SolarCity Corp Way Ahead Of Rivals In Residential Installations

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SolarCity Corp (NASDAQ:SCTY) is the undisputed winner in the U.S. market for the residential solar installations, clinching 29% of the total market for the first quarter of 2014. The number is far ahead of the second player Vivint Solar with a market share of 9%. Others in the top five were Sungevity, Verengo and Solar Universe in that order. As per the data from GTM research, residential installation of solar panel is rising and the market has grown 38% year over year in past 12 months.

Silevo acquisition crucial

SolarCity, an Elon Musk led company, announced that it has a major share in Buffalo.  Back in June, the California-based company announced the acquisition of Silevo, which would play a major role in the Riverbend Commerce Park, a Buffalo Billion project. The motive behind Silevo acquisition is that the company wants to build solar module plant in Buffalo that would increase the size of the largest solar plant in the United States by almost three-times, much in line to that of Chinese counterparts.

Analysts at Raymond James believe that the Buffalo facility would cost somewhere in the range of $350 million and $400 million to build, but SolarCity is quite on the price tag. Elon Musk stated that the end result the company is targeting is to produce solar panels that can generate power “cheaper than coal orfracked gas power.” Under the transaction, SolarCity is paying $200 million in shares for Silevo along with another $150 million if cost and volume targets are met. The solar company announced that it will transform the project’s vision into a major solar panel innovation center with around 1,000 jobs.

Rising revenue, shares for SolarCity

SolarCity posted an increase in revenue for the past three years from $59.55 million in 2011 ($126.91 million in 2012) to $163.84 million in 2013. Still, the company is operating at a deficit and lost $99.34 million in 2012 and $55.79 million in 2013 even after hundreds of millions granted as federal grants and loans. The management at the company has asked the investors to trust the growth trajectory, whereas analysts are cautious over the company’s high-debt and substantial risk.

SolarCity shares are currently trading at $64.70, and are up 24% this year so far. At the time of IPO launch in December 2012, the shares were at $11.72 and moved to $42.15, a year ago.

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