Shares of SolarCity Corp (NASDAQ:SCTY) are up 3.20% after the company announced they had entered into a contractual agreement with Wal-Mart Stores, Inc. (NYSE:WMT), that states SolarCity will be working on various solar projects at Wal-Mart stores in 36 states, over the next four years. SolarCity and Wal-Mart first entered their partnership together in 2010 and have since begun 200 solar operations at various Wal-Mart stores around the country. Additionally, SolarCity has installed 13 energy storage units at different Wal-Mart locations, alongside the usual solar power generator. The new agreement will be increasing these storages throughout the US on Wal-Mart stores. These energy storage units have allowed Wal-Mart to save additional money, as they are able to rely on stored energy and cut “peak hour” power production, which is more expensive. However, the new deal is for larger and more capacity storages, which will be using a 200 kilowatt battery.
Since the two companies began their business partnership four years ago, SolarCity Corp (NASDAQ:SCTY) has been able to create an additional 5,000 permanent jobs around the US. According to the Solar Energy Industries Association (SEIA), Wal-Mart Stores, Inc. (NYSE:WMT) is the largest corporate user of solar energy in the US.
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Wal-Mart and SolarCity gain advantages from partnership
This is a great partnership that greatly gives new advantages to both SolarCity Corp (NASDAQ:SCTY) and Wal-Mart Stores, Inc. (NYSE:WMT). For SolarCity, your name and brand is out there and working with one of the most reputable brands in the world really upgrades your credibility. This could additionally lead to more corporate customers down the road, if the new Wal-Mart agreement continues to produce promising, and money saving results. For Wal-Mart, being the largest corporate user of solar energy in the US is huge not just from a public relations standpoint, but also from a budget standpoint. Wal-Mart is not only saving environmental impact by its stores, but it is also saving money and able to cut lighting costs at its stores. Additionally, these storage devices that can store the energy for later use will really help Wal-Mart save money and turn to stored energy during “peak hours” and when energy is more expensive. The more number of stores that use this technology, the more money saved at the end of the year. Clearly, management sees it as a successful option, otherwise, we would not have had this agreement come out today.
Overall, this is a big deal for SolarCity Corp (NASDAQ:SCTY) and Wal-Mart Stores, Inc. (NYSE:WMT). Both brands benefit greatly from their partnership and we could begin to see a driving force into corporate use of solar energy. Not only is solar excellent from a corporate PR standpoint, but saving money at the same time is the best of both worlds. Eventually, there will be a bigger push into solar, as the technology continues to fall in price and traditional energy methods continue to increase in cost. For now, Wal-Mart and SolarCity are taking opportunity by the horns.