recent survey indicated that 62% of homeowners in the U.S. are interested in solar power, but fewer than half a million homes have solar panels installed. That means there are tens of millions of homeowners interested in having solar panels but who do not yet have them.

SolarCity offers gift cards

To entice consumers to check them out, SolarCity Corp (NASDAQ:SCTY) is offering a $100 gift card to use at Best Buy Co., Inc. (NYSE:BBY) stores for anyone who signs up through the stores before April 22, which is Earth Day.

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About the Author

Michelle Jones
Michelle Jones was a television news producer for eight years. She produced the morning news programs for the NBC affiliates in Evansville, Indiana and Huntsville, Alabama and spent a short time at the CBS affiliate in Huntsville. She has experience as a writer and public relations expert for a wide variety of businesses. Michelle has been with ValueWalk since 2012 and is now our editor-in-chief. Email her at Mjones@valuewalk.com.

1 Comment on "SolarCity Corp (SCTY) Gets Into Some Best Buy Stores"

  1. Marketing the higher priced solar lease and PPA financing model to price sensitive consumers in a big box retail outlet is simply not a good idea.

    Many of these consumers will simply visit the Internet to comparison shop after being “educated” face to face by a salesperson, and will find higher performance products at much lower pricing online. Especially when compared to the pricing that’s available when purchasing a solar system outright.

    For example: After making 20 years worth of leasing payments on a $0 down solar lease, a homeowner will end up paying about 3 times the amount that the homeowner would have paid if he or she had purchased a solar system instead.

    A leased 4.75 kW system will typically cost the consumer $117.00 per month for a total cost of $28,080. The same purchased 4.75 kW system would cost the consumer $9,642 after applying the 30% federal tax credit. That’s a difference of $18,438 wasted when you lease.

    And that’s without adding in the 2.9% annual payment escalator that the leasing companies are fond of adding into their contracts. Add in the annual payment escalator and the cost to lease a solar system rises substantially.

    The solar lease and PPA financing models are outdated and might have made sense 4-5 years ago when system pricing was much higher. Today solar system pricing has fallen well below $3.00 per watt before incentives. At this pricing level, solar leases and PPAs absolutely no longer make sense no matter how or from where they are marketed.

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